U.S. District Judge Jed Rakoff. U.S. District Judge Jed Rakoff. Photo Credit: Rick Kopstein/ALM

Manhattan U.S. District Judge Jed Rakoff ruled Friday that fantasy sports players could not sue Major League Baseball for fraud over the sign-stealing scandal that has rocked the sport.

The decision by Rakoff, judge from the U.S. District Court for the Southern District of New York, came as a win for MLB and two teams at the center of the controversy, as play across the league had been suspended indefinitely due to the mounting coronavirus crisis.

While Rakoff acknowledged that the Houston Astros and Boston Red Sox had "shamelessly" violated MLB's prohibition against using electronic equipment to lift opposing teams' signals, the claims against the league and its teams were "simply too attenuated" to support the lawsuit.

"But did the initial efforts of those teams, and supposedly of Major League Baseball itself, to conceal these foul deeds from the simple sports bettors who wagered on fantasy baseball create a cognizable legal claim?" Rakoff asked in his 32-page opinion. "On the allegations here made, the answer is no."

A group of DraftKings players had accused MLB of promoting fantasy baseball competitions that it knew were "corrupt and dishonest," saying they never would have wagered on the contests had they known that player statistics were being skewed.

An MLB investigation found that the Astros had improperly used an outfield camera system to steal signs from opposing teams' pitchers in the 2017 and 2018 seasons. The league fined the team $5 million, banned its manager and general manager for one year, and stripped the club of its first- and second-round draft picks for the next two seasons. A disciplinary decision with regard to the Red Sox is still pending.

But attorneys for MLB and the two teams argued that fans had no right to sue over conduct that the league had specifically outlawed.

In a colorful opinion that cited the league's checkered history of high-profile scandals, Rakoff said that the plaintiffs' "verbose, rhetorical, and largely conclusory complaint" had failed to make out that the league owed gamblers a duty to take additional action to prevent player misconduct.

"A sport that celebrates 'stealing,' even if only of a base, may not provide the perfect encouragement to scrupulous play," Rakoff, a professed New York Yankees fan, wrote. "Nor can it be denied that an overweening desire to win may sometimes lead our heroes to employ forbidden substances on their (spit) balls, their (corked) bats, or even their (steroid-consuming) selves."

"But," he said, "as Frank Sinatra famously said to Grace Kelly (in the 1956 movie musical High Society), 'there are rules about such things.'"

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