Judge Rejects Settlement for 3 Full Tilt Poker Class Actions

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On May 26, a proposed class action settlement and Class certification for three RICO class action lawsuits against Full Tilt Poker were rejected by a New York magistrate judge, who found that the proposed settlements denied due process to some Class Members. The three separate Full Tilt Poker class action lawsuits similarly allege that the company attempted to defraud millions of account holders and violated Racketeer Influenced and Corrupt Organizations Act (RICO).

According to U.S. Magistrate Judge Kevin Nathaniel Fox’s ruling, the three putative Full Tilt Poker RICO class action lawsuits, referred to as Segal, Lawson, and Jetha actions named after the lead plaintiffs involved in each complaint, do not meet the standard for Class certification. Additionally, the proposed settlement agreed upon by the three main plaintiffs do not benefit the proposed Full Tilt Poker class as a whole, as it allegedly denies some Class Members due legal process.

Judge Fox ruled that plaintiffs Steve Segal, Kristina Lawson, and Zayn Jetha did not qualify as fair or adequate Class representatives, as the Classes in each Full Tilt Poker RICO class action lawsuit were defined differently and are pursuing different legal claims for relief. Also, each class action lawsuit addresses different wrongful actions allegedly committed by Full Tilt and the company’s supposed partners in the alleged fraud. Based on these findings, Judge Fox denied Class certification for all three RICO class action lawsuits.

According to the Full Tilt Poker class action lawsuits:

“The named plaintiffs negotiated the proposed settlement agreement, which includes a definition of the class different from the putative class definitions in the three complaints; this shows that they failed to protect fairly and adequately the interests of the putative class members contemplated by these three actions.”

Furthermore, the judge also found that the proposed Full Tilt Poker RICO settlements deprive other potential Class Members of due process, as it only provides these individuals with injunctive relief from Full Tilt and the other defendants and does not provide these Class Members with monetary damages, damages which the lead plaintiffs of these RICO class action lawsuits claimed they were seeking when they filed their complaints.

Numerous Full Tilt Poker class action lawsuits were filed by online poker players who held “real money” accounts with Full Tilt and several other companies and entities. These plaintiffs allege Full Tilt and its partners conspired to defraud these Full Tilt Poker players and account holders by freezing their accounts, which when combined total to an alleged $150 million.

The Segal, Lawson, and Jetha RICO class action lawsuits stemmed from a federal government investigation into the online gambling website’s activities, resulting in a federal criminal lawsuit against Full Tilt by the U.S. government. This government-led Full Tilt Poker lawsuit focused on claims that Full Tilt and its competitors PokerStars and Absolute Poker engaged in money laundering, as well as bank and wire fraud.

The plaintiffs are represented by Thomas H. Burt and Patrick Donovan of Wolf Haldenstein Adler Freeman & Herz LLP, Ralph M. Stone of Stone Bonner & Rocco LLP, and Mila Bartos and James Place of Finkelstein Thompson LLP.

The Full Tilt Poker RICO Class Action Lawsuits are Lawson v. Full Tilt Poker Ltd., et al, Case No. 1:11-cv-06087; Jetha et al. v. Filco Ltd., et al., Case No. 1:11-cv-05519; and Segal, et al. v. Bitar, et al., Case No. 1:11-cv-04521; all in the U.S. District Court for the Southern District of New York.