DraftKings, FanDuel Class Action Lawsuits to Be Centralized in Mass.

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Last week, the class actions that hit the online fantasy sports companies DraftKings and FanDuel were centralized in Massachusetts federal court.

The DraftKings and FanDuel class action lawsuits claim that the companies unfairly tricked consumers into one sided contests designed to make only an elite few win, as well as alleging the companies engaged in illegal gambling and “bonus fraud.”

The parties to the class actions argued for consolidation in the Southern District of New York, the Southern District of Florida, the Eastern District of Louisiana, the Southern District of Illinois, the District of Colorado and the District of Massachusetts last month.

Some parties argued that the class actions should not be consolidated because the claims in each of the lawsuits are not identical and litigating them together could lead to problems down the road.

According to the Judicial Panel on Multidistrict Litigation, combining the class actions in Massachusetts makes sense because many of the cases involve the same proposed class members and factual issues. The JPML acknowledged the theories of liability in each class action may not be the same, but found that for pre-trial purposes at least, combination of the cases made sense.

“A significant number of related actions that encompass all three theories of liability are pending in the district,” said the JPML last week. “The District of Massachusetts presents a convenient and accessible forum with a significant connection to this litigation,” the panel continued, “DraftKings is headquartered in the district and the individual defendants reside either in the district or nearby, which will facilitate discovery.”

Regarding the parties’ arguments that the class actions should be litigated separately, the JPML pointed out that combining these cases at this point would outweigh the drawbacks identified by the parties.

“Alternatives to this approach, such as informal coordination or cooperation among the parties and courts with respect to common discovery or pretrial motions, are less practicable given the large number of actions and courts,” said the JPML in their order. “And, as with any MDL, the transferee judge may account, at his discretion, for any differences among the actions through the use of appropriate pretrial devices, such as separate tracks for discovery or motion practice,” they continued.

In support of their decision to combine the class actions in Massachusetts, the JPML also pointed out in their order that all of the claims will probably require testimony from DraftKings and FanDuel employees and both companies are located in Boston.

According to the order issued by the JPML, U.S. District Judge George A. O’Toole Jr. will oversee the combined class action lawsuits.

The plaintiffs are represented by attorneys from Kantrowitz Goldhamer & Graifman PC, Lieff Cabraser Heimann & Bernstein LLP, Freedman Boyd Hollander Goldberg Urias & Ward PA,Pomerantz LLP, Keller Rohrback LLP, Robbins Arroyo LLP, and Cuneo Gilbert & LaDuca LLP, among others.

The Combined DraftKings and FanDuel Class Action Lawsuit is In re: Daily Fantasy Sports Litigation, Case No. 2677, in the U.S. District Court for the District of Massachusetts.

UPDATE: On June 30, 2016, daily fantasy sports player plaintiffs laid out their grievances in a 273-page consolidated class action lawsuit alleging DraftKings and FanDuel duped players into participating in illegal gambling operations that gave an unfair advantage to their own employees who also participated in the daily competitions.

UPDATE 2: On Dec. 12, 2018, FanDuel players claimed that the company’s user agreement was purposefully obscure, arguing that they are not bound by the arbitration pact.