Le v. Zuffa, LLC ( 2024 )

1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE DISTRICT NEVADA 3 CUNG LE, NATHAN QUARRY, JON FITCH, 4 BRANDON VERA, LUIS JAVIER Case No. 2:15-cv-01045-RFB-BNW VAZQUEZ, and KYLE KINGSBURY, On 5 Behalf of Themselves and All Others Similarly Situated, 6 Plaintiffs, 7 8 v. 9 ZUFFA, LLC, D/B/A ULTIMATE FIGHTING CHAMPIONSHIP and UFC, 10 Defendant. 11 12 13 ORDER PRELIMINARILY APPROVING SETTLEMENT, PRELIMINARILY 14 APPROVING THE PLAN OF ALLOCATION, APPROVING THE NOTICE PLAN, AND APPROVING 15 THE PROPOSED SCHEDULE FOR COMPLETING THE SETTLEMENT PROCESS 16 17 18 19 20 21 22 23 24 25 26 27 28 1 WHEREAS, Plaintiffs have moved for preliminary approval under Fed. R. Civ. P. 23(c)(2) and 2 23(e) of the settlement (“Settlement”) between the parties in the action Le, et al. v. Zuffa, LLC d/b/a 3 Ultimate Fighting Championship and UFC, Case No. 2:15-cv-01045 (D. Nev.) (the “Action”);1 4 WHEREAS, on September 26, 2024, Class Representatives, both individually and on behalf of 5 the Class (defined below), and Defendant Zuffa, LLC (“Defendant” or “Zuffa”) entered into a 6 settlement agreement that sets forth the terms and conditions of the parties’ proposed Settlement and 7 the release and dismissal with prejudice of the Plaintiffs’ claims against Defendant (the “Settlement 8 Agreement”); 9 WHEREAS, on October 7, 2024, Plaintiffs filed a Motion for Preliminary Approval of the 10 Settlement, Preliminary Approval of the Plan of Allocation, Approval of the Notice Plan, and Approval 11 of the Proposed Schedule for Completing the Settlement Process, requesting the entry of an Order: (i) 12 granting preliminary approval of the Settlement Agreement; (ii) reaffirming the Court’s finding that the 13 requirements of Fed. R. Civ. P. 23(a) and 23(b)(3) are satisfied for the Class; (iii) reaffirming the 14 appointment of Berger Montague PC, Cohen Milstein Sellers & Toll PLLC, and Joseph Saveri Law 15 Firm, LLP as Co-Lead Class Counsel2 for the Class under Fed. R. Civ. P. 23(g); (iv) authorizing 16 dissemination of notice of the Settlement to the Class; (v) preliminarily approving the proposed Plan of 17 Allocation; (vi) appointing Angeion Group LLC (“Angeion”) as Settlement Claims Administrator; (vii) 18 appointing The Huntington National Bank (“Huntington”) as Escrow Agent and approving the 19 Custodian/Escrow Agreement attached as Exhibit A to the Settlement Agreement; and (viii) approving 20 the proposed Settlement schedule, including setting a date for a final Fairness Hearing; 21 22 23 1 Plaintiffs Cung Le, Nathan Quarry, Jon Fitch, Brandon Vera, Luis Javier Vazquez, and Kyle Kingsbury brought the Action against one defendant, Zuffa, LLC. On August 9, 2023, the Court 24 certified the Class (see below) and appointed all the plaintiffs in the Action, other than Nathan Quarry, as the class representatives for the Class (the “Class Representatives”). See ECF No. 839, at 78-79 25 (certifying the bout class). Plaintiff Nathan Quarry was proffered as a class representative for the “Identity Rights Class,” which the Court did not certify. See generally ECF No. 839 at 75-78. The 26 Class Representatives together with Mr. Quarry are collectively referred to as “Plaintiffs.” 27 2 Co-Lead Class Counsel together with Kemp Jones , LLP, Clark Hill PLC, and other firms that worked 28 un der the direction of Co-Lead Class Counsel on beh alf of the Class in the Action are collectively 1 WHEREAS, on August 9, 2023, the Court certified the Bout Class (defined below) in the 2 Action (ECF No. 839, at 79); 3 WHEREAS, on July 30, 2024, the Court denied preliminary approval of a prior proposed 4 settlement (dated April 24, 2024) that sought to resolve this Action together with Johnson, et al. v. 5 Zuffa, LLC, et al., No. 2:21-cv-1189 (D. Nev.) (the “Johnson Action”), for $335 million plus certain 6 prospective relief (the “Denial”) (ECF No. 1038); 7 WHEREAS, the Settlement does not resolve any claims being prosecuted in the Johnson 8 Action; 9 WHEREAS, Defendant supports Plaintiffs’ Motion; and 10 WHEREAS, the Court is familiar with the record in this case, and having reviewed the 11 Settlement and supporting documents, has found good cause for entering the following Order. 12 NOW, THEREFORE, IT IS HEREBY ORDERED THAT: 13 Jurisdiction 14 1. This Court has jurisdiction to enter this Order as it has jurisdiction over the subject 15 matter of the above-captioned action and over Defendant and Plaintiffs, including all members of the 16 Class. 17 The Class 18 2. The Court reaffirms its finding that the requirements of Fed. R. Civ. P. 23(a) and 19 23(b)(3) are satisfied for the Class, including for settlement and judgment purposes. See ECF No. 839, 20 at 79 (defining the Bout Class). 21 3. The Class includes: 22 All persons who competed in one or more live professional UFC-promoted mixed-martial arts (“MMA”) bouts taking place or broadcast in the United States from December 16, 23 2010 to June 30, 2017 (the “Class Period”). 24 Excluded from the Class are all persons who are not residents or citizens of the United States unless the UFC paid such persons for competing in a bout fought in the United 25 States. 26 ECF No. 839, at 79. 27 4. The Court previously appointed Plaintiffs Cung Le, Jon Fitch, Brandon Vera, Luis 28 1 Javier Vazquez, and Kyle Kingsbury as the class representatives for the Class. See ECF No. 839, at 79; 2 see also n.1 supra. 3 5. The Court reaffirms the appointment of Berger Montague PC, Cohen Milstein Sellers & 4 Toll PLLC, and Joseph Saveri Law Firm, LLP as Co-Lead Class Counsel for the Class having 5 determined that the requirements of Rule 23(g) of the Federal Rules of Civil Procedure are fully 6 satisfied by this appointment. 7 Preliminary Approval of the Settlement 8 6. Pursuant to Fed. R. Civ. P. 23(e)(1)(B), based on “the parties’ showing that the Court 9 will likely (i) approve the proposal[s] under Rule 23(e)(2); and (ii) certify the class for purposes of 10 judgment on the proposal[s],” the Court hereby preliminarily approves the Settlement, as embodied in 11 the Settlement Agreement. 12 7. Being familiar with the record, and having reviewed the settlement papers, the Court 13 finds the Settlement was entered into after nearly ten years of hard-fought litigation in the Action, 14 including, inter alia, completion of fact discovery, the exchange of expert reports and the depositions 15 of each expert, an evidentiary hearing relating to class certification and Daubert featuring seven 16 witnesses, class certification and Daubert briefing (and decisions on class certification and Daubert), 17 three sets of summary judgment briefing (and a decision on summary judgment), briefing on motions in 18 limine, submission of trial briefs, and trial preparation. The Court finds further that, both before and 19 after the Denial, the Settlement process involved multiple mediation sessions before an experienced 20 mediator. The parties reached the Settlement only after extensive arm’s length negotiations, including 21 negotiations that occurred after the Denial. The parties took into account the Court’s stated reasons for 22 the Denial, including by resolving this Action without also resolving the Johnson Action. Accordingly, 23 the Court preliminarily finds that the Settlement meets all factors under Rule 23(e)(2) and will likely be 24 granted final approval by the Court, subject to further consideration at the Court’s final Fairness 25 Hearing. The Court finds that the Settlement encompassed by the Settlement Agreement is 26 preliminarily determined to be fair, reasonable, and adequate, and in the best interests of the Class, 27 raises no obvious reasons to doubt its fairness and raises a reasonable basis for presuming that the 28 Settlement and its terms satisfy the requirements of Federal Rule of Civil Procedure 23(c)(2) and 23(e) 1 and due process so that notice of the Settlement should be given. 2 8. The Court has reviewed the Plan of Allocation and hereby preliminarily approves it. 3 9. Angeion Group LLC is hereby appointed as Settlement Claims Administrator for the 4 Class. 5 10. The Huntington National Bank is hereby appointed as Escrow Agent pursuant to the 6 Settlement. 7 11. The Court approves the establishment of the Le v. Zuffa Settlement Fund under the 8 Settlement Agreement as a qualified settlement fund (“QSF”) pursuant to Internal Revenue Code 9 Section 468B and the Treasury Regulations promulgated thereunder and retains continuing jurisdiction 10 as to any issue that may arise in connection with the formation and/or administration of the QSF. In 11 accordance with the Settlement Agreement, Co-Lead Class Counsel are authorized to withdraw funds 12 from the QSF for the payment of reasonable costs of notice, payment of taxes, and settlement 13 administration costs. 14 12. Pending further Order of the Court, all litigation activity against Defendant on behalf of 15 the Class is hereby stayed, and all hearings, deadlines, and other proceedings related to the Plaintiffs’ 16 claims against Defendant, other than those incident to the settlement process, are hereby taken off the 17 Court’s calendar. The stay shall remain in effect until such time that: (i) Defendant or Plaintiffs 18 exercise their right to terminate the Settlement pursuant to its terms; (ii) the Settlement is terminated 19 pursuant to its terms; or (iii) the Court renders a final decision regarding approval of the Settlement, 20 and if it approves the Settlement, enters final judgment and dismisses Plaintiffs’ claims against 21 Defendant with prejudice. 22 13. In the event that the Settlement fails to become effective in accordance with its terms, or 23 if an Order granting final approval to the Settlement and dismissing Plaintiffs’ claims against 24 Defendant with prejudice is not entered or is reversed, vacated, or materially modified on appeal, this 25 Order shall be null and void. 26 14. In the event the Settlement is terminated, not approved by the Court, or the Settlement 27 does not become final pursuant to the terms of the Settlement, litigation against Defendant shall resume 28 in a reasonable manner as approved by the Court upon an application of Plaintiffs or Defendant. 1 Approval of the Notice Plan 2 15. The Court approves in form and substance the Plaintiffs’ proposed notice plan, including 3 the long-form notice, the short-form notice, the poster notice, and the updated Settlement website as 4 described herein. The proposed notice plan specified by Plaintiffs and as supported by the Declaration 5 of Steven Weisbrot, Esq. of Angeion Group LLC re the Settlement Notice Plan, dated October 7, 2024 6 (“Weisbrot Settlement Decl.”) (hereinafter, the “Notice Plan”): (i) is the best notice practicable; (ii) is 7 reasonably calculated, under the circumstances, to apprise members of the Class of the settlement of the 8 Action (defined in the Settlement Agreement, ¶1(a)) and of their right to participate in or object to the 9 proposed Settlement; (iii) is reasonable and constitutes due, adequate, and sufficient notice to all 10 persons entitled to receive notice of the Fairness Hearing; and (iv) fully satisfies the requirements of 11 Fed. R. Civ. P. 23(e)(1) and due process and is a reasonable manner of distributing notice to Class 12 Members who would be bound by the Settlement. 13 16. Angeion may modify the form and/or content of the targeted advertisements and banner 14 notices as it deems necessary and appropriate to maximize their impact and reach, as long as those 15 modifications substantially comport with the notices attached to the Weisbrot Settlement Decl. as 16 Exhibits A, B, and C. 17 17. Defendant shall provide notice of the Settlement as required by 28 U.S.C. § 1715. 18 18. The Court observes that, on November 17, 2023, it authorized notice to the Class 19 relating to its certification of the Bout Class in the Action. ECF No. 921. Notice to the Class utilized 20 four forms of notice: (i) a long-form notice that provided detailed information about the Action, the 21 Class, and the Class Members’ rights, including their right to opt-out; (ii) a short-form notice that 22 provided critical information to Class Members in a summary form and directed them on how to obtain 23 additional information; (iii) a press release notice to alert UFC fighters about the Class and draw media 24 attention to the certification of the Class; and (iv) a poster notice displayed at MMA gyms. The manner 25 of notice employed a multiplicity of methods designed to ensure notice to the largest possible number 26 of Class Members, which included: (1) direct notice to all reasonably identifiable Class Members via 27 email and U.S. mail; (2) a targeted first-party social media campaign; (3) the issuance of a press 28 release; (4) posted notice in notable MMA gyms; and (5) the implementation of a dedicated website 1 and tollfree hotline where Class Members could learn more about their rights and options in the Action. 2 19. The Court further observes that, on February 5, 2024, Plaintiffs filed with the Court a 3 notice concerning the implementation of the Class notice program. See Plaintiffs’ Notice of: (1) 4 Effectuation of Class Notice Plan, and (2) Exclusions from Bout Class, ECF No. 966, at 1 (Feb. 5, 5 2024). This submission, and the accompanying declaration of the Court-appointed Notice 6 Administrator (Angeion), described in detail the process and results of effectuating notice to the Class, 7 including that no requests for exclusion were submitted by Class Members. See id. at 3-4. 8 20. The Court finds that notice to the Class was effectuated according to the Court approved 9 notice plan to the Class, as described above. The Court further finds that notice to the Class was 10 sufficient and reasonably informed Class Members of their rights to participate in or opt-out from the 11 Class and, accordingly, no second opportunity to request exclusion from the Class is warranted in 12 connection with notice of the Settlement. See Low v. Trump Univ., LLC, 881 F.3d 1111, 1121-22 (9th 13 Cir. 2018) (holding no second opportunity to opt-out at settlement stage and that Ninth Circuit law 14 provides no due process right for such a second opt-out choice); Musgrove v. Jackson Nurse Pros., 15 LLC, No. CV 17-6565 FMO (SSX), 2022 WL 2092656, at *7 (C.D. Cal. Jan. 11, 2022) (approving 16 preliminary approval of settlement and holding a settlement does not afford a second opportunity to 17 opt-out when class members had earlier opportunity and did not do so); In re Zillow Grp., Inc. Sec. 18 Litig., No. 2:17-CV-1387-JCC, 2023 WL 2766264, at *4 (W.D. Wash. Apr. 3, 2023) (same); 2 19 MCLAUGHLIN ON CLASS ACTIONS § 6:21 (20th ed. 2023) (collecting cases that “reject[ ] the suggestion 20 that a second opt-out should be granted as a matter of course, even if the terms of the settlement change 21 after the expiration of the initial opt-out period”). 22 Approval of the Schedule 23 21. Angeion and the parties shall adhere to the following schedule: 24 a. No later than 30 days of the date of this Order, Angeion shall begin the process 25 of providing notice to the Class in accordance with the Notice Plan. 26 b. No later than 60 days of the date of this Order, Co-Lead Class Counsel shall file 27 a motion for attorneys’ fees, unreimbursed litigation costs and expenses, and service awards for the 28 Class Representatives, pursuant to the terms of the Settlement Agreement. 1 c. No later than 90 days of the date of this Order, members of the Class may □□□□□ 2 any objection to the proposed Settlement or to the proposed Plan of Allocation, or to the request for 3 attorneys’ fees, unreimbursed litigation costs and expenses, service awards to the Class 4 Representatives, and/or any other aspect of the Settlement. 5 d. All objections must be in writing and filed with the Court, with copies sent to the 6 Claims Administrator, and include the following information: (1) the name of the case (Le, et al. v. 7 Zuffa, LLC, Case No. 2:15-cv-01045 (D. Nev.)); (2) the individual’s name and address and if 8 represented by counsel, the name, address, and telephone number of counsel; (3) proof of membership 9 (such as, for instance, evidence of participation in a UFC bout during the Class Period) indicating that 10 the individual is a member of the Class; (4) a statement detailing all objections to the Settlement; and 11 (5) a statement of whether the individual will appear at the Fairness Hearing, either with or without 12 counsel. Furthermore, all objections must be signed by the objecting member of the Class. 13 e. No later than 21 days after the expiration of the deadline for members of the 14 Class to object to the proposed Settlement and/or attorneys’ fees, expenses and service awards, or the 15 Plan of Allocation, Co-Lead Class Counsel shall file all briefs and materials in support of final approva 16 of the Settlement. 17 f. A hearing on final approval of the Settlement shall be held before this Court on 18 Thursday, February 6, 2025, at 9:15 a.m. PST in Las Vegas Courtroom 7C. 19 “0 DATED: October 23, 2024 SO ORDERED 21 22 ¢ S 23 RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE 24 25 26 27 28 TF aa eee ee eee ee ee APDROVING THE PLAN