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BANE'S LEGAL TAKE: An attorney's review of the injunction granted for Bellator MMA against Quinton "Rampage" Jackson
Apr 8, 2015 - 7:05:31 PM BANE'S LEGAL TAKE: An attorney's review of the injunction granted for Bellator MMA against Quinton "Rampage" Jackson

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By: Michael Bane, MMATorch Contributor

Those who were hoping for a successful return of Quinton "Rampage" Jackson to the Octagon at UFC 186 have one less reason to watch the card now that a New Jersey judge has enjoined (legally prohibited by way of injunction) Jackson from competing at the event. Many previously unknown details of Jackson's complaints with and subsequent attempted termination of his contract with Bellator are revealed in a review of the judge's order (read it for yourself here).

Civil law and litigation are interesting for reasons beyond procedural application of legal standards. The heart of most civil litigation is centered on money. Be it to retain what one has, recover what they've lost, or prevent future losses, these types of cases are merely an extension of business practices designed to do the same thing.

The injunction Bellator successfully petitioned the Superior Court of New Jersey for is interesting for those very reasons. Documents and information that the public would normally have no access to now become part of the public's collective knowledge. This is a boon for those curious to learn the inner workings of fighters and their agreements, as well as the overall business models and strategies of promotions such as Bellator or the UFC.

Irreparable Harm

The case law that Judge Karen L. Suter cited in issuing the injunction gave factors that must be weighed when determining whether or not to give such an order. One of these factors, and the one that looks to have played most heavily in the judge's decision, was that of irreparable harm. If the injunction was not issued, would the movant (Bellator in this situation) be harmed in such a way that could not be undone?

Suter points out that Jackson's contract is an exclusive deal with Bellator, in that he could only compete in the world of MMA under their banner. And as Jackson is a unique commodity within the MMA world in his name recognition and popularity, his loss from Bellator's stable of fighters, particularly to their biggest competitor, is a significant blow to Bellator. The irreparable harm in this scenario comes from the belief that the loss of Jackson to the UFC and his competition on the 186 card would damage Bellator in a way that could not be fixed by just cutting Bellator a check.

For example, let's say the judge denied the injunction and Jackson fought at UFC 186. In the event he would go on to lose the lawsuit, how much money should Bellator be entitled to be made whole? Their investment in continuing to build Jackson's brand is not only lost to an extent, their biggest competitor (the UFC) arguably profited from it. How do you quantify what Bellator lost in recognition, reputation, fan base, and other intangibles? While Jackson argued that no irreparable harm was imminent, Suter agreed with Bellator. She cited Jackson's unique standing in a limited pool of eligible individuals (professional fighters) and the benefits lost and gained by Bellator and the UFC respectively in her finding that irreparable harm would occur if no injunction was issued.

What is fascinating to see in this particular analysis by Suter is how the court absolutely values the capitalistic aspects of Bellator's arguments. Bellator is a business that has invested in its growth profitability. The court recognizes the importance of these things in the United States, and finds protecting them to be a valid influence on, or reason to make, legal rulings.

Probability of Success on the Merits

Weighing this factor can often give us some insight into how a trial may ultimately play out. As much as Jackson says he #aintworriedboutnothing, he can't be encouraged about his prospects in this suit given this ruling.

One of the issues that the media previously reported was a pay-per-view numbers report not provided to Jackson's team by Bellator. Jackson has argued that this is a material breach to the contract, allowing him an ultimate right to terminate. In addition to being tied to possible bonus compensation, Jackson alleges that additional information that would be included in these reports would also tell him about how Bellator had marketed the events.

In addition to pay-per-view buy bonuses, Jackson also had bonuses tied to live attendance. He alleges additional material breaches and accuses Bellator of not promoting the events properly. He also accuses them of intentionally booking small venues that did not have the capacity for attendance needed to trigger his bonus payments.

The court disagrees with this assertion. Jackson's agreement basically states Bellator can promote and book in any way they see fit. It finds no reason that Jackson can argue that he did not have sufficient understanding of the terms when the deal was signed. Jackson also alleges that other extracurricular promises that Bellator made were not fulfilled. These include reality television obligations, a potential movie deal that required access to Paramount Pictures, and wrestling opportunities with TNA.

The court found that Bellator sufficiently fulfilled these obligations by paying Jackson for a four part reality series (Rampage4Real for those of you who, like me, may not have known this was a thing) and also paying for the development of a screenplay that Jackson selected from a group of them that he was given. The fact you haven't seen a movie featuring Jackson since The A-Team is not a breach by Bellator. Jackson's contract provided no stipulation that a movie ultimately needed to be made.

The most damaging finding here is that the court says Bellator is likely to prevail on its breach of contract claim against Jackson. Jackson could terminate the deal if Bellator failed to pay him, or if Jackson believed in good faith that Bellator had breached. Jackson also had to provide Bellator with notice of the breach and a time frame to cure it.

We learn from this injunction that Bellator paid Jackson about $700,000 over the course of his employment with them. We also find that even in the worst case scenario, where Jackson had rightfully terminated his deal, Bellator still has an opportunity to match any deal that Jackson were to sign with another company. Jackson doesn't even bother trying to dispute he didn't give Bellator an opportunity to match the UFC's new deal, rather he just signed one and then he and the UFC trumpeted it to the world. Essentially, Bellator had every right to legally retain Jackson's services, and he breached his own agreement with them by not following the proper procedures it laid out.

Balance of Equities

As we previously discussed, Bellator alleges they would lose both money and effort put in to Jackson if he were allowed to fight for the UFC. They raise a fairly obvious but powerful point when they say the defendant will not suffer hardship if the injunction is issued because "it is not an unreasonable burden on a fighter to refrain from fighting for a competitor until his contractual obligations are satisfied." No, that does not seem unreasonable at all. Jackson signed his deal, and while he may not like it now, no one held a gun to his head and forced him to take $700,000 over the course of his employment.

Jackson's counterargument is that he his career would be basically ruined if he is not allowed to compete on the UFC card. While the court seems to see this as a possibility, it points to the fact that the primary benefit Bellator would derive with Jackson under contract was having Jackson fight for them. That was, literally, the point of their whole agreement. It's a benefit that Bellator would not only lose, but one that their primary competitor would gain in the event that Suter did not issue this injunction.

Jackson has done nothing to show that he wasn't aware of the extent and duration of the exclusivity provisions of his agreement with Bellator. Bellator appears to be perfectly willing to arrange more fights for Jackson, which reduces the weight of his equity argument that his career will come "to a crushing conclusion" if the injunction is issued.

What Happens Next?

With what we know now, it seems likely that Bellator prevail on its lawsuit against Jackson, and Jackson's rights as a fighter remain with Bellator. Jackson's original deal with Bellator was for five fights or twenty-four months, whichever came first. After Jackson's first fight, he and Bellator modified his deal, adding an additional fight and removing the two year term altogether. With his current feelings about the promotion, this was probably not Jackson's best move.

If Bellator wins the suit, which seems likely, Jackson's choices are going to be to fulfill his fight obligations with Bellator or not fight at all. Bellator has few reasons to let him out of his deal, as they don't have to pay him if he doesn't fight, and just giving him their primary competitor isn't a very sound business decision. You can argue that other fighters may view Bellator's treatment of Jackson as a bad thing, and thus not sign with them. This probably isn't an issue though, in the world of MMA there are very few organizations that can pay real money on a regular basis, and Bellator has enough resources to pay well if need be to acquire talent.

The UFC issued a statement yesterday saying they were surprised by the courts decision and tried to hammer home that they relied on Jackson's representation of his situation when signing him to an agreement. This screams of lack of due diligence on their part, and there's no real excuse for it when you have the kind of financial and legal resources that the UFC has at their disposal. Did they not even see the matching provision in Jackson's agreement? It sounds like they never bothered to look at the agreement at all. We also learned in this injunction that Bellator informed the UFC in December of 2014 that Jackson was still under contract with them. The UFC's "surprise" at Bellator trying to enforce its rights is willful ignorance at best, and flat out stupidity or untrue at worst.

For now, it looks like Jackson will stay on the sidelines and entertain us with his humorously spelled social media rants. I'm not sure what would be more surprising at this point, him making up with Bellator and fighting again, or somehow reaching some sort of settlement that allows him to go to the UFC. Bellator is digging in their heels, with no indication that they're going to let up, so whatever the case may be, something surprising will have to happen if we're to see Rampage in the cage anytime soon.

Michael Bane is an attorney and MMA enthusiast working out of Chicago, Illinois.