DraftKings, FanDuel in Settlement Talks Over Consumer Class Actions
Lawyers have asked a federal judge to halt consumer class actions against sports betting sites DraftKings Inc. and FanDuel Inc. while they hash out a possible settlement.
April 13, 2018 at 06:30 PM
3 minute read
The original version of this story was published on National Law Journal
Lawyers have asked a federal judge to halt consumer class actions against sports betting sites DraftKings Inc. and FanDuel Inc. while they hash out a possible settlement.
A joint motion filed on Tuesday gave no details other than to say the lawyers would update the court in 90 days about the settlement talks. The move comes as both sides were awaiting a ruling from U.S. District Judge George O'Toole in Boston on whether to grant the defendants' motions to compel arbitration. O'Toole held a hearing on July 12, but both sides submitted additional briefing after the U.S. Court of Appeals for the Second Circuit ruled for Uber in a case challenging a similar online arbitration agreement.
“We're always open to discussions with the defendants in this litigation, and we're hoping this will go forward in a quick fashion,” said Hunter Shkolnik, of Napoli Shkolnik in New York, who is co-lead counsel in the litigation. “Whenever you have a decision like this outstanding, it's always an interesting time to have discussions.”
Damien Marshall, a partner at Boies Schiller Flexner in New York who represents DraftKings, and FanDuel attorney David McDowell, a partner at Morrison & Foerster in Los Angeles, did not respond to requests for comment.
More than 80 class actions alleged that the websites, which allow players to create their own fantasy teams and win prize money based on the performance of real athletes, engaged in “insider trading” by allowing their employees to participate in contests using nonpublic information, or they enticed consumers to participate in illegal gambling.
In 2016, the companies paid $12 million to settle a case brought by the New York attorney general and, last year, the Massachusetts attorney general settled its case with the companies for $2.6 million.
The scandal also prompted legislative overhauls. Both companies abandoned talks to merge with one another last year following pushback from the Federal Trade Commission.
In court, DraftKings and FanDuel moved to arbitrate the cases in 2016. In their motions, the companies relied on court rulings supporting “click-wrap” arbitration agreements. The sports fantasy sites also had class action waivers in their arbitration agreements.
But on Aug. 17, the Second Circuit found that Uber users had agreed to the ride-hailing company's terms of service, including an arbitration agreement, when they downloaded the app. Last month, U.S. District Judge Jed Rakoff sent the Uber case to arbitration on remand—although reluctantly.
In an Aug. 25 supplemental brief to address the Second Circuit's ruling in Meyer v. Uber Technologies, plaintiffs challenged only FanDuel's arbitration agreement, which they said had some screen details that differed from Uber's. Those include hyperlinks to its terms of use that were neither blue nor highlighted and “lines of text that were more cluttered than Uber's screen.”
FanDuel countered in an Aug. 30 supplemental brief that its registration process was “substantially similar” to Uber's.
“Meyer is strong support for FanDuel's motion to compel arbitration and severely undermines Plaintiffs' arguments against notice and mutual assent,” McDowell wrote. “The decision confirms that the content and format of FanDuel's registration process was sufficient to put Plaintiffs on notice that they 'would be subject to [FanDuel's] contractual terms.”
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllWhy Greg Craig's Trial Was a 'Misguided and Unnecessary' Prosecution
5 minute readLabaton Sucharow Wants State Street Judge Recused After He Hinted at 'Public Corruption'
5 minute readTrending Stories
- 1Gibson Dunn Sued By Crypto Client After Lateral Hire Causes Conflict of Interest
- 2Trump's Solicitor General Expected to 'Flip' Prelogar's Positions at Supreme Court
- 3Pharmacy Lawyers See Promise in NY Regulator's Curbs on PBM Industry
- 4Outgoing USPTO Director Kathi Vidal: ‘We All Want the Country to Be in a Better Place’
- 5Supreme Court Will Review Constitutionality Of FCC's Universal Service Fund
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250