Bellator and Shark Fights Dispute -- Why Did Shark Fights Bother Signing Herman If It Was Going To Back Down So Easily?

As reported over at Sherdog.com in a post, Herman Scratched from Shark Fights 13 Due to Bellator Litigation, Bellator "recently added Shark Fights as a third party to the suit for alleged tort[ious] interference [with] what it believes is an exclusive contract it has with Herman."

While I predicted that Bellator would in fact assert such a claim in my post, Dave Herman To Fight For Shark Fights in September -- I Expect Another Lawsuit, back in July when Loretta Hunt first reported that Dave Herman had signed a one-fight contract to fight Aaron Rosa in a heavyweight bout for Shark Fights in September, I could not have predicted that Shark Fights President Brent Medley would back down so quickly to Bellator's claim for tortious interference given his strong statements back in July when the fight was inked.

As you will recall, when Loretta Hunt asked Medley if he was worried about potential litigation given Bellator's ongoing litigation with Herman, the fact that Bellator sent Shine a cease and desist letter for attempting to sign Herman, and the fact that it appeared that Bellator had, in fact, also filed a complaint against Shine on February 9, 2010 (Case No. C-000040-10), according to Loretta Hunt Medley responded as follows:

After speaking with his own attorney, Brent Medley [Sharks' matchmaker] was not worried about any legal action Bellator might take against the Texas-based promotion to prevent Herman from fighting for him.

 'Contractually, with all the smokes [sic] and mirrors gone, I’m not sure Bellator will be able to issue a cease and desist letter that will hold,' said Medley.

Medley also questioned why Bellator would want to take such action.'My number-one question to (Bellator) would be why would they want to issue (a cease and desist letter) when the fighter doesn’t want to fight for them?' asked Medley. 'I don’t see why you’d prevent a fighter from making a living. If they decide to take legal action, in my eyes, it shows Bellator isn’t as fighter-friendly as it presents itself to the public.'

Now, Loretta Hunt's latest piece provides as follows:

If Shark Fights had proceeded with the bout regardless of Bellator’s legal stroke, it was likely that Bellator would have filed for a temporary injunction preventing Herman from competing, acknowledged Shark Fights President Brent Medley. The promoter, who launches his first pay-per-view effort in September with a talent-laden roster, said the prospect of fighting over Herman in court wouldn’t have been cost-effective for his company.

'We wanted the fight and we knew there would be some problems when we signed it,' said Shark Fights President Brent Medley. 'At the end of the day, it looked like both sides would have had to spend money that we could put into our organizations and our upcoming events. It wouldn’t have mattered who won -- the attorneys would have walked away with the money.'

Medley said his company also took heed that Herman had filed for injunctive relief in March asking that Bellator be bound from interfering with his prospective bouts, but that a New Jersey judge denied the request.

'Even if we were in the right,  we stood the chance of a judge ruling against us,' said Medley.

Given that Medley knew (or at least should have known) that Bellator would attempt to put a stop to any Herman bout for Shark Fights, given that he purportedly talked to his lawyer and was confident Shark would prevail on the merits of any dispute, and given that he still signed Herman to a September fight, why the sudden 180 degree change in position now?  The only thing that changed from July until now is the fact that Bellator asserted a predictable claim against Shark Fights. 

Stated differently, if the fact that "both sides would have had to spend money" and "[i]t wouldn’t have mattered who won" is enough to make Shark Fights back down now, why bother signing Herman in the first place given that Medley knew about the Bellator Herman litigation in July. 

All he did, in effect, was get the fans excited for a fight that was never going to happen.

Fight Lawyer

Don King Loses Defamation Appeal In Action Against Disney, ABC, and ESPN

On June 30, 2010 Don King Productions, Inc. and Don King lost their appeal of a final summary judgment entered against them on their claims for defamation and false light (King did not appeal on the false light claim) by a trial court in Florida.

In affirming the trial court's ruling, the Fourth District Court of Appeal of Florida ruled that "statements made during an ESPN Sports Century television program about his life and career" did not defame boxing promoter Don King.

According to the decision, there were five statements at issue:

Three of those statements were spoken by Don Elbaum, a boxing promoter who has known King for over thirty years.  Elbaum was also the source of the fourth statement, which was spoken by the program’s host, Chris Fowler. The fifth statement was spoken by Jack Newfield, a writer who had covered King for several years, and whose works on King included numerous newspaper articles, a book entitled Only in America, and a 'Frontline'documentary on the Public Broadcasting Service.

Specifically, as set forth in the decision, the five statements were as follows:

1. Elbaum indicated that King organized a benefit exhibition fight for Forest City Hospital. The hospital only received $1,500 out of the $85,000 in ticket sales.

2. Elbaum described a private conversation he had with Meldrick Taylor in which they discussed Taylor being owed $1,300,000 for a fight, and King giving Meldrick a check for only $300,000.

3. Elbaum asserted that King threatened to have Meldrick Taylor killed.

4. Elbaum stated that King convinced doctors to invest $250,000 in a movie about his life that was never made.

5. Newfield described an encounter he had with King at a press conference where King went crazy and threatened to kill him.

In holding that King failed to establish actual malice, it rejected King's argument that there was sufficient evidence that ESPN harbored "ill will towards him towards him and intended to portray him in a negative light" noting that ill will is not the same as actual malice in the defamation context and holding that "[a]ny ill will or evil intent in the emails and production notations to which King directs our attention does not amount to actual malice."

Specifically, the Court set forth King's evidence of ill will:

King directs us to several emails exchanged between ESPN producers. In these emails, the producers requested more ominous music and referred to King as a 'greedy conniver.' There were also emails exchanged between the ESPN producers and producers from Broadway Video, in which the ESPN producers requested the Broadway  Video producers portray King as a 'huckster,' 'thug,' and an 'evil mob connected guy.'  Finally, King points to several notations on the script where ESPN producers allegedly commented that King should be portrayed as 'more evil,' 'greedy,' and 'engaging in criminal activities.'

In rejecting King's argument, the Court recognized that "[i]t may also be true that ESPN chose to present the negative aspects of King’s life without balancing those with more positive images and stories. However, nothing in the record shows that ESPN purposely made false statements about King in order to bolster the theme of the program or to inflict harm on King. An intention to portray a public figure in a negative light, even when motivated by ill will or evil intent, is not sufficient to show actual malice unless the publisher intended to inflict harm through knowing or reckless falsehood."

The Court also rejected King's argument that "ESPN ignored the obvious reasons to doubt Elbaum’s and Newfield’s statements" because King has not presented any evidence that ESPN in fact doubted Elbaum’s credibility or the veracity of Newfield’s statement."

Finally, the Court addressed King's argument "that ESPN should have conducted a more searching investigation into the challenged statements, such as interviewing additional sources to verify the statements. By not doing so, King asserts that ESPN deviated from accepted standards of journalism."

The Court rejected this argument stating that "[t]he law is well established that the failure to investigate, without more, does not constitute actual malice." 

It looks like Don King's success in the Florida Courts (as in the Shine Mayorga case) has hit a wall.

Fight Lawyer

Update: According to hq-streams.com Website UFC 118 Will Not Be Streamed -- In Compliance With Temporary Restraining Order

Following up on my post, "Zuffa Gets Its Temporary Restraining Order Prohibiting Stream of UFC 118 at hq-streams.com," I checked out the hq-streams.com website and it displays the following text:  "Too All Members Of The Forum, There won't be any UFC 118 stream here this saturday. We don't want our site to get into troubles with ZUFFA!"

Thus, regardless of whether hq-streams.com is actually aware of the TRO, it nonetheless appears that hq-streams.com will comply with the TRO terms by not streaming UFC 118 this weekend.

Fight Lawyer

Mayweather and WWE Stuck In South Carolina Court In Copyright Dispute Over Song “Yep”

On August 25, 2010, United States District Judge Joseph F. Anderson, Jr. of the United States District Court for South Carolina denied the separate motions to dismiss (or, in the alternative, to transfer) for lack of personal jurisdiction filed by defendants World Wrestling Entertainment, Inc. and Mayweather Promotions and Mayweather Promotions, LLC.

As set forth in the decision denying the motion, the facts of the dispute were as follows:

On March 30, 2008, Floyd Mayweather, Jr. entered an Orlando, Florida arena hosting WrestleMania 24 to the song “Yep,” a composition that Dash contends violates his copyright in a musical track entitled “TONY GUNZ BEAT.” WrestleMania 24 took place before a live audience of 75,000 and a pay-per-view and television audience of over one million. Dash represents that untold numbers of WWE enthusiasts and Mayweather fans have purchased the Wrestlemania 24 DVD, and viewed clips of Yep on YouTube.com. Dash alleges that WrestleMania 24 was advertised and broadcast in South Carolina, and purchased on pay-per-view by South Carolina residents. Dash also alleges that South Carolina consumers have purchased WrestleMania 24 DVDs at brick-and-mortar retail stores in South Carolina as well as online stores (in which case the DVDs were shipped to South Carolina).  On August 24, 2009, Mayweather guest-hosted a WWE event entitled “RAW” in Nevada, at which Yep again accompanied Mayweather’s entrance to the arena. Dash alleges that RAW, and the infringing content therein, was advertised, broadcast, consumed on pay-per-view, and purchased on DVD by residents of South Carolina in South Carolina.

In its legal analysis, the Court details the relevant law concerning personal jurisdiction over "foreign" corporations and concludes that copyright infringement is a tort and so the "effects" test should be applied to determine whether there is personal jurisdiction over the Mayweather defendants. The Court analyzes whether there are "minimum contacts" with South Carolina sufficient to exercise personal jurisdiction over the Mayweather defendants.

In this regard, the Court specifically notes as follows:

The court also notes that Ellerbe simultaneously proclaims knowledge of the creation of Yep, while failing to disclaim knowledge of the copyrighted track allegedly contained therein. Also, while the broadcast of Wrestlemania 24 was directed at a national audience, the tortious broadcast had but a single recipient in a single location. The court finds the allegation of knowledge of Dash’s copyright [], the Promoter’s failure to challenge or otherwise disclaim such knowledge, and the Promoters’ activities as sworn to in the Lawi affidavit, sufficient to establish the requisite showing of intent under [the relevant caselaw].  The court also finds that the focal point of the alleged tort, and the locus of its injury, was South Carolina.

The Court addresses WWE's motion to dismiss for lack of jurisdiction under the "traditional" test," as opposed to the "effects" test, and finds that Dash has adequately established a prima facie case of personal jurisdiction over the WWE.  Specifically, the Court holds:

Here, WWE’s DVDs of WrestleMania 24 did not randomly and fortuitously find their way on to the shelves of South Carolina retail establishments. []. WWE is 'an integrated media company,' registered to do business in South Carolina, and caused its DVDs to be sold through many of the largest retailers in the country, each with many locations in South Carolina. On these facts, WWE cannot deny that it 'delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in [South Carolina].' [].  Accordingly, as the injury to the intellectual property occurred when the infringing content was sold in South Carolina, [], the requirement that the action arise out of the WWE’s activity in the forum is satisfied.

The Court also found that "WWE purposefully availed itself of the privileges and protections of South Carolina through introducing items in to the stream of commerce with the expectation of sales in South Carolina."

The court turns to "constitutional reasonableness," i.e even where there are sufficient minimum contacts with the forum state (here, South Carolina), "jurisdiction must also comport with notions of fair play and substantial justice."  The Court notes that the factor it considers include the "burden on the defendant of litigating in the forum, the forum’s interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief and the judicial system's interest in resolving the dispute."

In finding that it is reasonable to exercise personal jurisdiction over the defendants the Court holds:

First, the alleged financial resources of the Promoters do not appear to present any great burden to litigating in the South Carolina, and the Promoters have made no showing as to how litigating in this forum would be 'gravely difficulty' such that it would be placed at a 'severe disadvantage in comparison to [their] opponent.' [].  The court notes that the Promoters were able to secure counsel from a large national law firm to represent its interests. []. Furthermore, the court notes that the 'inequity of being haled into a foreign forum is mitigated if it was reasonably foreseeable that the defendant could be subject to suit there,' as is the case when a defendant enters the state to infringe another’s intellectual property.  As to prong two, South Carolina has an interest in protecting its citizen’s rights, especially from intentional torts committed by out-of-state actors. Third, Dash has a keen interest in obtaining relief in his home state, as opposed to Florida or Nevada. He also has a valid and substantial interest in protecting what property he has from being infringed and is entitled to use the judicial system in South Carolina to protect the same.

Having concluded that Dash had made a prima facie showing that personal jurisdiction is proper, the Court turned to defendants' request to transfer the case to Nevada which they claim is a more convenient forum.  Note that this alternative argument assumes jurisdiction but nonetheless submits that South Carolina is not the most convenient forum and so the case should be transferred.
 
The Court addresses both sides' arguments and agrees with Dash, holding that Dash's "choice of forum is entitled to 'significant weight,' South Carolina has a substantial interest in vindicating its citizens’ rights as against foreign tortfeasors, and the ease of access to sources of proof does not favor either side.
 
So while it appears that Pacquiao and Margarito will do battle in Texas come November, Mayweather, for now, will only be fighting in the courts.  
  
Fight Lawyer

Zuffa Gets Its Temporary Restraining Order Prohibiting Stream of UFC 118 at hq-streams.com

Following up on my posts, "Zuffa Files Lawsuit Seeking Injunction Preventing Potential Stream of UFC 118 at hq-streams.com" and "Zuffa Files Ex Parte Motion For A Temporary Restraining Order Re Streaming Website hq-streams.com," today Judge Mahan of the United States District Court for the District of Nevada entered a temporary restraining order.

Specifically, the TRO provides:

THEREFORE, IT IS HEREBY ORDERED THAT, pending a full trial on the merits:

A. Defendant, defendant’s agents, servants, employees and/or all persons acting in concert or participation with defendant are prohibited from copying, manipulating, adapting, reproducing, uploading, distributing, sharing, selling or displaying any of plaintiff’s Copyrighted Broadcasts and are prohibited from copying, manipulating, adapting, reproducing, uploading, distributing, sharing, selling or displaying UFC 118 in any manner;

B. Defendant, defendant’s respective officers, agents, servants, employees and/or all persons acting in concert or participation with defendant, are prohibited from using the UFC® Marks or confusingly similar variations thereof, alone or in combination with any other letters, words, letter strings, phrases or designs, in commerce or in connection with any business or for any purpose whatsoever (including, but not limited to, on websites, in domain names, in hidden text and metatags); and

C. A nominal bond of $100 shall be required because the evidence indicates that Defendant will only suffer, if at all, minimal damage by the issuance of this temporary restraining order and injunction.

Thus, under the terms of the TRO defendant is prohibited from streaming UFC 118 and using the UFC mark.

Notably, the Court did not go for Zuffa's additional requested relief, i.e ordering that "[t]he domain name registrar, GoDaddy.com, Inc., is ordered to take possession of <hq-streams.com> and ensure that it is not accessible to Internet uers [sic] until the Court rules on Plaintiff’s motion for preliminary injunction;"

Obviously this proposed relief would have put the defendant's site out of commission completely without affording defendant an opportunity to be heard.  This would have been a drastic remedy especially considering that defendant's site, as alleged, is not solely devoted to streaming UFC events.

The Court has set a hearing for the preliminary injunction motion for September 3, 2010 at 10 a.m. 


Fight Lawyer

Sakakibara's Lawsuit Against Spectrum Gaming Group, LLC et al. Arising From Sale of Pride to Zuffa Voluntarily Dismissed

On August 5, 2010, Judge Howard D. McKibben of the United States District Court for the District of Nevada entered an order dismissing an action filed in October 2009 by Nobuyuki Sakakibara against Spectrum Gaming Group, LLC, Spectrum OSA Asia, Ltd, Frederic Gushin, and NFC Global, LLC.

The amended complaint asserted claims for violations of the Fair Credit Reporting Act, defamation, and negligence, arising from a background check allegedly conducted by Spectrum in connection with the sale of Pride's assets in 2007 to Zuffa and the Fertittas. 

According to the allegations in the complaint, "the parties [Dream Stage Entertainment, a Japanese corporation, and Pride FC Worldwide (formerly known as Dream Stage Entertainment and renamed after the acquisition] agreed in Section 5.3 of the APA that as a condition to any undertaking by Pride FC Worldwide to consult with Sakakibara, Sakakibara would have to submit to and pass any reasonably necessary background checks and drug tests typically conducted by Pride FC Worldwide or its affiliates."

Sakakibara alleged that "[i]n addition to the consulting provision in the APA, Sakakibara entered into a separate Consulting Agreement with Pride FC Worldwide.  The term of the Consulting Agreement was from May 24, 2007 through May 24, 2011.  Under the terms of the Consulting Agreement, Pride FC Worldwide was required to pay a 'Consulting Fee,' as defined in the Consulting Agreement.  Pride FC Worldwide was required to make one immediate payment and then forty-eight (48) subsequent monthly payments (the "Monthly Consulting Fee") for the term of the Consulting Agreement."

Sakakibara alleged that as a result of an allegedly incomplete and erroneous background report by the defendants, Pride FC Worldwide allegedly withheld payment under the consulting agreement.  Specifically, Sakakibara alleged as follows:

Based on the incomplete and erroneous information contained in the Spectrum Group, Gushin and NFC's consumer reports alleging that Sakakibara failed to cooperate with his background check, was connected to organized crime in Japan, was a person of unsuitable character, lacked ethical fitness and engaged in acts of moral turpitude, Pride FC Worldwide took an adverse action against Sakakibara by refusing to make the Monthly Consulting Fee payments.

Defendants had filed a motion to dismiss the amended complaint that was pending before the Court -- and set to be argued on August 6, 2010 -- that was vacated as a result of the so-ordered stipulation of dismissal with prejudice.

Notably, the dispute between Zuffa and Dream Stage/Sakakibara was the subject of two separate lawsuits--one in federal court (since dismissed) and one in state court.  The background of this dispute is set forth over at Fightopinion.com.
 
Fight Lawyer

Zuffa Files Ex Parte Motion For A Temporary Restraining Order Re Streaming Website hq-streams.com

Following up on my earlier post, "Zuffa Files Lawsuit Seeking Injunction Preventing Potential Stream of UFC 118 at hq-streams.com," it appears that Zuffa has filed an emergency motion for an ex parte temporary restraining order.  Ex parte simply"[r]efers to situations in which only one party (and not the adversary) appears before a judge."  Thus, Zuffa is asking the court to grant the TRO without hearing from the defendant.

While the motion, which should be Doc No. 2, does not appear on the docket sheet, Zuffa filed a proposed order on the motion providing, inter alia, as follows:

"A.   Defendant’s agents, servants, employees and/or all persons acting in concert or participation with Defendant are prohibited from copying, manipulating, adapting, reproducing, uploading, distributing, sharing, selling or displaying any of Plaintiff’s Copyrighted Broadcasts and are prohibited from copying, manipulating, adapting, reproducing, uploading, distributing, sharing, selling or displaying UFC 118 in any manner.  B.  The domain name registrar, GoDaddy.com, Inc., is ordered to take possession of <hq-streams.com> and ensure that it is not accessible to Internet uers [sic] until the Court rules on Plaintiff’s motion for preliminary injunction;" 

Given that it is Wednesday -- and UFC 118 is on Saturday -- and given that prior UFC ppv's have allegedly been improperly streamed, I wonder whether the judge will be willing to entertain this motion ex parte.  It doesn't seem unreasonable to at least give the defendant the opportunity to be heard before ruling on the motion.

Fight Lawyer

East Harlem After School MMA Project Update -- Thank You Everlast

I wanted to provide an update on developments since my post, Help Support Martial Arts Program for Teens in East Harlem."  As you may recall, the funding was cut for an after school martial arts/self-defense program for high school students at Park East High School (04M495), who were particularly interested in learning MMA, and we are attempting to keep this worthy cause going.

I am happy to report that Everlast has taken the lead and donated the initial essential equipment we need to offer the program for the coming school year.  So a huge thank you to Everlast for supporting this worthy cause and generously providing some great free gear for the students.   We are now well on our way but the battle has only begun.

We will still need some additional basic equipment, including additional pairs of training gloves, and we will need financial support in order to continue to offer the program and to grow.

In this regard, we will be starting to raise funds shortly and are in the process of setting up a non-profit to do so.  We are also planning to have a fund-raising event in New York City in the near future.

If you are interested in helping us -- either with time, equipment, by donating money, or in any possible way -- please let us know by either emailing me or David Grodsky, dgrodsk@gmail.com.

Thank you for the support.

Fight Lawyer

Zuffa Files Lawsuit Seeking Injunction Preventing Potential Stream of UFC 118 at hq-streams.com

On August 24, 2010, Zuffa filed a lawsuit in the United States District Court for the District of Nevada against Johnny Tike, who allegedly "owns and operates a website located at <hq-streams.com> [] that regularly sells 'live streams' of pay-per-view events, including MMA contests and exhibitions, boxing, and wrestling matches, for a fee ranging from $6.50 to $6.99."

According to the allegations in the complaint, "Defendant also offers Internet users the opportunity to purchase a subscription for all of the events 'streamed' on the website for a fee of $11.99 per month."

Zuffa alleges, upon information and belief, that "Defendant’s Website has previously offered unauthorized 'live streaming' video of Copyrighted Broadcasts, including, but not limited to, UFC 113, which took place on May 8, 2010, UFC 117, which just occurred on August 7, 2010, for a fee of $6.99."  Zuffa further alleges as follows:

Based upon Defendant’s history of offering 'live streaming' of Plaintiff’s past events, as well as those of other MMA providers, Plaintiff is informed and believes that Defendant’s Website will similarly offer an unauthorized 'live streaming' video of UFC 118 on August 28, 2010, the date of the event.  Plaintiff is informed and believes that Defendant will sell 'live streaming' of UFC 118 for a fee ranging from $6.50 - $6.99. The lowest retail price for which a member of the general public can order the authorized live broadcast of UFC 118 is $44.95.  Upon information and belief, the 'live streaming' video of Copyrighted Broadcasts displayed on Defendant’s Website were uploaded or posted by Defendant or Defendant’s agents or employees.

Zuffa also alleges that Defendant has made "unauthorized widespread use of the UFC® Marks on the website, including, but not limited to, reproducing and displaying a copy of Plaintiff’s advertisement for UFC 118" and that Defendant "uses the UFC® Marks in hidden text located in metatags," which are "self-selected key words embedded in the source code of a website that are 'invisible' to the web user but which are 'visible' to search engines."

Zuffa asserts claims for:  (1) Infringement Under the Copyright Act and Digital Millennium Copyright Act, 17 U.S.C. §§ 102(a)(6), 106(4) and 501"; (2) Contributory Copyright Infringement; (3) Vicarious Copyright Infringement; (4) Trademark Infringement under 15 U.S.C. § 1114; (5) Unfair Competition under 15 U.S.C. § 1125(a); (6) Trademark Dilution under 15 U.S.C. § 1125(c); (7) Common Law Trademark Infringement; (8) Deceptive Trade Practices under N.R.S. § 598.0903, et seq.; and (9) Intentional Interference with Prospective Economic Advantage.

In its prayer for relief, Zuffa seeks, inter alia, (1) a "temporary restraining order, preliminary and permanent injunction preventing Defendant’s agents, servants, employees and/or all persons acting in concert or participation with Defendant from copying, manipulating, adapting, reproducing, uploading, distributing, sharing, selling or displaying any of Plaintiff’s Copyrighted Broadcasts"; (2) "statutory damages of up to $150,000 per infringement, or, in the alternative, all actual damages suffered by Plaintiff and all profit earned by Defendant attributable to the infringements"; (3) "its full costs in litigating this matter, including reasonable attorneys’ fees; (4) "a constructive trust for the benefit of Plaintiff on all revenue generated by Defendant from the infringement of the Copyrighted Broadcasts, or any substantially similar products, and from Defendant’s other tortious conduct."

I have not yet seen Zuffa's papers in support of its application for a TRO, but given that UFC 118 is this weekend, a TRO application would likely be heard by the court very soon.  One thing to note, as alleged, Zuffa is informed and believes that "Johnny Tike is an individual residing in Jamaica, New York." 

Fight Lawyer

Update On My Response to the Canadian Medical Community Concerning Recommending MMA Ban

Following up on my post, "My Response to Recent Attacks on MMA by the Medical Community in Canada (updated 8-23-2010)," I just learned via Fightopinion.com that the "Canadian Medical Association passes resolution recommending MMA ban."

I wonder if the Canadian Medical Association actually (and/or credibly) compared the risks of MMA to football and its beloved hockey in reaching its decision to pass the resolution.  I also wonder if the Medical Association actually looked at the relevant medical literature, including Dr. Bledsoe et al.'s research article.  My guess, probably not.

Apparently, 84% of the delegates at the meeting voted in favor of the resolution.

Fight Lawyer

Burstein Files Motion to Withdraw As Affliction's Counsel in M-1/Fedor Action

As discussed in this update about the Affliction, M-1 and Fedor litigation over at MMAPayout.com, Affliction brought in New York lawyer Judd Burstein as defense counsel in its lawsuit earlier this year. I have covered this litigation extensively.

According to the docket, on February 5, 2010 Judge Margaret Morrow signed an Order granting Affliction's request to have "Steven A. Silverstein to substitute as attorney of record in place and stead of Michael H. Bassiri" and terminating Bassiri as counsel."

On July 20, 2010, Judge Morrow granted Judd Burstein's application to appear pro hac vice as counsel for Affliction.  Thus, at least as of July of this year, Judd Burstein was representing Affliction.

Well it appears Burstein's involvement may be short-lived because on August 23, 2010 Burstein filed a motion to withdraw as counsel for Affliction.

In his declaration in support of the motion, Burstein states, inter alia:

Defendants have decided that it is unnecessary to employ two sets of counsel in this matter, i.e. (a) the attorneys at Silverstein and Huston, and (b) me.  Accordingly we have decided together that it is best for me to withdraw from this action.  As a result, Defendants have given their consent to the relief sought herein.  In particular, Defendants advised me of their consent on August 9, 2010.

Fight Lawyer

Bellator Removes Zuffa's Nevada Action to Federal Court

Following up on my coverage of Zuffa's lawsuit against Bellator and Pavia Holdings, LLC filed in Clark County District Court on July 28, 2010, on August 23, 2010, Bellator filed a petition (in federal court) seeking to remove the case from state court to the United States District Court for the District of Nevada.

The basis for removal is diversity jurisdiction. 

In its petition for removal (which Pavia Holdings filed its consent to), Bellator provides the basis for removal as follows:

Removal is appropriate pursuant to 28 U.S.C. § 1441(a) because this Court has original jurisdiction over this case based on Diversity of Citizenship pursuant to 28 U.S.C. § 1332. Pursuant to the claims set forth in Plaintiff's Complaint, and irrespective of the fact that Plaintiff has only specified damages in excess of $10,000, Bellator believes that Plaintiff is seeking in excess of $75,000 in damages, exclusive of interests and costs, and diversity of citizenship exists between Plaintiff, a Nevada Limited Liability Company, and Defendant Bellator, a Delaware Limited Liability Company and Pavia Holdings, LLC, a California Limited Liability Company.

For those of you who are interested, 28 U.S.C. § 1441 provides, in relevant part, as follows:

(a) . . . any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. For purposes of removal under this chapter, the citizenship of defendants sued under fictitious names shall be disregarded.

28 U.S.C. § 1332 provides that the federal courts have original jurisdiction in diversity cases.  Specifically, Section 1332 provides in relevant part as follows:

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between—

(1) citizens of different States; . . .

(c) For the purposes of this section and section 1441 of this title—

(1) a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business, . . .

It appears that the parties are "citizens of different states" so the issue here, as you may have guessed, is the amount in controversy. 

Zuffa is seeking "damages in excess of Ten Thousand Dollars ($10,000.00)", which on its face falls short of the $75,000 minimum set forth in Section 1332.  However, Zuffa is also seeking an injunction, which, as set forth below, the federal court will likely consider in valuing the amount in controversy for purposes of jurisdiction.   

If Zuffa moves to remand the action back to state court (or the Court raises the issue on its own), it will be Bellator's burden to demonstrate by a preponderance of the evidence that the amount actually at stake is higher than the jurisdictional threshold. 

As the Ninth Circuit has stated (the Ninth Circuit hears appeals from the District Court in Nevada):

To support removal based on diversity jurisdiction, Petsmart has the burden of proving, by a preponderance of the evidence, that the amount in controversy exceeds $75,000. See Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.1996); 28 U.S.C. § 1332.

This evidence [a settlement demand] is sufficient to establish the amount in controversy. The heart of Cohn's suit is his request for injunctive and other equitable relief. "In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation." Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). The undisputed evidence shows that Cohn values his trademark rights — the object of the litigation — as worth more than $100,000. As the amount in controversy exceeded $75,000, the case was properly removed to federal court.

Thus, here, although Zuffa only asked for (at least) $10,000, if necessary, Bellator will attempt to come forward with evidence that the value of the injunctive relief requested in Zuffa's complaint in conjunction with the monetary demand satisfies the threshold.

The good news for us is that we can more easily monitor the case electronically if it is in federal court.

Fight Lawyer

My Response to Recent Attacks on MMA by the Medical Community in Canada (updated 8-23-2010)

I recently came across the article, "What mixed martial arts leagues still need to learn from the NFL about head injuries," by Dr. Tim Rindlisbacher, which essentially attacks MMA "leagues" for failing to conduct research on the long-term effects of head injuries sustained due to concussion.  The crux of the piece, as you may have guessed from the title, is that MMA promoters are failing to do what the wonderfully proactive NFL has done in conducting research to protect its players.

The Montreal Gazette also noted this week that the the B.C. Medical Association is planning to bring a resolution banning MMA in Canada to the "Canadian Medical Association’s annual general meeting at Niagara Falls, Ont., from Aug. 23 to 25.  If the national group agrees to adopt the resolution, it will lobby the federal government to work with the provinces to bring an end to MMA contests in the country."

At the outset, and as you may have guessed from the title of this blog, I am not a doctor -- I am a lawyer -- so I can't necessarily grasp all of the specific medical concepts surrounding the impact of concussions for athletes later in life. 

That said, I am perfectly capable of seeing through an unsubstantiated hack-job "opinion" of a doctor who fails to provide an iota of evidence (or scientific support) in his article -- an article clearly designed to mislead and set-back MMA and provide ammunition for the misinformed, like New York State Senator Liz Krueger.  I am also perfectly qualified to see through the superficial "talking points" of directors of "organizations" on a crusade to ban a sport that they know nothing about.

The Actual Medical Research

Let's start with the medical research that Dr. Tim Rindlisbacher fails to mention or address, i.e. the actual research conducted to date by professionals on the health risks of MMA --don't worry, I am not going to pretend that MMA is without risks, it is.

In a Johns Hopkins research article published in July 2006, doctors noted that MMA injuries are comparable to other combat sports that involve striking and concluded that the lower knockout rates in MMA suggest a reduced risk of traumatic brain injury when compared with other striking sports such as boxing.  Gregory H. Bledsoe, et al., Incidence of Injury in Professional Mixed Martial Arts Competitions, 5 J. SPORTS SCI. & MED. 136, 140 (2006). 

In the Johns Hopkins article, the authors recognize that "[w]ith the growing concern over repetitive head injuries and the risk of dementia pugilistica among career boxers, decreasing the number of head blows a fighter receives during a match has been promoted as an important intervention (Mendez, 1995; Unterharnscheidt, 1995)." 

The authors note that a fighter's ability to "tap out" in MMA, "combined with more options of attack when competing, is thought to help explain a knockout proportion in MMA competitions that is almost half of the reported 11.3% of professional boxing matches in Nevada [internal citation omitted]."  Specifically, in MMA, "the opportunity to attack the extremities with arm bars and leg locks and the possibility of extended periods of grappling could serve to lessen the risk of traumatic brain injury. When TKOs are compared, proportions between professional boxing (38%) and MMA are similar (Bledsoe et al., 2005)."

Despite this study (or in willful ignorance of it), the Director of the Alberta Centre for Injury Control and Research at the University of Alberta, Don Voaklander, recently told the Montreal Gazette "'[a]bsolutely, our organization would be 100 per cent behind that [a ban on MMA].”  "With experience in head injury, Voaklander has concerns about the severity of the blows mixed martial arts participants take to the head.  Boxing is less than ideal, but at least in that sport participants are wearing heavy gloves which mitigate blows to the head."

Ignored by Voaklander (and others), however, is the fact that the lighter MMA gloves, with open fingers, permit a fighter to take the fight to the ground.  As recognized in "Incidence of Injury in Professional Mixed Martial Arts Competitions," supra, "[t]he mandatory 'grappling' gloves now used in MMA events weigh between 4 to 8 ounces, thinner than the 8 to 10 ounce gloves worn by professional boxers, and are designed with the fingers exposed so a fighter can grasp his opponent."  "[T]the possibility of extended periods of grappling could serve to lessen the risk of traumatic brain injury."  Further, and intuitively, instead of taking multiple blows to the head, a fighter in trouble can attempt to take the fight to the ground.

Moreover, as set forth in David Plotz's article in Slate, "[t]he purpose of boxing gloves is not to cushion the head but to shield the knuckles. Without gloves, a boxer would break his hands after a couple of punches to the skull. That's why ultimate fighters won't throw multiple skull punches. As a result, they avoid the concussive head wounds that kill boxers--and the long-term neurological damage that cripples them."

The NFL and Concussion Research

Now on to the NFL.  At the outset, it is strange that Dr. Rindlisbacher is comparing concussion research initiatives between an organization that has been around since 1920 with MMA "leagues" that only started receiving recognition (and acceptance) in 2000/2001 with the Unified Rules of Mixed Martial Arts. 

Also, it is strange that Dr. Rindlisbacher is faulting MMA promoters, as opposed to the respective athletic commissions that are responsible for setting rules and regulations, including medical requirements designed to protect the fighters.  I guess it was just more convenient for Dr. Rindlisbacher to attack the promoters in his hatchet job piece because they are the entities making the bulk of the profit and, with boxing as the masses are familiar, promoters often have less than stellar reputations.    

Nonetheless, let's look at what the NFL has been doing to protect its players.  In 2007, as set forth in this NY Times article, the NFL "enacted measures that required all players to undergo baseline neuropsychological testing and then be retested before being cleared to play; forbade players who were knocked unconscious to return to play the same day; and set up a hot line through which players could report being pressured to play against a doctor’s advice."

The hot line was in response to the Ted Johnson story, detailed in this article, "'I don't want anyone to end up like me'" in which Ted Johnson describes how he was allegedly forced to return to play by New England Patriots coach Bill Belichick too soon after having suffered a concussion.  Belichick denies the accusations.

Perhaps more importantly, however, as of early 2009 -- and a set forth in this CNN article, "Dead athletes' brains show damage from concussions," the NFL was still hardly out in front on the issue. 

Ted Johnson was one of the first to sign up [consented to have his brain studied after he dies] . He said he believes that concussions he suffered while playing football explain the anger, depression and throbbing headaches that occasionally still plague him.

Johnson said he played through concussions because he, like many other NFL athletes, did not understand the consequences. He has publicly criticized the NFL for not protecting players like him.

'They don't want you to know,' said Johnson. 'It's not like when you get into the NFL there's a handout that says 'These are the effects of multiple concussions so beware.'

In a statement, the NFL indicated that their staffs take a cautious, conservative approach to managing concussions.

While they support research into the impact of concussions, they maintain that, 'Hundreds of thousands of people have played football and other sports without experiencing any problem of this type and there continues to be considerable debate within the medical community on the precise long-term effects of concussions and how they relate to other risk factors.'

The NFL is planning its own independent medical study of retired NFL players on the long-term effects of concussion.

So, as of January 27, 2009, the NFL, which has been around since 1920, was only "planning" its own independent medical study.  Impressive indeed Dr. Rindlisbacher.

In fact, it wasn't until congressional hearings in late-2009 where the NFL was compared to the tobacco industry that the NFL took additional, more serious, steps to deal with these issues.

Specifically, "[o]n Oct. 28 [2009] in Washington, lawmakers questioned NFL Commissioner Roger Goodell about the league's approach to concussions and grilled him on whether head injuries in football can be linked to brain disease. Since then, Goodell has announced stricter return-to-play guidelines that make it tougher for players to get back on the field after head injuries and has made every team enlist an independent neurologist who can be consulted when players have concussions."

In fact, as of January 2010, at a follow-up Congressional hearing, "Dr. Ira Casson, a symbol of the N.F.L.’s reluctance to recognize mounting evidence linking professional football and dementia before his resignation as co-chairman of a league committee on brain injuries, continued to deny the existence of any such relationship while testifying before a House Judiciary Committee hearing Monday." 

According to the New York Times article, Dr. Casson stated in his written statement before his testimony (in January 2010) that “'[m]y position is that there is not enough valid, reliable or objective scientific evidence at present to determine whether or not repeat head impacts in professional football result in long-term brain damage.'”

While Casson and and the co-chairman of the league’s committee on concussions, Dr. David Viano, both resigned in November 2009, it is a bit perplexing that Dr. Rindlisbacher holds the NFL's efforts with respect to concussions in such high regards when the individuals charged with dealing with the issue up until late-2009 were in denial.

While we are talking about concussions, sports, and Canada, what about Hockey?

I thought it was interesting that a Canadian doctor focused his piece on football instead of hockey, which has a high concussion rate itself.

As set forth in an article at Newobserver.com, "NHL may be poised to curb concussions," there was a meeting in November 2009 of the NHL general managers to discuss, inter alia, the long term affects of concussions on players.  According to the article, Dr. Kevin Guskiewicz, "who heads the sport concussion program at UNC-Chapel Hill and is research director for the Center for the Study of Retired Athletes" stated as follows:

"'Hockey has so many unanticipated impacts, where you don't see the hit coming,' he said. "The body is ill-prepared to steady itself and give good support to the head. ... In hockey, you often have two players moving in opposite directions at top speed - the perfect storm.' 

         *                         *                           *

Guskiewicz said hockey has been slow to change, saying the sport introduced 'testicular cups' in 1873 for protection but didn't begin making helmets mandatory until 1979.

'I guess it took them more than a hundred years to realize the brain is just as important,' he said.

Guskiewicz said helmets are not designed to fully prevent concussions. Guskiewicz said a three-year study involving the Junior Hurricanes, a youth hockey program sponsored by the Carolina Hurricanes, has been revealing. The junior players' helmets have accelerometers that gauge impacts.  'The average magnitude of the hits, 19 to 20 Gs, are nearly identical to [hits of] football players,' he said.

A December 2009 article in the New York Times, Brain Damage Found in Hockey Player, describes how "Reggie Fleming, a defenseman and left wing known for fighting as much as scoring in a long career from 1959 to 1974, was found by Boston University researchers to have chronic traumatic encephalopathy, a neurodegenerative disease known to cause cognitive decline, behavioral abnormalities and ultimately dementia."

With respect to general precautions after a head injury, the article notes as follows:

The N.H.L. and the N.H.L. Players Association jointly administer the league’s protocol for players returning from concussions, which has been in place since 1997-98. The program was the first in pro sports to mandate independent baseline and postconcussion neuropsychological testing, as well as clearance from independent doctors before a player can return to game action. A similar protocol was adopted by the N.F.L. only last month.

In recent years the N.H.L. has experienced several incidents of head injuries to its players. But unlike in Fleming’s day, most of today’s concussions are caused by checks to the head delivered at high speed with players’ shoulder pads. The league’s general managers have consistently declined to take steps curbing such hits, which are legal under N.H.L. rules.

While checks to the head are barred in the Ontario Hockey League, there are still other causes of concussions in hockey. 

Whether Dr. Rindlisbacher used hockey as the comparative sport (or football), the result would have been the same -- a superficial attack on MMA designed to undermine a growing sport.

Dr. Rindlisbacher should stick to science and not baseless comparisons that lack scientific (or factual) support.

Update (8-23-2010):  I checked out Dr. Rindlisbacher's biography -- I was going to email him this post -- and it turns out he is extensively involved with hockey and, in fact, he is a consultant to the NHL.  This brings me back to my point above, i.e. what about hockey Dr. Rindlisbacher? 

Why did you choose the NFL and not the sport that you are so extensively involved with and "enjoy playing" to launch a comparative attack against MMA? 

For ease of reference, below is directly from his biography:

• "enjoys playing hockey" 
• "has acted as team physician for the Toronto Raptors, Buffalo Bills, Toronto Argonauts and Toronto Roadrunners Hockey Club"
• "He has provided team medical coverage to junior hockey teams for over 12 years including the Mississauga Ice Dogs, Mississauga St. Michael's Majors and Team Canada ‘Under 18’ Men's and World Junior National Teams"
• He "is a consultant to the National Hockey League Players Association"  

Notably, I did not see any mention in his biography about specific concussion research or expertise.
Fight Lawyer

"Pacquiao vs Mayweather Lawsuit Will Head to Trial" -- Should Be "May"

I just read over at BoxingScene an article titled, "Pacquiao vs Mayweather Lawsuit Will Head to Trial," and thought for a minute that the court denied the defendants' motions to dismiss Pacquiao's defamation claims and perhaps set a schedule with a trial date. 

Upon further reading, however, it became evident that this was no the case.  The relevant quote from Daniel Petrocelli, i.e. Pacquiao's lawyer, provides as follows:

'We think that it will go to trial, but given how the process works, it won't be anytime this year, but probably sometime next year.  There is no schedule set.' (emphasis added).

I checked the docket to be sure and there has been no ruling on the various motions pending before the judge.

I am not surprised Petrocelli would say that he thinks the case will go to trial -- implying that he will get by the motions to dismiss -- because that is what his client wants to hear and he probably believes it.

In any event, as you can see from my previous posts on the topic, I do think the motions to dismiss will be denied but that does not necessarily mean this case won't be resolved at the summary judgment stage, i.e. before trial.

Fight Lawyer

Texas And Margarito License -- The Law And Rules Governing "Other" Jurisdiction Sanctions

In this article, "Antonio Margarito denied boxing license," ESPN's Dan Rafael describes Margarito's hearing before the California State Athletic Commission yesterday where he sought "a license from the commission that revoked his license in February 2009 following his knockout loss to Shane Mosley the previous month." 

Rafael describes the circumstances leading to the revocation as follows:

In the dressing room before Margarito faced Mosley at the Staples Center in Los Angeles, illegal inserts were discovered in each of his hand wraps after Mosley's trainer, Naazim Richardson, objected to the way his hands had been wrapped. The wraps were cut off and the illegal pads, which were coated in a plaster-like substance, were discovered. Margarito's hands were re-wrapped. The fight went off with Mosley knocking Margarito out in the ninth round to win the title.

The CSAC voted 5-1 denying Margarito his license yesterday after a six (6) hour hearing.  Margarito is now expected to ask Texas for a license to fight Pacquiao in November 2010. 

I checked the Texas Combative Sports Occupations Code to see the specific provision addressing the effect of sanctions (specifically, revocation or suspension) issued by other jurisdictions on a fighter's ability to get a license in Texas.

Specifically, COMBATIVE SPORTS, Occupations Code, Title 13. Sports, Amusements, and Entertainment, Subtitle B. Sports, Chapter 2052.052(b) provides in relevant part as follows:

(b) The commission may adopt rules:

(3) recognizing a sanction, medical suspension, or disqualification of a licensee or registrant by a combative sports authority in any state, provided that if licensure ore registration is denied based on those actions, an applicant has an opportunity for a hearing as prescribed by rule; 

The relevant rule promulgated under Chapter 2052, COMBATIVE SPORTS, Administrative Rules of the Texas Department of Licensing and Regulation, 16 Texas Administrative Code, Chapter 61.30(e) provides as follows:

The Executive Director may recognize and enforce disciplinary sanctions, disqualification, or medical suspensions imposed by other combative sport authorities. If the Executive Director proposes to deny licensure based on action of another jurisdiction, the applicant has a right to an opportunity for a hearing.

Accordingly, if Margarito seeks a license in Texas, the operative word is "may," i.e., the Executive Director has discretion concerning whether he will recognize the revocation in California.  If he does intend to deny the license on the basis of the CSAC revocation, the commission must provide Maragrito with a hearing.

Bottom line, there is still a chance this fight will happen in Texas and the question is how much weight will the TX commission give the CSAC revocation -- and the ruling yesterday after six (6) hours of testimony.

Fight Lawyer

More On Infinite Health -- Colorado Facility That Distributed Anabolic Steroids

In my post yesterday, "More Information On The Illegal Distribution Of Steroids By Alabama Pharmacy," I provided additional information concerning customers of Infinite Health who allegedly received steroids based upon the Factual Resume -- a document submitted with a plea agreement and used as evidence at the guilty plea hearing -- of a Colorado Doctor, Kelly W. Tucker M.D.

Here is additional information from the Factual Resume concerning how Tucker described the Infinite Health/Applied Pharmacy interplay (available via Pacer):

Typically, Infinite Health customers would consult with Branch, paying a fee of $395.00, which included the cost of blood tests. Next, Branch, who is not a physician, would determine what combination or "stack" of anabolic steroids - including Trenbolone, a bovine/equine steroid not approved for human use - and other drugs, including HGH, were appropriate for the customer. Generally, Branch would fill out a prescription - a preprinted form on which Branch checked off drugs and specified dosages - and fax it or hand deliver it, or cause it to be faxed or delivered, to TUCKER, Dr. Olds, or Dr. Corliss, along with the customer's blood test results. Branch's customer would then see the physician, who would sign the prescription/order that Branch prepared. Next, the physician would fax the order, or cause it to be faxed, to Applied Pharmacy in Mobile. For each customer who obtained a prescription, Branch paid the physician $100. APS, in tum, would fill the order and ship the drugs via Federal Express, sometimes to the customer's address and sometimes to Branch. The customers paid for the drugs personally since Applied Pharmacy generally did not do business with insurance companies.

According to the Factual Resume, Tucker's specific involvement is described as follows:

Branch approached TUCKER in April or May of 2005 and asked if he would be interested in working as a physician with Infinite Health.  TUCKER agreed to see Branch's customers. From May to September, 2005, Branch saw Infinite Health customers and authorized prescriptions formulated by Branch, as generally described above, for $100 per customer.  In September 2005, TUCKER, Branch and Winter went to dinner, where they formalized an agreement for TUCKER and Winter to invest in Infinite Health. On September 29, 2005, TUCKER purchased five shares of Infinite Health stock - which equaled 50% of Infinite Health's business - for $60,000. Thereafter, TUCKER continued to see Infinite Health customers without the $100 fee, although Branch promised TUCKER that he would soon begin to receive 5% of Infinite Health's earnings. In actuality, Branch never distributed any earnings to TUCKER. Nevertheless, as late as August, 2006, Branch and TUCKER discussed expanding Infinite Health's customer base and recruiting new doctors.  Winter also invested in Infinite Health. As Branch's partner, Winter would sometimes drop off paperwork for the customers who were scheduled to meet with TUCKER. Winter and Branch always dealt directly with TUCKER; he did not interact with the staff at TUCKER'S clinic.

Fight Lawyer

More Information On The Illegal Distribution Of Steroids By Alabama Pharmacy

Following up on my post, "Professional Athletes Linked to Alabama Pharmacist Convicted of Illegal Distribution of Steroids," here is additional information from the Factual Resume -- a document submitted with a plea agreement and used as evidence at the guilty plea hearing -- of a Colorado Doctor, Kelly W. Tucker M.D. (available via Pacer):

What follows is a description of 84 Infinite Health customers whom Branch referred to TUCKER, and for whom TUCKER prescribed anabolic steroids and other drugs consistent with Branch's recommendations. The prescriptions signed by TUCKER were faxed to Applied Pharmacy in Mobile, Alabama, where the orders were filled and shipped. Often, the orders included the cost of needles, syringes, alcohol swabs, as well as shipping and handling costs.  The orders filled by APS, as detailed below, totaled approximately $90,000.

            *                          *                          *

18.  S.C. - On or about January 18, 2006, Branch completed a prescription form and recommended to TUCKER that S.C., a 31 year old male, should receive Testosterone Blend (ICED), Trenbolone Acetate, Stanozolol, HGH, and Anastrozole, with three refills. TUCKER signed the prescription and faxed it to APS. J. Mallory Mallon filled the order, which included three vials of Testosterone Blend (ICED), three vials of Trenbolone Acetate, three vials of Stanozolol, and 30 capsules of Anastrozole. S.C. paid $530.45 for the drugs. The HGH was filled at a later time.

On or about April 7, 2006, Branch completed another prescription form and recommended to TUCKER that S.C. should receive Testosterone Blend (ICED), Nandrolone Decanoate, Stanozolol, and Anastrozole, with six refills. TUCKER authorized the prescription which was faxed to APS. On or about April 12, 2006, J. Mallory Mallon filled the order, except for the Testosterone Blend (ICED). The drugs cost $207.50.


On or about May 1, 2006, S.C. requested and received refills of Testosterone Blend (ICED), Nandrolone Decanoate, Stanozolol, and Anastrozole from APS. The refill order was filled by J. Mallory Mallon. S.C. was charged $235.75. The next day, on or about May 2, 2006, S.C. requested and received another vial of Stanozolol. J. Mallory Mallon filled the order and S.C. paid $26.75 for the drug.

On or about May 11, 2006, Branch filled out a prescription form recommending that TUCKER prescribe HCG, with one refill, for S.C. TUCKER approved the prescription and faxed it to APS. The prescription was placed 'on hold.'

On or about June 5, 2006, Branch prepared a prescription form recommending that TUCKER prescribe HCG and Vitamin B 12, with three refills, for S.C. TUCKER signed the prescription form and faxed it to APS. The prescription was placed 'on hold.' Two days later, on or about June 7, 2006, S.C. requested and received the following drugs, which were either initial fills or refills: Testosterone Blend (ICED), Nandrolone Decanoate, two vials of Stanozolol, Anastrozole, HCG, and Vitamin B12 injections. J. Mallory Mallon filled the order, which cost $301.50.

On or about June 13, 2006, S.C. received three vials of the HGH that had been placed 'on hold.' S.C. paid $442.64 for the HGH. 

On or about July 31, 2006, S.C. requested and received refills of the Testosterone Blend (ICED), Nandrolone Decanoate, two vials of Stanozolol, Anastrozole, HCG, and Vitamin B 12.  J. Mallory Mallon filled the order, and S.C. paid $301.50 for the drugs.

On August 4, 2006, Branch completed a prescription form and recommended to TUCKER that S.C. receive Anastrozole. TUCKER authorized the prescription, which was faxed to APS.


On or about August 21, 2006, S.C. requested and received refills of the Testosterone Blend (ICED), Nandrolone Decanoate, two vials of Stanozolol, Anastrozole, and Vitamin B12.  J. Michael Bennett filled the order and S.C. was charged $294.50 for the drugs.

Fight Lawyer

Affliction Sues Its Distributor In Mexico

Given that Affliction has resolved two cases in the past two weeks (see my posts "Affliction Knocks Another Lawsuit Off its List-- Chrome Hearts and Affliction have Reached a Settlement in Principle" and "M-1 Global and Affliction's Lawsuit with Freeplay Music Dismissed"), I was beginning to think that Affliction had enough with litigation period. 

Well, it appears that I was wrong.

On August 16 2010, Affliction filed a complaint against Oficina De Representaciones Mundiales S.A De C.V. ("ORM") and Eduardo Kurian in the United States District Court for the Central District of California.

According to the complaint, "[o]n or about October of 2009, Affliction and Defendants, entered into a written Distribution Agreement whereby Affliction appointed Defendants as the exclusive distributor in Mexico for the Affliction and Sinful clothing brands[]."  The distribution agreement was allegedly signed by "Kurian [] on behalf of ORM dba as Eduardo Kurian."

As an aside, I checked the Affliction website and Kurian is still listed as the Affliction distributor in Mexico.

Affliction alleges that under the distribution agreement, defendants "were obligated to purchase a minimum of $1,000,000 of Affliction Products during the period October 1, 2009 until March 31, 2011" and that "[d]espite Defendants' placement of orders and receipt of Affliction Products, Defendants have failed to remit payment in the amount of $242,518 as of the filing of this Complaint."

Further, Affliction alleges that it:

also advanced the sum of $125,000 to hold a launch party in Mexico City in furtherance of Defendants' duties and obligations under the Distribution Agreement. Defendants have not repaid the advanced monies nor have they complied with the terms of the Distribution Agreement.

The complaint contains five (5) counts:  (1) breach of contract (for the $367,000); (2) breach of the implied covenant of good faith and fair dealing; (3) promissory estoppel (for the $125,000); (4) declaratory relief; and (5) injunction. 

One thing to note, although Affliction seeks the entire $367,000 in its breach of contract claim, the fact that it is also seeking the $125,000 "advance" under a promissory estoppel theory suggests that the "advance" was not contemplated in the written distribution agreement (Affliction claims the distribution agreement is attached to the complaint, but it was not available on-line).

Fight Lawyer

Dawson Pascal and the Rematch Clause

On Saturday night "Bad" Chad Dawson suffered a unanimous technical decision loss to Jean Pascal after Dawson suffered a deep cut from an accidental head butt in the 11th round and the Dr. called a stop to the fight.

Pascal was ahead on all three judges' scorecards, but Dawson had gained momentum in the 10th and appeared to have Pascal badly hurt in the 11th prior to the clash of heads.

Needless to say, Dawson was not pleased with the decision.  He also indicated in his post-fight interview that he had a rematch clause in his contract with Pascal.  The rematch clause apparently provides that Pascal can take another fight prior to taking the rematch with Dawson. 

I have tackled the issue of rematch clauses before.  Specifically, leading up to the Mayweather Mosley fight I addressed the issue (more specifically, whether one has been enforced) and stated then as follows:

It turns out there has been at least one such case that was right here in the United States District Court for the Southern District of New York. After Hasim Rahman took Lennox Lewis' belt in April 2001, he refused to honor his contractual obligation to give Lewis a rematch. Instead, Rahman was attempting to fight another fighter. In a decision in June 2001, Judge Cedarbaum enjoined Rahman from fighting for 18 months unless he fought Lewis first. In effect, instead of forcing Rahman to fight (specific performance) she enjoined (stopped him) from fighting anybody else for 18 months unless he gave Lewis the rematch first. Thought that was interesting. I haven't seen the decision, but it also seems that nothing would have precluded Lewis from also seeking monetary damages.

Given that Pascal apparently gets to fight once before giving Dawson the rematch, I assume that if Pascal were to lose his next fight, Dawson could have an entirely different view about whether he will exercise his contractual right to a rematch. 

Nonetheless, for now at least, it appears that we will see these two in the ring again.

Fight Lawyer

Professional Athletes Linked to Alabama Pharmacist Convicted of Illegal Distribution of Steroids

There are reports from a number of sources (hat tip Bloody Elbow) that a number of professional athletes, including one "professional fighter" were allegedly recipients of illegal steroids from a pharmacist sentenced yesterday in the United States District Court for the Southern District of Alabama. 

According to the the United States' Sentencing Memorandum:

After a 5-week trial, J. Michael Bennett, a compounding and supervising pharmacist at Applied Pharmacy Services, Inc. (APS), was found guilty of conspiring to illegally dispense and distribute anabolic steroids outside the usual course of professional practice and not for a legitimate medical purpose (count 1); illegal distribution of anabolic steroids (counts 28, 29); and illegal distribution of anabolic steroids to a person under the age of 21 (counts 88, 89). Doc. 4.

                   *                                                  *                                            *

During the time of Bennett’s membership and involvement in the conspiracy, April 2004 through August 2006, the conspirators conspired to illegally distribute, and distributed, anabolic steroids and related drugs to at least 22 athletes . . .

While the names of the athletes are not provided in full (the list of the names was separately provided in unredacted form under seal) the chart below from the Sentencing Memorandum provides, inter alia, the types of steroids used and the timeframe for what appears to be the abbreviation of the athletes' names:

According to the Minute Entry entered yesterday:

J. Michael Bennett, Imprisonment 48 months as to each of Counts 1, 28, 29, 88 & 89; all terms to be served concurrently with each other. SRT 3 years on Cts 1,28 & 29, and 4 years on Cts 88 & 89; all such term to run concurrently with each other. Special condition imposed of testing and treatment for drug and/or alcohol abuse. SA $500.00.

Fight Lawyer

Rorion Gracie Trademark Litigation Over "Gracie" and "Gracie Gear" Marks

On November 12, 2009, Rorion Gracie filed a complaint against Black Silver Enterprises, Inc., Un Mi Lee, and Does 1-10 in the United States District Court for the Central District of California.

According to the complaint,

[Gracie] is a 9th degree Red Belt in Brazilian Jiu-Jitsu (superior to the black belt) and is the the patriarch of the famed Gracie family from Brazil. Plaintiff moved from Brazil to Southern California in 1978. Since that time, Plaintiff has been an owner and operator of "Gracie Jiu Jitsu" related commercial endeavors including, without limitation, Gracie Jiu Jitsu instructional courses. In 1989, Plaintiff opened the Gracie Jiu Jitsu Academy in Torrance, California.

Gracie alleges that he has sold "clothing and other merchandise bearing the GRACIE mark since the early 1980's, if not earlier."  Moreover, Gracie alleges that "[o]n or about July 8, 1997, the USPTO granted the application and entered [the] registration" for the mark Gracie Gear and that "[o]n or about September 20, 2005, the USPTO granted the application and entered [the] registration" for the mark Gracie.

As alleged in the complaint:

[o]n or about September 30, 2005, Black Silver filed an application with the USPTO for a trademark registration for the mark GRACIE in International Class 25. Pursuant to that application, Black Silver alleges that it first started using the mark GRACIE in clothing in 1991. 

In response to the application, Gracie asserts that "the USPTO issued an Office Action []  refusing to register Black Silver's proposed mark due to the likelihood of confusion to Plaintiff's trademark registrations for GRACIE GEAR (Registration No. 2,076,885) and GRACIE (Registration No. 2,997,282)."

Thereafter, Gracie alleges that "Black Silver filed a Petition to Cancel with the U.S. Trademark Trial and Appeal Board ("TTAB") in an effort to cancel Plaintiff's Registrations, claiming to have rights superior to Plaintiff's rights to the mark GRACIE in connection with clothing and related merchandise." 

Gracie also alleged that "[i]n mid-2009, Black Silver made a demand that Plaintiff pay Black Silver the sum of $250,000 as a license fee to use the mark GRACIE, notwithstanding the fact that Plaintiff, and not Black Silver, is the owner" of the marks Gracie and Gracie Gear.

Gracie asserted a number of trademark infringement causes of action, an unjust enrichment cause of action, and a cause of action for declaratory relief.

On January 7, 2010, Black Star and Un Mi Lee filed a motion to dismiss the complaint for improper venue or, in the alternative, sought transfer to a more convenient forum.

On May 11, 2010, the Court denied the motion (adopting its tentative written ruling in an earlier opinion).

On June 23, 2010, Black Star and Lee filed an answer and asserted counterclaims against Gracie for trademark infringement, cancellation of trademark, unfair competition, false description, injury to business reputation, and fraud.

According to the counterclaims:

Black Silver has used the name and mark GRACIE in association with retail clothing sales and on women's clothing items since as early as 1995.  Black Silver has also developed a nationwide clientele who recognizes and associates the GRACIE mark with Counter-Claimant's distinctive line of women's designer brands and upscale boutique sales services. Counter-Claimant Black Silver's use of its GRACIE name and mark has been widespread and continuous since at least 1991.  During these years, Black Silver has advertised its GRACIE boutiques extensively in magazines and has sold many high-quality clothing items under this mark. Consequently, Black Silver has developed tremendous goodwill in its GRACIE name and mark. In order to protect this hard-earned goodwill, Black Silver vigorously enforces its rights in this name and makes the following Counter-Claims in order to disallow Counter-Defendant as a third party to unfairly compete with Black Silver in the marketplace.

The crux of the counterclaims (as you may have guessed) is the allegation that Gracie's use of the Gracie mark infringes on Black Star's use as the senior user of the trade name.

I will continue to monitor.

Fight Lawyer

Update on Pacquiao Mayweather Litigation

First update:  On July 26, 2010, Pacquiao filed his answer to Mayweather Jr.'s counterclaim denying the allegations contained in the defamation count and asserting a number of affirmative defenses. 

For my part, given my read of the allegedly defamatory statement, I think Pacquiao had a shot at getting the counterclaim dismissed at the motion to dismiss stage. Perhaps the lawyers made a tactical decision that it would be seen as inconsistent to oppose the motions seeking to dismiss Pacquiao's defamation claim on the ground that they are premature while at the same time seeking to dismiss the counterclaim with a similar early motion.  Not really sure. 

Second update:  Turning now to Pacquiao's claims, and specifically his claim with respect to Mayweather Promotions, as you may recall from this post, "I don't Think Pacquiao and Mayweather Jr. are Close to Settling Their Litigation," I discussed Mayweather Promotions' motion to dismiss Pacquiao's Amended Complaint and Pacquiao's response to the motion. 

As you will recall, the allegedly defamatory statement allegedly made by Leonard Ellerbe (on behalf of Mayweather Promotions) was as follows:

"This is a simple question. If you have nothing to hide, then why not comply?"

With respect to the alleged Ellerbe statement, as set forth in my earlier post, I do not think this alleged statement was defamatory because Ellerbe is not asserting a fact about Pacquiao. Instead, he is speculating about potential motivations Pacquiao may have for not agreeing to random blood testing with no black-out dates leading up to a fight. Therefore, it seems to be protected opinion and nonactionable.

As set forth in my earlier post, Mayweather Promotions' motion and Pacquiao's opposition addressed whether the statement was opinion or fact and I won't repeat those arguments here.

However, in my earlier post, I also noted that in Pacquiao's opposition he argued, inter alia, that Mayweather Promotions' motion should be denied because it failed to address the other allegedly defamatory statements in the Amended Complaint, including statements allegedly made by Mayweather, Jr. as President of Mayweather Promotions and by Richard Schaefer, Oscar de la Hoya, Roger Mayweather and Mayweather, Sr. as alleged co-conspirators.

Well, Mayweather Promotions' has now filed its reply and, you guessed it, it takes up the alleged statements by Mayweather Jr., as President of Mayweather Promotions arguing that all of these statements are nonactionable opinion.

As set forth in Pacquiao's most recently filed motion to strike, the alleged statements allegedly made by Mayweather Jr. were as follows:

• "when asked on a nationally-broadcast radio interview about Pacquiao’s physical development, Mayweather, Jr. responded, 'cause we know the Philippines got the best enhancing drugs'";
• "Based on Pacquiao’s alleged use of performance-enhancing drugs, Mayweather, Jr. stated publicly he had 'great doubt as to the level of fairness [he] would be facing in the ring that night'";
• "At a press junket, Mayweather, Jr. stated, “Pacquiao’s got the power pellets, yo, and the steroid juice. Pacquiao got the power pellets you know.'"

As I have pointed out before, assuming the allegations are true, the relevant question is whether a reasonable reader would understand Mayweather to be making a factual statement that Pacquiao is using steroids?

On August 10, 2010, Pacquiao's legal team filed a motion to strike portions of Mayweather Promotions' Reply addressing the alleged Mayweather Jr. statements or, in the alternative, requested leave to file a sur-reply to address the new arguments. In this filing (the motion to strike), Pacquaio's camp does take the opportunity to address Mayweather Promotions' arguments concerning Mayweather Jr.'s alleged statements.

Specifically, Pacquiao argues as follows:

Its President’s statements are not “opinions” and, even if they were, opinions are actionable where, as here, a reasonable listener would have understood the statements to imply an assertion of fact. [].  Especially at the dismissal stage, a reasonable listener could have understood Mayweather, Jr. to imply as fact that Pacquiao has taken performance enhancing drugs when he said, 'Pacquiao got the power pellets you know'

My prediction, the Court will grant Pacquiao's motion to the extent he seeks leave to file a sur-reply, Pacquiao will file the sur-reply, and the Court will deny Mayweather Promotion's motion to dismiss. 

Fight Lawyer

Affliction Knocks Another Lawsuit Off its List-- Chrome Hearts and Affliction have Reached a Settlement in Principle

As set forth in my post, "M-1 Global and Affliction's Lawsuit with Freeplay Music Dismissed," on July 9, 2010 Freeplay Music filed a notice of voluntary dismissal of its action against M-1 Global and Affliction for the alleged "broadcast, without proper authorization, [of] Freeplay's copyrighted song 'Legion' on at least 412 different occasions in a commercial to promote the MMA Event [between Fedor and Barnett] []."

Well, it now appears that another lawsuit filed against Affliction on October 26, 2009 by Chrome Hearts, LLC will now be dismissed as the parties have reached a settlement in principle.

According to the complaint, Chrome Hearts has been "designing, manufacturing, and selling artistically styled leather goods, apparel, jewelry, and accessories since 1999."  It appears successfully too because, as set forth in the complaint, Chrome Hearts asserted that "[s]ince 1991, Chrome Hearts ' products have generated sales at retail of over Three Hundred Fifty Million Dollars ($350,000,000)." 

As set forth in the Complaint:

Chrome Hearts pioneered the idea of combining the look of rugged motorcycle looking apparel with fashion attire to make fashion apparel and accessories. All of Chrome Hearts' leather products are adorned with sterling silver hardware, including all of the buttons and ornamental pieces. Chrome Hearts further pioneered the look of suede inlay designs in connection with leather clothing. Once thought of as only a look for outlaw motorcyclists, Chrome Hearts has created a fashion niche that is now coveted in the upper most fashion circles.  Entertainers, such as Cher, Billy Idol, Aerosmith, Lenny Kravitz, Guns N' Roses, Seal, Madonna, Keith Richards, Danny Glover, Sting, Gloria Estefan, Christy Turlington, Naomi Campbell and Sharon Stone can all be seen in Chrome Hearts' fashions.

Chrome Hearts asserted that it "is the owner of the word/mark 'Chrome Hearts' and various composite trademarks comprising the Chrome Hearts mark and assorted design components."

Chrome Hearts alleged that in or around March 2009, it "discovered that Affliction had been distributing and selling headwear bearing marks confusingly similar to the [Chrome Hearts'] CH Plus Mark" and that, "[i]n or around April 2009, prior to the filing of a lawsuit, Chrome Hearts and Affliction entered into a settlement agreement in which Affliction agreed to cease and desist from use of the CH Plus Mark."

According to Chrome Hearts' allegations, despite the settlement agreement, "[i]n or around October 2009, Chrome Hearts discovered that Affliction had continued to produce, distribute, advertise, offer for sale, and/or sell merchandise bearing marks which are substantially the same and/or confusingly similar to the CH Plus Mark []."

Thus, Chrome Hearts asserted claims against Affliction for:  (1) trademark infringement under the Lanham Act; (2) "False Designations of Origin and False Descriptions - 15 U.S.C. § 1125(a)"; (3) "Trade Dress Infringement -15 U.S.C. § 1125(a)"; (4) "Trademark Dilution - IS U.S.C. § 1125(c)"; (5) "Violation of Cal. Bus & Prof. Code § 14247"; (6) "Copyright Infringement -17 U.S.C. § 501"; (7) unfair competition; and (8) breach of contract.

Chrome Hearts had filed a motion for partial summary judgment that was fully briefed and set for oral argument on August 13, 2010.  However, on August 9, 2010, Chrome Hearts filed a Notice of Settlement indicating that the parties had reached a settlement in principle, that they would finalize the settlement and file a stipulation of dismissal with prejudice within 30 days.

Thus, it looks like Affliction has now cleared two litigations from its list. 

That said, the litigation with Fedor and M-1 still appears to be going strong.

Fight Lawyer

Station Casinos Allegedly Target of "False-Shuffle" Cheating Scheme

This is a little off topic, but I thought interesting so here goes.

Station Casinos, Inc. has been in the news recently relating to its proposed bankruptcy reorganization plan and potential emergence from Chapter 11.  Under the proposed plan, the founders of Station Casinos ( Frank Fertitta III and Lorenzo Fertitta) will be positioned to retain an ownership stake in the company that emerges from bankruptcy.  As you are all aware, the Fertitta brothers are co-owners of the UFC.  According to the above article in the Las Vegas Review Journal, "the judge is expected to confirm the reorganization plan in a hearing on Aug. 27 in Reno." 

What you probably missed (or at least I did) is this press release from the United States Department of Justice outlining an alleged "'false shuffle'" cheating scheme at casinos in the United States and Canada during blackjack and mini-baccarat games," including the Palace Station.

Specifically, according to the description of the indictment contained in the release, which expressly provides that "[t]he charges contained in the indictments are merely accusations and defendants are presumed innocent until proven guilty beyond a reasonable doubt":

The indictments allege that members of the criminal organization bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating 'slugs' or groups of unshuffled cards. The indictments also allege that after tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a 'false shuffle,' and members of the group would then bet on the known order of cards when the slug appeared on the table. By doing so, members of the conspiracy allegedly repeatedly won thousands of dollars during card games, including winning several hundred thousand dollars on one occasion.

The indictments also allege that the members of the organization used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during blackjack games.

When I first came across the press release I assumed the alleged scheme would have been card counting similar to that depicted in the movie "21."  If true, this appears to go way beyond card counting.

In any event, the release notes that, to date (i.e. March 15, 2010), "37 defendants have pleaded guilty to charges relating to the casino-cheating conspiracy" and "admitted to targeting, with the aid of co-conspirators, a combined total of approximately 27 casinos in the United States and Canada during the course of the conspiracy," including the Palace Station Casino in Las Vegas.

Fight Lawyer

M-1 Global and Affliction's Lawsuit with Freeplay Music Dismissed

At the outset, nothing to get too excited about because the more interesting litigation between M-1 and Affliction appears to still be going strong.  In fact, according to the July 19, 2010 Order in that litigation, Fedor's deposition should be taking place this week.

However, there does appear to be some closure in a smaller action in which M-1 and Affliction appear on the same side of the "v" as defendants that stemmed from the promotion of the Fedor Barnett fight that never came to be.

As you may recall, on November 24, 2009, Freeplay Music, LLC filed a lawsuit against M-l Global, M-1Global.com, M-1 America, Affliction Entertainment Group, LLC, and Affliction, Inc., in the United States District Court for the Southern District of New York asserting a claim for copyright infringement.

In its complaint, Freeplay alleged that M-l Global, M-1Global.com and M-l America "organized and planned to hold a Mixed Martial Arts Event [] between Fedor Emelianenko and Josh Barnett, scheduled for August 1, 2009" and that M-1 hired Affliction to produce a television commercial promoting the event. 
The crux of the complaint is the allegation that "[f]rom at least July 20, 2009 to June 25, 2009, Defendants have caused to be broadcast, without proper authorization, Freeplay's copyrighted song 'Legion' on at least 412 different occasions in a commercial to promote the MMA Event []."

There was very little activity in this case and, on July 9, 2010, Freeplay filed a notice of dismissal of the action without prejudice.  Thus, at least for now, this matter appears concluded.

Fight Lawyer

My Analysis Re Liability for Viewing an Illegally Streamed Event

In response to the recent UFC press release concerning its subpoenas to Justin.tv and Ustream.tv and recent reports, including a post at Cagepotato.com, Ustream Hands Over PPV Broadcast Pirates' IP Addresses to UFC; Company Vows to Go After Illegal Viewers Next, I have been asked if those viewing the illegal uploads could face legal action. 

Given that UFC 117 is this weekend, I figured it was a good time to post on this topic.

At the outset, first please see my disclaimer and note that the information on this site is my opinion, it is not intended to be (and is not) legal advice or an advertisement for legal services.  Second, at 10,000 feet, everyone should know that people get sued all the time and a lawsuit, whether meritorious or not, will cause pain, i.e. expending legal fees, wasting time, and added stress. Thus, even if after reading this post you conclude that there is very little probability of success for a claim based on viewing an illegal upload, there is nothing preventing Zuffa, or any other entity broadcasting events, from filing a lawsuit (they could face sanctions if the claim was totally frivolous, but that is not the case here in my opinion).  Further, as with the music industry, there is nothing preventing Zuffa or another ppv producer from making an example of a select few -- and you don't want to be one of the few facing legal fees and exposure etc.   

As set forth below, there are widely varying views on potential ramifications of viewing an illegally uploaded stream.  For example, in an article containing an interview with the spokeswoman for the Motion Picture Association of America, not surprisingly she argues that it is illegal to simply watch an illegal stream and compares it to physical theft. 

Specifically, she states:

 'Nobody who isn’t a criminal would walk into Blockbuster or Wal-Mart or Best Buy, wherever they’re selling or renting DVDs, take it off the shelf, put it under their arm and not pay for it,” she told the Chicago Sun-Times. 'For a generation that has grown up with the Internet … there is a perception that because it is there, it’s available and it’s free, I can take it.'

In the same article, a copyright attorney claims "'[i]t is a little more complicated question whether it is illegal to watch it when someone else has put it online.'"  However, the attorney provides no guidance either way on the "complication" or how it should be resolved.  Similarly, a professor weighs in on the issue and states that there are "'some criminal penalties, but those have not been used as much.'"  The professor does not point to what those penalties might be or how the Copyright Act is implicated at all.

In this article, Legal liability for YouTube viewers, Chris Soghoian attempts to tackle the issue, diverges a little on a discussion of downloading (not streaming) something that a user did not know was an illegal upload, and ultimately doesn't really reach a conclusion. 

He does interview a lawyer and states as follows:

Sherwin Siy, an attorney with Public Knowledge, told me that my YouTube fears might be overblown. Siy points to a difference between downloading a video, and streaming it. He told me that 'arguing that a buffer copy (for a streaming view) is a duplication, that's even more of an uphill (battle), and the potential awards might not be worth the attorneys fees.' He added that 'merely watching a video on your screen, authorized or not, isn't going to be an infringement if you're not publicly performing or copying it.'

Chris disagrees with Siy and notes that users at Youtube can download a stream, which he believes would change the analysis.  I agree that downloading changes the analysis (and we already know where the courts come down on downloading music), but that is not what I am focusing on here.  Instead, the issue is whether viewing a stream is illegal.

This post by Alluc.org, "It seems to me that all you see is violence in movies and sex on TV..," addresses the legality of viewing an illegally uploaded stream and notes as follows:

First of, if an uploader does not have the copyright for the uploaded material, he is infringing the copyright law.

If a hosting site owner does not build up measures to get rid of the copyrighted videos as soon as possible, he is infringing the copyright law.

If a torrent user downloads copyrighted material or distributes it to other peers, he is infringing copyright law.

...But if a user watches copyrighted material on a streaming site (like youtube) is he infringing copyright law?

Well, no worries! As far as I know, nobody has ever been sued for watching streaming videos! For a very simple reason: When you watch something from a stream online, the video file is temporarily saved on your computer. As soon as you close the site were the video was streamed, the file gets deleted. So - unlike with torrents - there is no physical proof that you watched a copyrighted video.

Of course sites like youtube log your IP adresses and such and COULD report them to the copyright owners, who would then have to contact your ISP and ask for your personal details (this is illegal in many countries, for example Germany). THEN they could send you a demand note and charge you a fee.

The process from getting your IP til writing you a letter consumes about $3000, maybe more, and the fee you could possibly be charged wouldn't be much above a cinema-ticket. And what would the copyright owner have achieved? One person that would never watch a movie by that film-studio again, $2990 expenses and still billions of people that watch their movies for free in the internet. Do you reckon anyone would ever do that? No. Because that would be madness.

Clearly, given all of the above, this is a gray area of the law, but this is my view for what it is worth. 

With the caveat that I am not a IT guy and I don't fully understand the whole buffering and caching process over the Internet, I will assume for purposes of this discussion that buffering in the streaming context is similar to buffering in the cable DVR context, i.e. that the information is only stored for seconds during the process of streaming. 

Under this assumption, it is unlikely that buffering would give rise to a copyright claim.  In Cartoon Network, LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), the United States Court of Appeals for the Second Circuit held that buffering in the DVR context did not create "copies" under the Copyright Act because it did not satisfy the "fixed copy" requirement.  In Cartoon Network, the Court determined that the definition of "fixed" in the Copyright Act imposes both an embodiment and a durational requirement.  Although the Court determined that the data in the buffer met the embodiment requirement because “every second of an entire work is placed, one second at a time," the Court held that because the data was stored for no more than “a fleeting 1.2 seconds" it failed to satisfy the duration requirement. 

The Court of Appeals did note that the inquiry was fact specific.  Thus, buffering in the streaming context would have to go through its own independent analysis to determine if the durational requirement was met.

If, in this analysis the court were to determine that a "buffer copy" met the durational requirement, then the question becomes whether viewing streaming video constitutes a "fair use" of the copyrighted work.

In my opinion, the intentional accessing of paid video content for the purpose of circumventing pay per view fees or the intentional accessing of full-length first-run movie instead of paying a theater admission doesn't feel like fair use to me.

Here is a recent decision from the United States Court of Appeals for the Fourth Circuit discussing fair use in the context of digital archiving (as an aside, I was involved in this case for the prevailing side) discussing the four fair use factors.  As the Fourth Circuit recognized:

Section 107 provides that "the fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright."  17 U.S.C. § 107. Congress provided four nonexclusive factors for courts to consider in making a "fair use" determination:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work. 

In my opinion, the four factors likely weigh against a finding of fair use for buffering (assuming there is "copying" in the first instance):  (1) the use is not transformative, i.e. it "merely supersedes the objects of the original creation" as opposed to add[ing] something new, with a further purpose or different character;" (2) the nature of a ppv event, like the UFC, is a creative product, as opposed to a display of historic facts; and (3) the whole event is "buffered" as opposed to small segments (again, I am no tech guy).

With respect to the fourth fair use factor, as the Supreme Court has stated, it is the "single most important element of fair use," (Harper & Row v. Nation Enterprises, 471 U. S. 539 (1985)), because one primary goal of copyright protection is to ensure that "authors [have] the opportunity to realize rewards in order to encourage them to create." Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. at 1124.  However, a "use that has no demonstrable effect upon the potential market for, or the value of, the copyrighted work need not be prohibited in order to protect the author’s incentive to create." Sony Corp. v. Universal City Studios, 464 U.S. 417, 450 (1984).

With buffering, an argument could be made that I am not increasing the market for the event because I am watching an illegally uploaded copy and I am, therefore, detracting from both the sales of the event and the incentive that the author -- or in our example the UFC -- has to create because I am not buying what it produces. 

On an individual level, you might argue that my single view is not the issue, but I think a court could look beyond the individual use and focus on the net market effect of the type of use.  This has been the case in the music industry, albeit with downloading, where the United States Court of Appeals for the Seventh Circuit held that the fourth factor weighed against a finding of fair use -- the Court looked to the market effect as a whole and noted "[a]s file sharing has increased over the last four years, the sales of recorded music have dropped by approximately 30%."

Thus, depending on how the technology actually works, I think there is a plausible infringement claim that can be made.

Next, one other potential claim comes to mind under the Federal Communications Act, 47 U.S.C. § 553, although I think it is a stretch.

As you may recall from my post, Zuffa Files Lawsuit For Alleged Violations of the Federal Communications Act and Copyright Act, Zuffa has pursued defendants who allegedly intercepted the broadcast of UFC events under this statute and allegedly published it for a commercial gain in bars and other venues.

The Federal Communications Act provides, in relevant part, as follows:

§ 553. Unauthorized Reception of Cable Service

(a) Unauthorized interception or receipt or assistance in intercepting or receiving service; "assist in intercepting or receiving" defined

(1) No person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law.

(b) Penalties for willful violation

(1) Any person who willfully violates subsection (a)(1) of this section shall be fined not more than $1,000 or imprisoned for not more than 6 months, or both.

(2) Any person who violates subsection (a)(1) of this section willfully and for purposes of commercial advantage or private financial gain shall be fined not more than $50,000 or imprisoned for not more than 2 years, or both, for the first such offense and shall be fined not more than $100,000 or imprisoned for not more than 5 years, or both, for any subsequent offense.

(c) Civil action in district court; injunctions; damages; attorney's fees and costs; regulation by States or franchising authorities

(1) Any person aggrieved by any violation of subsection (a)(1) of this section may bring a civil action in a United States district court or in any other court of competent jurisdiction.

(2) The court may--

(A) grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain violations of subsection (a)(1) of this section;

(B) award damages as described in paragraph (3); and

(C) direct the recovery of full costs, including awarding reasonable attorneys' fees to an aggrieved party who prevails.

(3)
(A) Damages awarded by any court under this section shall be computed in accordance with either of the following clauses:

(i) the party aggrieved may recover the actual damages suffered by him as a result of the violation and any profits of the violator that are attributable to the violation which are not taken into account in computing the actual damages; in determining the violator's profits, the party aggrieved shall be required to prove only the violator's gross revenue, and the violator shall be required to prove his deductible expenses and the elements of profit attributable to factors other than the violation; or

(ii) the party aggrieved may recover an award of statutory damages for all violations involved in the action, in a sum of not less than $250 or more than $10,000 as the court considers just.

(B) In any case in which the court finds that the violation was committed willfully and for purposes of commercial advantage or private financial gain, the court in its discretion may increase the award of damages, whether actual or statutory under subparagraph (A), by an amount of not more than $50,000.

(C) In any case where the court finds that the violator was not aware and had no reason to believe that his acts constituted a violation of this section, the court in its discretion may reduce the award of damages to a sum of not less than $100.

While the statute certainly seems geared towards those intercepting or receiving cable in the traditional sense, i.e. in the way Zuffa has been pursuing claims under the statute, depending on how the uploaders of the streams access the feed for upload, they could potentially face exposure. 

Further because the statute speaks to those who "receive" a transmission offered "over a cable system," there could be an argument here that those viewing the stream of a ppv event are in violation of the statute.  That said, there is probably a good argument that people at home are not viewing the ppv "over a cable system" when they watch it on a computer via stream as intended by the statute. 

Bottom line, I think there is at least a plausible copyright claim that can be made against an individual who views an illegally streamed ppv and nothing prevents Zuffa -- or another ppv provider -- from going after and attempting to make an example of these individuals.

Fight Lawyer