Tuesday, January 25, 2011

Another (much bigger) Victory For Zuffa -- Bellator's Motion to Dismiss Denied

I have previously posted on Zuffa's lawsuit against Bellator and Pavia -- a post with earlier links is here, and, most recently posted on the Court's denial of Bellator's motion to stay discovery pending resolution of  Bellator's motion to dismiss for lack of personal jurisdiction.

As I noted in my most recent post:
I will keep monitoring to see how the Court resolves Bellator's motion to dismiss, but my prediction based on this ruling (specifically, the "viable argument" language above) is that the Court is going to deny Bellator's motion.
My prediction (unlike my Tapology predictions recently) was correct.  Specifically, on January 24, 2011 the Court entered an Order denying Bellator's motion to dismiss for lack of personal jurisdiction.

The Court first analyzed the general jurisdiction issue (my earlier post describing this argument can be found here) and found that "Zuffa has failed to meet its burden of showing that these [Bellator's] contacts are sufficiently substantial or continuous and systematic that it would be reasonable for Bellator to anticipate being sued in Nevada." 

Specifically, the Court (1) found "that Bellator’s website alone is insufficient to establish general jurisdiction;" (2) was also "not persuaded that the exercise of jurisdiction was proper based on the fact that "Bellator has entered into contracts with fighters who reside in Nevada;" and (3) found that "the fact that Bjorn Rebney, Bellator’s founder and Chief Executive Officer, once attended an MMA awards show held in Las Vegas, Nevada . . . and that one of the recently-crowned “Bellator Girls,” winners of a contest put on by Bellator, is a resident of Nevada" were insufficient contacts to establish general jurisdiction.

Next, the Court turned to specific jurisdiction question and determined that Zuffa had carried its burden. 

The Court found, inter alia, that:
Bellator committed an intentional act because Mr. Rebney, Bellator’s CEO, allegedly sent an e-mail to Ken Pavia, a sports agent that heads MMA Agents, wherein he requests Pavia to re-send all the 'seminal' documents from UFC so that Bellator could alter them enough to use them in its business. This alleged email is sufficient to establish an intentional act, and weighs toward purposeful direction under the Calder test.
In this case, Bellator knew that its conduct was targeting Zuffa because the e-mail giving rise to Zuffa’s alleged injuries shows that Bellator was trying to appropriate all of the seminal documents used by UFC in conducting its business in Nevada. Therefore, because Bellator knew that Zuffa is based in Nevada, the Court finds that Zuffa has met its burden in establishing the express aiming requirement.
Thus, the alleged misappropriation and use of Zuffa’s confidential documents would certainly cause Zuffa harm in Nevada. Whether or not Zuffa suffers more harm in other states is irrelevant. Therefore, the Court finds that Zuffa has suffered harm in Nevada.
In this case, Zuffa’s alleged injuries resulted from Bellator’s purported misappropriation of Zuffa’s confidential and proprietary information. Thus, the Court can easily conclude that but for Bellator’s conduct, Zuffa would not have suffered its alleged injuries. As such, the Court finds that Zuffa’s claims arise out of Bellator’s alleged forum-related activities.

The Court next analyzed the reasonableness prong, i.e. "the defendant must ‘[present a compelling case that the presence of some other considerations would render jurisdiction unreasonable]’ in order to defeat personal jurisdiction,” and determined that Bellator had not met its burden in proving unreasonableness.

Finally, the Court addressed "fairness" and found "that both the 'minimum contacts' and 'fairness'requirements of International Shoe are satisfied, and denie[d] Bellator’s motion to dismiss for lack of personal jurisdiction.


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