WWE just picked up an important win in the class-action lawsuit over its move to ESPN Unlimited. The U.S. District Court in Connecticut has agreed to halt discovery while the court decides whether the entire case should be kicked out of federal court and sent to private arbitration.
The lawsuit accuses WWE, ESPN and BAMTech of misleading customers about how they would be able to watch WWE Premium Live Events after the company moved its major shows to ESPN Unlimited. WWE had asked the court to put discovery on ice until the arbitration fight is settled, and the judge sided with them.
That means the plaintiffs won’t get access right now to the broad collection of WWE records, communications and other evidence they were seeking while the arbitration issue remains unresolved.
ESPN and BAMTech have also pushed for arbitration after officially joining the lawsuit as defendants. Their argument is pretty straightforward: the plaintiffs subscribed to ESPN Unlimited, which means they agreed to Disney and ESPN’s subscriber terms, including an arbitration clause and restrictions on class-action claims.
The court did note one thing that clearly got its attention. The plaintiffs raised concerns about WWE previously being sanctioned for evidence spoliation in other litigation, but the judge still ruled that wasn’t enough to force WWE through full discovery right now. The ruling stated:
“The Court was concerned to read, in the Plaintiffs’ supplemental brief, that WWE had been sanctioned for evidence spoliation in other cases. But in this case, the appropriate way to address that concern is to remind WWE of the severe consequences that can be imposed if relevant evidence is lost or destroyed after the duty of preservation attaches.”
The judge then explained why discovery is being stopped for the time being.
“To force WWE to undergo the broad and burdensome discovery that the Plaintiffs seek on behalf of themselves and their proposed class, when WWE evidently has a non-frivolous argument that those claims should be addressed in an arbitral forum on an individual basis and under potentially restrictive discovery procedures, would be a disproportionate response.”
The court finished that thought by rejecting the plaintiffs’ argument that discovery should continue anyway.
“While the Court understands the Plaintiffs’ concern, it is insufficient to deny a stay.”
That’s a big deal for WWE because discovery can be one of the messiest parts of a lawsuit, especially when internal emails, business records and other company documents start getting dragged into the fight. For now, that process is stopped while everyone waits to find out whether this case even stays in federal court.
The lawsuit was brought by Michael Diesa and Rebecca Tobak, who claim they were forced to pay extra for ESPN Unlimited despite already having ESPN through cable or live TV providers. Their argument is that WWE marketing and comments from WWE President Nick Khan created the impression that existing ESPN customers would get WWE events with “no upcharge.”
The problem, according to the lawsuit, was that access depended on whether Disney had already worked out integration deals with each individual provider. Some customers could log into the ESPN app using their existing service, while others had to pay another $29.99 to get access.
The plaintiffs are seeking damages, attorneys’ fees, injunctive relief and a jury trial, but all of that could look very different if WWE, ESPN and BAMTech succeed in forcing the dispute into arbitration.
There’s no deadline for the court to rule on that question, which means this legal fight could sit in neutral for a while. But for now, WWE has managed to stop the plaintiffs from digging through its records while the bigger battle over where this case will actually be fought plays out.
What do you think about the court freezing discovery while WWE pushes to move the case into arbitration? Drop your thoughts in the comments and let us know what you think.
