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From Antitrust Law Daily, March 12, 2019

MMA promoter’s conspiracy claims against casinos TKO’d

By Nicole D. Prysby, J.D.

An MMA event promoter failed to demonstrate the existence of an agreement between several casinos that allegedly conspired to boycott him from promoting any events at their facilities.

All antitrust claims by a mixed martial arts (MMA) event promoter against a group of casinos that allegedly excluded him from promoting events at their facilities were dismissed for failure to allege facts supporting an agreement, held the federal district court in Philadelphia. The court rejected the argument that one casino offering terms so poor that it knew he would be forced to decline was not evidence of a conspiracy, especially given that the casino offered those same terms to other promoters. Even if the casinos decided independently to boycott the plaintiff, there were no allegations regarding emails, meetings, or employees to support an agreement between the casinos. His "essential facilities" claim also failed, because his own allegations showed that alternate facilities were available to him and that he was not a competitor of the casinos (Kerwin v. Parx Casino, March 8, 2019, Schmehl, J).

Background. The promoter alleged that defendant Sands Casino offered terms so poor that promoting an event there would be unprofitable, in an attempt to get him to decline the offer without having to explicitly deny him access. Defendant SugarHouse casino allegedly told the promoter it had no interest in hosting an MMA or boxing event in the fall of 2016, but then scheduled multiple events with different promoters. The promoter also alleged that SugarHouse explicitly told him that there would be no contractual discussions with him for any events in 2016 or 2017 and that SugarHouse stated in an email that it would never "let him in" because of a prior lawsuit. With respect to Parx Casino, the plaintiff alleged that the casino allowed competing MMA companies access, but refused to allow him to promote any events there.

The promoter previously settled similar claims with two other Pennsylvania casinos, and agreed not to promote events at the two casinos. The current boycott at issue, the promoter alleged, was punishment for that prior suit.

Sherman Act claims. The promoter alleged that the casinos, direct competitors of each other, entered into a horizontal conspiracy which is a per se antitrust violation. But the court found that he failed to provide any direct evidence of an agreement between the defendants. His sole allegation of an alleged conspiracy was that "[a]ll of the Pennsylvania Casinos, acting in concert with one another are now boycotting plaintiff from being able to promote his mixed martial arts events at all of their casinos." The court rejected his argument that the SugarHouse email was direct evidence of a conspiracy; at best, it was unilateral action on the part of SugarHouse. Actions by Sand Casino to supposedly allow him to promote an event in the hopes that he would fail were, similarly, only unilateral actions by that one business and his claim was weakened by the fact that Sands offered the same allegedly inflated terms to other MMA promoters. Parx Casino’s action of declining to host the plaintiff’s events could easily be a product of the harassing and threatening nature of the plaintiff’s constant communications with the casino. Even taken together, the actions by the casinos were merely parallel conduct that could easily be only independent action. The plaintiff presented no plus factors to rule out the possibility that the casinos were acting independently. Because "common economic experience" and other facts are an obvious alternative explanation for the alleged common behavior, his claim fails. Even if the casinos decided independently to boycott the plaintiff, there were no facts supporting an agreement between them—the plaintiff produced no evidence of an email, meeting, or employee related to such an agreement.

The promoter also brought an "essential facilities" claim, asserting that the casinos (including the two he settled with in his prior lawsuit) are collective monopolists who have control of essential facilities in Central and Eastern Pennsylvania to which he needs access in order to remain a viable competitor in the MMA industry. That claim failed as well, because his allegations undermined any argument that the casinos are essential facilities. He alleged that he promoted 16 of his 29 MMA events at the National Guard Armory in Philadelphia, demonstrating that other venues exist. Two of the five casinos that he alleges comprise the essential casino market are not available because he agreed in the settlement not to host events at these casino’s event centers. And he cannot demonstrate that he is a competitor, because he is not in the casino business and the defendants are not in the business of promoting MMA events.

This case is No. 5:17-cv-05582-JLS.

Attorneys: Ryan Kerwin, pro se. Amy M. Kirkpatrick (Kane Pugh Knoell Troy & Kramer LLP) for Parx Casino and Greenwood Gaming & Entertainment LLC. Brian A. Berkley (Fox Rothschild LLP) for SugarHouse HSP Gaming, LP.

Companies: Greenwood Gaming & Entertainment LLC; SugarHouse HSP Gaming, LP

MainStory: TopStory Antitrust PennsylvaniaNews

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