Affliction's Motion to Dismiss Denied in Fedor Lawsuit

Fedor Emelianenko and his promotional team survived a first-round attack Monday in a legal battle that pits them against their former business partner, Affliction Entertainment.

Affliction’s attorney, Michael Bassiri, confirmed to Sherdog.com that a Los Angeles federal judge had denied Affliction’s motion to dismiss several claims made in a breach of contract lawsuit filed Oct. 28 by Emelianenko and M-1 Global.

The case is set to go to trial on Nov. 16.

Emelianenko and M-1 Global, a promotional/management group with which the fighter is closely aligned, have sued Affliction for damages following Affliction Entertainment’s decision to cancel its co-promoted “Trilogy” event, which was scheduled to take place Aug. 1 in Anaheim, Calif.

In the suit, the world’s No. 1-ranked heavyweight and M-1 claim that Affliction breached the “Fight Agreement” requirement to stage and promote a third bout for the fighter after advertised opponent Josh Barnett was refused a license in California for an alleged positive steroids test two weeks before the event. They claim that Affliction did not undertake “all reasonable efforts” to find a fighter to replace Barnett, and even go so far as to argue that Affliction lost interest in promoting the third bout partly because it was apparently pursuing a competing objective at the same time -- repairing its soured relationship with competing promoter, Zuffa LLC, parent company to the UFC. Shortly after Affliction’s decision to cancel the event, the UFC announced that it had reached a sponsorship agreement to allow the previously banned clothing brand back into its shows.

Emelianenko and M-1 also claim Affliction breached the “Consulting Agreement” by failing to pay the third consulting fee installment, reimburse certain expenses and also breached the “Letter Agreement” by failing to hand over M-1’s final payment. Emelianenko and M-1 are demanding “no less than $10 million in damages for breach of the Fight Agreement, $2 million in damages for breach of the Consulting Agreement and $500,000 in damages for breach of the Letter Agreement.”

On Monday, Affliction’s legal team urged the judge to dismiss a number of Emelianenko and M-1’s breach of contract claims, arguing that two of the three agreements at issue in the suit had expired well in advance of the “Trilogy” show. Emelianenko and M-1 Global’s legal team countered that the contracts had not expired, pointing to evidence that Affliction actively co-promoted the event with M-1, which in their view suggests that Affliction was acting as if the contracts remained in effect.

Bassiri, Affliction’s counsel, said that the judge denied the motion because at this early stage of litigation, she was legally required to accept Emelianenko’s allegations as true. The judge did not, however, make any binding decisions regarding whether or not Emelianenko’s claims were factually accurate.

Attorney Marc Hines, who represents Emelianenko and M-1 Global, was not initially available for comment.

Although Affliction, M-1 and Emelianenko disagree on a number of facts in the lawsuit, including the specific terms of the contracts, they agree that their relationship was, for a time, governed by at least two contracts entered into during 2008. The first contract is a “Fight Agreement” between Emelianenko and Affliction Entertainment, the arm of the Affliction family of companies that promoted mixed martial arts events. The Fight Agreement guaranteed Emelianenko at least $300,000 per bout (in addition to “substantial payments” that were to be paid by M-1) for up to three fights, and granted him various international distribution and promotional rights, particularly in Russia and other parts of Asia.

The second contract is a “Consulting Agreement” between M-1 and Affliction Entertainment. M-1 also claims the existence of a third contract, referred to as a “Letter Agreement,” between itself and Affliction Clothing, a separate legal entity from Affliction Entertainment. M-1 claims the “Letter Agreement” required Affliction Clothing to sponsor several M-1 Challenge events.

Affliction argued that the “Fight” and “Consulting” agreements expired March 31, 2009 -- a date well before the “Trilogy” cancellation -- and that Affliction therefore could not possibly have breached contracts that no longer existed in mid 2009. Affliction has not yet taken a formal position on its alleged breach of the “Letter Agreement.”

Affliction’s attorney, Bassiri, declined to comment when asked whether there was any contract in effect while the parties were actively pursuing and promoting “Trilogy.” He did, however, confirm that there were talks between Affliction Holdings, LLC and Zuffa, LLC, but said that the complaint inaccurately describes those discussions and that the discussions were not what triggered the cancellation.

According to Bassiri, Affliction’s side of the story “will all come out in discovery,” when the parties have a chance to sift through evidence from both sides and take depositions over the next few months.

The discovery period will undoubtedly involve the depositions of key players on all sides and could also require depositions of peripheral parties, such as top representatives from Zuffa LLC. Once the parties have engaged in discovery, and before putting the case before a jury, the parties will have the opportunity to return to the judge and ask her to rule on their legal arguments regarding expiration of the contracts.

J.R. Riddell is an attorney and practicing member of the California State Bar. This article does not provide legal advice, and any opinions expressed in this article are solely those of the author and do not reflect the views of J.R.'s law firm, Orrick, Herrington & Sutcliffe LLP. Riddell can be reached at [email protected].