Case 2:13-cv-00063-JLL-MAH Document 31-3 Filed 03/08/13 Page 1 of 20 PageID: 952

Patrick C. English, Esq. (PCE 7898) DINES AND ENGLISH, L.L.C. 685 Van Houten Avenue Clifton, New Jersey 07013 (973) 778-7575 Attorney for Plaintiff, Bellator Sport Worldwide, LLC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY __________________________________________ : : BELLATOR SPORT WORLDWIDE, LLC, : : Plaintiff, : : v. : : EDDIE ALVAREZ AND JOHN DOES 1-5, : : Defendants. : : : __________________________________________: Civil Action No.: 2:13-cv-00063-JLL-MAH

______________________________________________________________________________ BRIEF IN SUPPORT OF THE MOTION FILED ON BEHALF OF BELLATOR SPORT WORLDWIDE, LLC TO DISMISS COUNTS 3 AND 4 OF THE COUNTERCLAIM FOR FAILURE TO STATE A CAUSE OF ACTION ______________________________________________________________________________

DINES AND ENGLISH, L.L.C. 685 VAN HOUTEN AVENUE CLIFTON, NEW JERSEY 07013 Attorney for Plaintiff, Bellator Sport Worldwide, LLC

PATRICK C. ENGLISH, ESQ. On the Brief

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TABLE OF CONTENTS

TABLE OF CONTENTS .............................................................................................................i

TABLE OF AUTHORITIES .......................................................................................................ii

PROCEDURAL STATEMENT .................................................................................................1 STANDARD REVIEW ...............................................................................................................1 LEGAL ARGUMENT .................................................................................................................4 POINT 1 The Claim For Tortious Interference Must Fail .....................................................................4 POINT 2 The Actions of Bellator Are Privileged and Cannot Form the Basis For A Tortious Interference Count .................................................................................................................8 POINT 3 The Claims Against Bellator Based Upon Breach of Contract Should Be Dismissed ..........12 POINT 4 If It is Alleged That The Submission Of the Proposed Contract and Claims Through Counsels Letter That It Was A Match, That Activity Would Be Privileged and Would Not Be Accessible ..................................................................................................................13 CONCLUSION ............................................................................................................................15

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TABLE OF AUTHORITIES

Page(s)
Ashcroft v. Iqbal, 566 US 622 (2009)........................................................................2,3,8,12,13,15 Bell Atlantic Corp. v. Twombly, 550 US 544 (2007) ...............................................1,2,3,12,13,15 Buck v. Hampton Twp. School District, 452 F.3d 256, 260 (3d Cir. 2006)...............................................................................3 Burtch v. Millberg Factors, Inc. 662 F.3d 212, 220-221 (3d Cir. 2011) ...................2 Cardtoons, L.L.C. v. Major League Baseball Players Ass'n, 182 F.3d 1132 (10 Cir. 1999)...................................................................................... 9,11,14 Cargill Global Trading v. Applied Development Co., 706 F.Supp. 2d 563 (D.N.J. 2010) .............................................................................7 Century 21 Real-Estate LLC v. All Professional Realty, ____ F.Supp. 2d ____, 2012 W.L. 3260452 (E.D. Cal. 2012) .................................7 Coastal States Marketing, Inc. v. Hunt, 694 F.2d 1358, 1367 (5th Cir. 1983) ..........................................................................11,14 Connelly v. Steel Valley School Dist., --- F.3d ---, 2013 WL 264346, *2 (3d Cir 2013) .......................................................2 Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005) ...................................................................................................13 Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (2009 ............................................................................................13 Greene v. BMW of North America, 2012 WL 5986457; 79 UCC Rep. Serv. 2d 167 (D.N.J. 2012) .................................4 Hart v. Electronic Arts, Inc., 740 F.Supp.2d 658, 662-63 (D.N.J. 2010) .................................................................3 Hayes v. Wachovia Mortgage, FSB, 2011 WL 5036369 (D.N.J. 2011) ..............................................................................4 Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d. 737, 747 (3d 1996).......................................................................................5,6

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TABLE OF AUTHORITIES (Continued)

In re Burlington Coat Factory Sec., Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)...........................................................................3 LaMorte Burns & Co., Inc. v, Walters, 167 N.J. 285, 307 (2001) ...........................................................................................7 Lighting Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1167 (3d 1993)......................................................................................5 Louis Schlesinger Co. v. Rice, 4 N.J. 164 at 181 (1950).............................................................................................6 Matushita Electronics Corp. v. Loral Corp., 974 F. Supp. 345 (S.D.N.Y. 1997) ............................................................................11,4 New Jersey Sports Productions, Inc. v. Bobby Bostick Promotions, LLC, 405 N.J. 179 (Ch. 2007) .............................................................................................8,9,10,11,14 Papasan v. Allain, 478 U.S. 265, 289, 106 S.Ct. 2932, 92 L.Ed. 2d 209 (1986) .....................................3 Peppers v. Booker, 2013 WL 396136, *2 (DNJ 2013) .............................................................................2 Prime Time 24 Joint Venture v. National Broadcasting Co., Inc., 219 F.3d 92 (2d Cir. 2000).........................................................................................11,14 Puder v. Buechel, 183 N.J. 428, 437-38, 874 A.2d 534 (2005) ..............................................................9,10 Printing Mart-Morristown v. Sharp Electronics Corp., 116 NJ 739 (1989) .....................................................................................................4,5,6 Sandler v. Lawn-A-Mat Chemical and Equipment Corp., 141 N.J. Super. 437, 451-52 (App. Div. 1973) ..........................................................7 Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010)...............................................................................2,12 Sosa v. DirectTV, Inc., 437 F.3d 923 (9th Cir. 2006) .....................................................................................11,14

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TABLE OF AUTHORITIES (Continued)

Tellabs Inc. v. Makor Issues and Rights Ltd., 581 U.S. 308, 319, 127 S.Ct. 2449, 2507, 168 L.Ed. 2d 179 (2007) .........................2,13 Varrallo v. Hammod, 94 F.3d. 842 (3d. 1996) ..............................................................................................4

RULES Federal Rule of Civil Procedure 12(b)(6) ..................................................................1,2,3,15 FRCP 8 .......................................................................................................................2,13 FRCP 8(a)(2) ..............................................................................................................13 FRCP 9................................................................................................................................. 2

OTHER ....................................................................................................................................

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PROCEDURAL STATEMENT This brief is submitted in support of the motion of Bellator Sport Worldwide, LLC pursuant to FRCP 12(b)(6) to dismiss Counts Three and Four of the Counterclaim of Eddie Alvarez. Count Three of the Counterclaim is a claim for tortious interference. Count Four is a claim for breach of contract. STANDARD OF REVIEW This motion to dismiss for failure to state a claim upon which relief can be granted comes before the Court under Federal Rule of Civil Procedure 12(b)(6). Under R. 12(b)(6) a court may grant a motion to dismiss if the complaint fails to state a claim upon which relief can be granted. The Supreme Court in Bell Atlantic Corp. v. Twombly, 550 US 544 (2007) addressed the standard of review for 12(b)(6) motions opining: [w]hile a complaint attacked by Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right of relief above speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact). Id. at 555. (internal citations and footnote omitted) More recently, the Supreme Court expanded on the plausibility standard in Ashcroft v. Iqbal, 566 US 622 (2009) stating a claim will be dismissed unless it: contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Twombly at 570. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Twombly at 556. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief. Twombly at 557. Iqbal at 678.

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The Iqbal Court continued: Two working principles underlie Twombly. First, the tenet that a court must accept a complaint's allegations as true is inapplicable to threadbare recitals of a cause of action's elements, supported by mere conclusory statements. Towmbly at 555. Second, determining whether a complaint states a plausible claim is context-specific, requiring the reviewing court to draw on its experience and common sense. Twombly at 556. A court considering a motion to dismiss may begin by identifying allegations that, because they are mere conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the complaint's framework, they must be supported by factual allegations. When there are well pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Iqbal at 663-664. To evaluate motions made under Rule 12(b)(6) the Third Circuit has articulated a three-part analysis: First, the court must tak[e] note of the elements a plaintiff must plead to state a claim. Second, the court should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Finally, where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief. Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010) (quoting Iqbal, 556 US 662, at 673-679). See also Burtch v. Millberg Factors, Inc. 662 F.3d 212, 220-221 (3d Cir. 2011); Peppers v. Booker, 2013 WL 396136, *2 (DNJ 2013); Connelly v. Steel Valley School Dist. --F.3d ---, 2013 WL 264346, *2 (3d Cir 2013). Although brevity is encouraged, pleadings must nonetheless contain enough factual allegations to give defendants fair notice of both complainants claims and the grounds for those claims. See FRCP 8, 9; Tellabs Inc. v. Makor Issues and Rights Ltd., 581 U.S. 308, 319, 127 S.Ct. 2449, 2507, 168 L.Ed. 2d 179 (2007). The Court will not accept as true bald assertions, conclusions, bald assertions or inferences. Ashcroft v. Iqbal, 556 U.S. 662, 678-79, 129 S.Ct. 1937, 1949-50, 173 L.Ed. 2d 868 (2009). A claimant may not assert legal conclusions couched

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or masquerading as facts. Bell Atlantic Corp. v. Twombly, 550 US 544, 555, 127 S.Ct. 1955, 1965, 167 L.Ed. 2d 924 (2007); Papasan v. Allain, 478 U.S. 265, 289, 106 S.Ct. 2932, 92 L.Ed. 2d 209 (1986). Nor can asserted conclusions contradict complainants own exhibits or

documents of which the court can take proper notice. Pleaders must show that their allegations possesses enough heft to establish an entitlement to relief (and thereby are sufficient to allow the costly process of litigation to continue). Twombly, supra at 1966. The pleadings, including related documents which the Court can consider, must allege claims which are more than simply conceivable. They must be plausible. Twombly, supra at 570, 557, n. 5. When measured under the above standards, it is clear that Counts 3, premised on Intentional Interference with Prospective Economic Advantage and Count 4, premised upon Breach of Contracts of the Counterclaim must be dismissed. In Points 2 and 4 of this brief we refer to documents attached to or incorporated in the pleadings on file. When deciding a motion to dismiss under Rule 12(b)(6), a court may consider documents annexed to a complaint or upon which the complaint relies See, e.g., Buck v. Hampton Twp. School District, 452 F.3d 256, 260 (3d Cir. 2006), Hart v. Electronic Arts, Inc., 740 F.Supp.2d 658, 662-63 (D.N.J. 2010). Further, when the pleading explicitly refers to a document and the party moving under Rule 12(b)(6) attaches an undisputedly authentic copy of that document as an exhibit to a motion to dismiss, the Court may consider that document in deciding the motion under the incorporation by reference doctrine. Id. (citing In re Burlington Coat Factory Sec., Litig., 114 F.3d 1410, 1426 (3d Cir. 1997). As Alvarez, in his Answer and Counterclaim has expressly referenced the documents annexed to the Complaint and acknowledge their authenticity (and in some cases expressly relying upon them), this Court may properly consider these exhibits without converting the motion to dismiss into one for summary

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judgment. See, e.g., Hayes v. Wachovia Mortgage, FSB, 2011 WL 5036369 (D.N.J. 2011); Greene v. BMW of North America, 2012 WL 5986457; 79 UCC Rep. Serv. 2d 167 (D.N.J. 2012). LEGAL ARGUMENT POINT 1 The Claim For Tortious Interference Must Fail. The tortious interference alleged in the Counterclaim at Count 3 is clearly set forth in paragraph 46 of the Counterclaim: By, among other things, intentionally and in bad faith delivering the Bellator Offer claiming it matched the Zuffa Offer when it did not and when Bellator had no ability or intention to perform certain portions of the Bellator Offer, Bellators conduct constitutes, among other things, intentional interference with Alvarezs prospective economic advantage. This allegation must be measured under New Jersey Law. In Printing Mart-Morristown v. Sharp Electronics Corp., 116 NJ 739 (1989) the Supreme Court of New Jersey articulated the long standing four prong test for recovery under tortious interference with prospective economic advantage. The Court stated: A complaint based on tortious interference must allege facts that show some protectable right a prospective economic or contractual relationship. Although the right need not equate with that found in an enforceable contract, there must be allegations of fact giving rise to some reasonable expectation of economic advantage. A complaint must demonstrate that a plaintiff was in pursuit of business. Second, the complaint must allege facts claiming that the interference was done intentionally and with malice. For purposes of this tort, the term malice is not used in the literal sense requiring ill will toward the plaintiff. Rather, malice is defined to mean that the harm was inflicted intentionally and without justification or excuse. Third, the complaint must allege facts leading to the conclusion that the interference caused the loss of the prospective gain. The plaintiff must show that if there had been no interference there was a reasonable probability that the victim of the interference would have received the anticipated economic benefits. Fourth, the complaint must allege the injury caused damage. Id. at 751 (internal citations omitted). (emphasis added). 4

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The Third Circuit has followed the Printing Mart jurisprudence. Specifically, the Court in Varrallo v. Hammod, 94 F.3d. 842 (3d. 1996) stated: The Supreme Court of New Jersey has identified the four elements of a prima facie case for this tort: (1) a reasonable expectation of economic advantage to plaintiff, (2) interference done intentionally and with malice, (3) causal connection between the interference and the loss of prospective gain, and (4) actual damages. quoting Printing Mart at 751. Varrallo at 848. See also Lighting Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1167 (3d 1993); Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d. 737, 747 (3d 1996). Analyzing the case before the Court Alvarez fails to set forth in the counterclaim: 1) a reasonable expectation of economic advantage; 2) the interference was done intentionally and with malice; 3) causal connection between the interference and loss of prospective gain; and 4) actual damages. The contracts submitted by Alvarez, annexed to the Counterclaim, show that Bellator had every right to submit a matching offer. The 2008 contract with Alvarez states clearly: 18. FIRST/LAST REFUSAL A) Upon expiration of the Term, FIGHTER agrees to negotiate exclusively and in good faith with PROMOTER regarding the extension or renewal of the Term for a period of ninety (90) days following the expiration of the Term. B) In the event no such agreement is reached between FIGHTER and PROMOTER during the aforementioned ninety (90) day period, FIGHTER may negotiate with other promotional entities, subject to PROMOTERs right to match the terms of any agreement offered to FIGHTER by such other promotional entity. PROMOTERs right to match shall begin at the end of the ninety (90) day period and last for one (1) year. C) FIGHTER shall provide PROMOTER with prompt written notice of any such offer, containing full details in regards thereof. Such notice shall constitute an exclusive, irrevocable offer to contract with PROMOTER on the same terms and conditions. PROMOTER shall have fourteen (14) 5

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business days after receipt of said notice to either accept or reject said offer. If PROMOTER rejects said offer, FIGHTER may accept said offer with the promotional entity on the same terms and conditions and without any modifications thereto... (emphasis added). (See Exhibit A to the Verified Counterclaim). On November 2, 2012 a separate letter agreement, slightly modifying the terms of the base promotional agreement was entered into. That letter agreement read, in pertinent part: For the avoidance of doubt, upon your signature below, you are permitted to negotiate with and entertain offers from, and only from, Zuffa, LLC. Upon receipt of such an offer, you are thereafter obligated to produce to Bellator a true copy of the proposed agreement with Zuffa, LLC, at which time Bellator shall have fourteen (14) business days from receipt of the full agreement to consider whether it will match the terms of the offer. Should Bellator elect to match the offer, no further offers may be entertained by you and you will be obligated to contract with Bellator on the terms that Bellator agreed to match. (emphasis added). (See Exhibit B to the Verified Counterclaim). Consequently the documents annexed to Mr. Alvarezs own Verified Counterclaim show that Bellator had every right to submit a matching offer. And that is all that is alleged here that Bellator submitted an offer which it contended matched. Recall that Mr. Alvarez must allege facts (not conclusions) that Bellator acted with malice. Malice, in this sense, is the intentional doing of a wrongful act without justification
or excuse.1 (emphasis added). Printing Mart-Morristown, supra at 756, citing Louis Schlesinger

Co. v. Rice, 4 N.J. 164 at 181 (1950). See, also Ideal Dairy Farms, Inc. v. Farmland Dairy Farms, Inc., 282 NJ Super. 140, 199 (1995). In Ideal Diary Farms, the Appellate Division held that a legitimate business reasons was justification sufficient to bar a successful tortious interference claim. Ideal Diary Farms, supra at199-204. The wrongful act complained of is the mere submission of an offer which Bellator claimed (and still claims) matched the Zuffa offer. Yet Bellator, as shown in the contracts
1

The New Jersey Supreme Court also makes it clear that the burden is on the person or entity claiming tortious interference.

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annexed to the Verified Counterclaim, had a legal right to match by virtue of the contracts entered into between Bellator and Alvarez. Instructive in this regard is Cargill Global Trading v. Applied Development Co., 706 F.Supp. 2d 563 (D.N.J. 2010). In that case Judge Walls pointed out that A partys actions in its own interest and its own financial benefit will not rise to the level of malice. See, Sandler v. Lawn-A-Mat Chemical and Equipment Corp., 141 N.J. Super. 437, 451-52 (App. Div. 1973). Instead a business related explanation can justify a partys action, so long as the business related explanation justified not only the defendants motive and purpose but also the means it employed. See LaMorte Burns & Co., Inc. v, Walters, 167 N.J. 285, 307 (2001). See, also Century 21 Real-Estate LLC v. All Professional Realty, ____ F.Supp. 2d ____, 2012 W.L. 3260452 (E.D. Cal. 2012), in which a California District Court, utilizing New Jersey Law, also held that a business related explanation can justify a partys action so long as the business related explanation justifies not only the defendants motive and purpose but also the means employed. In this case the contracts annexed to Mr. Alvarezs own papers show the business purpose for Bellators action. It is shown by Alvarezs own complaint and attachments thereto that Bellator had negotiated twice for a right to match any third partys offers to Alvarez, and that it had a right to do so when presented with a third party offer. (See Exhibits A and B to Mr. Alvarezs Verified Counterclaim). It is obvious that Bellator was operating in its business self-interest when it submitted the offer which it claims matched the Zuffa offer (The Bellator offer is incorporated into the Counterclaim at paragraph 13 of the Verified Counterclaim). Clearly, this business related explanation for Bellators actions justify the nature, purpose and the means employed by Bellator in submitting to Mr. Alvarez an offer which it claims met the

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Zuffa offer. Following its contractual right to match certainly does not give rise to a tortious interference. We acknowledge that the word malice is used in the Counterclaim at paragraph 49 (Defendants actions were, and continue to be, willful, wanton, malicious, and/or in reckless disregard to Alvarezs rights). However, this is just the sort of language that the Supreme Court, in Ashcroft v. Iqbal, US 622 (2009) said should be disregarded. As the Supreme Court stated, the first stage is to begin by identifying allegations that, because they are mere conclusions, are not entitled to the assumption of truth. Iqbal, supra at 663. Thus, the sole fact pled is that Bellator submitted a contract to Alvarez which it believed (and contended in this litigation) matched the Zuffa offer. This is simply not sufficient to state a cause of action for tortious interference and thus the Third Count of the Counterclaim should be dismissed. POINT 2 The Actions of Bellator Are Privileged and Cannot Form the Basis For a Tortious Interference Count. The sending of a contract which Bellator claimed matched the offer of Zuffa is a predicate to this action brought by Bellator in which it claimed that Alvarez breached paragraph 18 of the 2008 contract with Bellator as well as the letter agreement of November 2, 2012. Insofar as any actions by Bellator are concerned, the only factual assertions we can discern is that Bellator, through counsel, sent a proposed contract to Alvarez through counsel, claiming in correspondence by counsel that it matched the Zuffa offer. See Exhibits E and I to the Bellator Complaint, adopted by reference in Alvarezs Answer and Counterclaim. In New Jersey Sports Productions, Inc. v. Bobby Bostick Promotions, LLC, 405 N.J. 179 (Ch. 2007) Judge Klein, in a matter of first impression in the State Courts of New Jersey, held that an absolute privilege extends to counsels pre-litigation correspondence. There, as here, the 8

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correspondence and proposed contract was sent only to Mr. Alvarezs counsel. While the first letter sent did not expressly threaten court action, 2 (and neither did the letter sent in Bostick) the Court held: There is good reason for the courts of this State to confer an absolute privilege upon the widespread practice among lawyers of prelitigation correspondence threatening suit on behalf of their clients. Such communications promote and further the strong public policy favoring the settlement of litigation that is well-recognized in a long line of cases in New Jersey and elsewhere. See, e.g., Puder v. Buechel, 183 N.J. 428, 437-38, 874 A.2d 534 (2005); Cardtoons, supra, 335 F.3d at 1167 (Requiring potential plaintiffs to bypass the post office on the way to the courtroom would under- mine our longstanding policy favoring efforts to avoid litigation.). The purpose of such letters is to motivate a response in the form of an accommodation which, if satisfactory to the writer, avoids the need for further action. While the court is not aware of any statistical data by which to measure its success in averting litigation, common sense tells us that pre-suit dialogue nips a number of disputes in the bud. Judge Klein went on to say: If, on the other hand, the privilege is not extended to this type of communication, lawyers will be reluctant to write to their adversaries for fear of ex- posing clients to additional claims. Litigation counsel's efforts to achieve some relief at a modicum of cost will be chilled; clients will be advised to plunge headlong into suit or risk a defamation or tortious interference claim from a pre-suit letter. Considering how routine is the resort to pre-suit correspondence (which sometimes is parried back and forth), a virtual sea change in litigation practice would result. Id. at 188. In order to be privileged the contents of the correspondence must bear a relationship to the subject matter of the litigation ( a fact which Alvarezs pleadings acknowledge since they are at the heart of both the complaint and the counterclaim) and must be written and sent by counsel rather than the party itself. Id. at 133. Communications should be basically factual without scurrilous diatribes and should evidence a reasonable belief that the client has a legitimate

The first letter sent was sent on December 13, 2012 (Exhibit E to the Bellator Complaint). The second letter sent on December 18, 2012 (Exhibit I to the Bellator Complaint) did point out that Bellator would enforce its rights if necessary.

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In New Jersey Sports Productions, Inc. v. Bobby Bostick Promotions, LLC, 405 N.J. 179 (Ch. 2007) Judge Klein, in a matter of first impression in the State Courts of New Jersey, held that an absolute privilege extends to counsels pre-litigation correspondence. There, as here, the correspondence and proposed contract was sent only to Mr. Alvarezs counsel. While the first letter sent did not expressly threaten court action, 3 (and neither did the letter sent in Bostick) the Court held: There is good reason for the courts of this State to confer an absolute privilege upon the widespread practice among lawyers of prelitigation correspondence threatening suit on behalf of their clients. Such communications promote and further the strong public policy favoring the settlement of litigation that is well-recognized in a long line of cases in New Jersey and elsewhere. See, e.g., Puder v. Buechel, 183 N.J. 428, 437-38, 874 A.2d 534 (2005); Cardtoons, supra, 335 F.3d at 1167 (Requiring potential plaintiffs to bypass the post office on the way to the courtroom would under- mine our longstanding policy favoring efforts to avoid litigation.). The purpose of such letters is to motivate a response in the form of an accommodation which, if satisfactory to the writer, avoids the need for further action. While the court is not aware of any statistical data by which to measure its success in averting litigation, common sense tells us that pre-suit dialogue nips a number of disputes in the bud. Judge Klein went on to say: If, on the other hand, the privilege is not extended to this type of communication, lawyers will be reluctant to write to their adversaries for fear of ex- posing clients to additional claims. Litigation counsel's efforts to achieve some relief at a modicum of cost will be chilled; clients will be advised to plunge headlong into suit or risk a defamation or tortious interference claim from a pre-suit letter. Considering how routine is the resort to pre-suit correspondence (which sometimes is parried back and forth), a virtual sea change in litigation practice would result. Id. at 188. In order to be privileged the contents of the correspondence must bear a relationship to the subject matter of the litigation ( a fact which Alvarezs pleadings acknowledge since they are
3

The first letter sent was sent on December 13, 2012 (Exhibit E to the Bellator Complaint). The second letter sent on December 18, 2012 (Exhibit I to the Bellator Complaint) did point out that Bellator would enforce its rights if necessary.

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at the heart of both the complaint and the counterclaim) and must be written and sent by counsel rather than the party itself. Id. at 133. Communications should be basically factual without scurrilous diatribes and should evidence a reasonable belief that the client has a legitimate interest deserving of protection. Id. at 183-184. All of the correspondence between the parties related to the right to match was drafted and sent by counsel and indisputably evidenced a serious belief that the client had a legitimate interest. None of the letters sent back forth could be described as anything other than professional and they contain no diatribes or scurrilous attacks. The letters (and proposed contract) are tailored to the facts as Bellator understood them. As in Bostick These very same facts were recited in the complaint filed within a matter of weeks thereafter. It would be incongruous to protect the complaint, but not the letter containing virtually identical information... Judge Klein dismissed the

complaint for failure to state a claim. For similar holdings in other jurisdictions, see, Matushita Electronics Corp. v. Loral Corp., 974 F. Supp. 345 (S.D.N.Y. 1997); Coastal States Marketing, Inc. v. Hunt, 694 F.2d 1358, 1367 (5th Cir. 1983); Cardtoons, L.L.C. v. Major League Baseball Players Ass'n, 182 F.3d 1132 (10th Cir. 1999); Sosa v. DirectTV, Inc., 437 F.3d 923 (9th Cir. 2006); Prime Time 24 Joint Venture v. National Broadcasting Co., Inc., 219 F.3d 92 (2d Cir. 2000). Again, the gravamen of the complaint as it alleges tortious interference is that Bellator claimed its offer matched that of Zuffa. This was a legal position communicated to Alvarezs position by counsel and, had Alvarez agreed, would have averted this litigation. It clearly was pre-litigation in nature and therefore privileged under New Jersey Law. Thus the claim for tortious interference must fail.

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POINT 3 The Claims Against Bellator Based Upon Breach of Contract Should Be Dismissed. Count 4 of Mr. Alvarezs Counterclaim alleges that, The Bellator Contract requires
Bellator to perform certain enumerated duties and obligations. Paragraph 52. It is also alleged that, The Bellator Contract is also subject to the implied covenant of fair dealing. Paragraph 53. It is further asserted, Defendant breached both the contract and the implied covenant of good and fair dealing in tendering the Bellator Offer. Paragraph 54. If ever there was a Count of a complaint flying directly in the face of Twombly and

Iqbal, this is it. The allegations are nothing but legal conclusions, bereft of any assertion of fact. To again quote Iqbal, The tenet that a court must accept a complaints allegations as true is inapplicable to threadbare recitals of a cause of actions elements, supported by mere conclusory statements. Iqbal at 663, Twombly at 555. The Court, considering a motion to dismiss may begin by identifying allegations that, because they are mere conclusions, are not entitled to the assumption of truth. Id. Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010). We cannot even tell from the pleading in Count 4 of the Counterclaim to what contract which Mr. Alvarez is referring to in paragraphs 52 and 53. Is it the contract which Bellator entered into with Mr. Alvarez in 2008? Is it the contract which was entered into in November of 2011? Was it the contract which Bellator proffered to match the Zuffa offer in December of 2012? We cannot tell. If it was either the contract of 2008 or November of 2012 which is being referred to, exactly what is the factual premise for the conclusion that Bellator breached the contract and the implied covenant of good faith? One can peruse the Counterclaim without finding the factual premise for such a claim.

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In Federal Court one cannot simply file a complaint and state that defendant violated a contract. Such a vague allegation simply fails to meet the pleading requirements of FRCP 8. 4 A complaint must contain enough facts to give defendants fair notice of a complaints claims and the factual grounds for them. See, Tellabs, Inc. v. Makor Issues and Rights, Ltd., 581 U.S. 308, 314 (2007); Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005). To prevent summary dismissal a complaint must now (after Twombly and Iqbal) allege sufficient factual matter to show a claim is factually plausible. Iqbal at 1948. The Supreme Courts ruling in Iqbal requires that a plaintiff demonstrate through the factual allegations of his complaint that they are plausible. Id. at 1949-50.; Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (2009). As the Third Circuit has said, Iqbal provides the final nail in the coffin that facts sufficient to support legal conclusions need not be pled. Fowler, supra at 210. No facts have been asserted in Count IV raising a plausible inference that Bellator inflicted a cognizable harm on Mr. Alvarez through either a direct breach of contract or breach of the implied covenant of good faith as required by Twombly and Iqbal. Thus Count IV must be dismissed for failure to state a claim under which relief may be granted. POINT 4 If It is Alleged That The Submission Of the Proposed Contract and Claims Through Counsels Letter That It Was A Match, That Activity Would Be Privileged And Would Not Be Accessible. In the prior point we Point we point out the breach of contract claim in bereft of any factual support and fails to muster under Twombly and Iqbal. However, if it is alleged that the submission of a contract which Bellator contended was a match, the claim must similarly fail. The proposed contract was obviously drafted by counsel.
4

FRCP 8(a)(2) requires a a short and plain statement of the claim showing that the pleader is entitled to relief.

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See letter of December 13, 2012 annexed as Exhibit E to Bellators Complaint and adopted by reference in paragraph 16 of Alvarezs answer in which he states that the letter (and other related documents) speak for themselves. Subsequent correspondence was all sent by counsel (See, e.g. Exhibit I to Bellators Complaint, also acknowledged in Alvarezs answer at paragraph 20, also with the words that the documents speaks for themselves) and nowhere in Alvarezs pleading is it asserted otherwise. In the second Point of this brief we point out that pre-litigation correspondence is privileged under New Jersey Law, as well as the law of many other jurisdictions. See, New Jersey Sports Productions, Inc. v. Bobby Bostick Promotions, LLC, 405 N.J. 179 (Ch. 2007); Matushita Electronics Corp. v. Loral Corp., 974 F. Supp. 345 (S.D.N.Y. 1997); Coastal States Marketing, Inc. v. Hunt, 694 F.2d 1358, 1367 (5th Cir. 1983); Cardtoons, L.L.C. v. Major League Baseball Players Ass'n, 182 F.3d 1132 (10th Cir. 1999); Sosa v. DirectTV, Inc., 437 F.3d 923 (9th Cir. 2006); Prime Time 24 Joint Venture v. National Broadcasting Co., Inc., 219 F.3d 92 (2d Cir. 2000). We thus adopt the same argument made in Point 2 of this brief, though now applying it to Count 4 of Alvarezs Counterclaim.

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CONCLUSION For the reasons set forth herein, Counts 3 and 4 fail to pass muster under Twombly and Iqbal and, further, the actions complained of are privileged. dismissed pursuant to Rule 12(b)(6). Thus those counts must be

BY:

/s/ Patrick C. English PATRICK C. ENGLISH (PCE7898) DINES AND ENGLISH, L.L.C. 685 Van Houten Avenue Clifton, New Jersey 07013 (973) 778-7575 Attorney for Plaintiff, Bellator Sport Worldwide, LLC

Date: March 8, 2013

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