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By Zach Arnold | October 30, 2016
The cliff notes:
- Mark Hunt has hired San Diego attorney Christina Denning to either negotiate UFC contractual changes regarding doping or file a lawsuit
- Denning is talking a big game publicly about suing UFC using RICO (racketeering)
- Both state and federal RICO statutes require certain related causes of action in a demonstrated pattern under the guise of an illegal scheme
- Nevada’s racketeering statute requires two acts in the course of five years, while federal RICO allows a 10 year window
- RICO has been watered down over the years in terms of its flexibility as a cause of action but still requires a significant bar to climb in civil pleadings
- Denning is threatening to file suit against UFC and Brock Lesnar for causes of action which appear to involve concealment, misrepresentation, unjust enrichment and/or obtaining money by false pretenses (fraud).
Most big game attorneys don’t tell the press what they’re about to do against a major corporation. They do it first and then talk behind the scenes.
Mark Hunt hired an California attorney who specializes in construction & business litigation. But California law is very different than Nevada law and Nevada law is different than Federal law. Especially when it comes to racketeering.
Read the Federal statute on RICO for yourself. In order to file a lawsuit invoking RICO, you have to file at least two causes of action that are on the specified list of COAs available.
Different states have their own version of a racketeering statute. California’s law is called the Control of Profits from Organized Crime Act. Criminal application of that statute allows for confiscation of any ill-gotten gains. It’s list of COAs largely mirrors the federal RICO statute. Nevada is a different story. That state’s racketeering statute includes a larger list of available causes of action to invoke RICO.
Fraudulent Concealment: Mark Hunt’s attorney is investigating and alleging that UFC had intentionally let Brock Lesnar fight Mark Hunt at UFC 200 while using steroids in order to make money while Lorenzo Fertitta was selling UFC to Ari Emanuel/WME. Hunt’s attorney alludes to UFC giving Lesnar a pass on a four-month USADA testing window before signing to fight at UFC 200. This is viewed as a hook to demonstrate intent as to why UFC may have not expedited pre-fight USADA drug testing results that revealed a positive test result for Lesnar and that this concealment (omission) of fact from Hunt was used to obtain his services to make millions of dollars.
To prove concealment in Nevada, you have to demonstrate the following:
1) the defendant (UFC) concealed a material fact, 2) the defendant had a duty to disclose this fact, 3) the defendant intentionally concealed the fact to defraud the plaintiff, 4) the plaintiff didn’t know about the fact and would have acted differently given knowledge of the fact, and 5) plaintiff sustained damages as a result of hiding the fact in question.
In order for Hunt to prove fraudulent concealment, he would have to prove that UFC intentionally knew that Lesnar was using steroids and that they were hiding this from Hunt so he couldn’t back out of the UFC 200 fight. It’s one thing to try to demonstrate UFC’s consciousness of guilt regarding the four-month waiver but it’s entirely a different ballgame to prove that UFC intentionally delayed USADA test results showing Lesnar failed a steroid test before the fight.
Negligent or intentional misrepresentation: If you’re going to argue concealment, then you’re arguing intent. Which means intentional misrepresentation is the more likely cause of action. The problem is that the bar is much higher to meet the standard of proving intentional misrepresentation than it is to prove negligent misrepresentation.
In Nevada, the elements for a claim of negligent misrepresentation are: 1) a business or employer 2) supplied false information to the plaintiff in a business transaction 3) which the plaintiff detrimentally relied upon 4) creating liability for the defendant for damages suffered by plaintiff 5) due to a breach of duty to exercise reasonable care or judgment.
(California’s statute is clearer: defendant represented a fact to plaintiff as true but wasn’t and may have honestly believed it was true at the time but had no reasonable grounds to believe in the claim made while intending for the plaintiff to detrimentally rely upon the assertion which caused damages.)
In order for Hunt to prove negligent misrepresentation, he would have to demonstrate that UFC (or USADA by proxy) gave false information regarding Brock Lesnar’s doping before the UFC 200 fight took place and that he was damaged as a result of the false information. He would have to prove that UFC reasonably should have known that Lesnar had failed a drug test or was going to fail a drug test — and this is where the four-month USADA waiver could come into play.
Fraud (obtaining money under false pretenses) and unjust enrichment: Hunt’s attorney is alleging that UFC and drug-using fighters are obtaining money under false pretenses when those fighters in question are receiving ill-gotten gains as a result of their drug usage while the fighters who are clean but lose suffer economic damages because their contracts slash pay for future bouts after losses.
NRS 205.380 defines obtaining money under false pretenses as a person knowingly and designedly by any false pretense obtaining from any other person money with the intent to cheat or defraud the other person.
This cause of action not only sounds like potentially fertile legal ground against UFC but against Brock Lesnar. Hunt’s attorney claims that they are looking into pursuing a lawsuit against Lesnar as well as UFC.
Hold the horses on racketeering
The impact of a racketeering cause of action is simple — treble (triple) damages plus attorney fees. The problem for Mark Hunt is that the alleged causes of actions up above don’t amount to two of the specified causes of actions listed in either the Nevada statute or the Federal RICO statute.
Proving racketeering is extraordinarily difficult in a civil setting. A prominent attorney we talked with on background explained the situation this way:
“Federal courts have extensive pleading standards to even allege [RICO]. If this was added to the anti-trust [case], I could see that. But to take them on in a civil RICO, it’s only good for purposes of PR. State courts hate civil RICO. The predicate acts and racketeering activity generally require criminal behavior. You can mix civil RICO with common law causes of action. However, it can be terribly complex.”
When I asked the attorney if Mark Hunt’s attorney Christina Denning could try to use the Federal racketeering statute to try to get pendent jurisdiction in a Nevada Federal court instead of state court, the attorney confirmed that Nevada’s state racketeering law would apply and there is not exclusive federal subject matter jurisdiction for racketeering claims. Which means a lawsuit against UFC would have to take place in a state court in Las Vegas. Good luck.
The best attorneys don’t go for volume on causes of actions. They go for the path of least resistance to get the desired result. Concealment and unjust enrichment are scary enough.