DraftKings, FanDuel Class Action Lawsuits May Be Consolidated in NY

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Last week, a plaintiff in one of the 11 class action lawsuits alleging that online sports betting companies FanDuel and Draft Kings unfairly tricked consumers into one sided contests designed to make only an elite few win filed a petition with the U.S. Judicial Panel on Multidistrict Litigation to consolidate the cases.

Plaintiff Aissa Khirani contends in her petition that the fantasy sports class action lawsuits should be consolidated in the Southern District of New York. Khirani argues that there are a number of common facts and questions to the 11 class action lawsuits filed against FanDuel Inc. and DraftKings Inc., and that discovery has not started in any of the lawsuits.

“Without transfer, coordination, and consolidation of the actions, the significant hazard of inconsistent rulings exists, along with judicial inefficiency, overlapping discovery, and unnecessary expense,” Khirani says in the motion urging consolidation of the fantasy sports class action lawsuits. “Both defendants’ respective conduct and liabilities are so similar that most of the actions commenced against these defendants have named both in their captions.”

According to the petition with the the U.S. Judicial Panel on Multidistrict Litigation, the class action lawsuits should be consolidated in the Southern District of New York because FanDuel is based in New York and DraftKings, while based in Boston, also has an active office in Manhattan in New York. The plaintiff also pointed out that a majority of the class action lawsuits were filed in the Southern District of New York already.

Judge George B. Daniels should be assigned to the consolidated class action litigation, Khirani informed the panel. Judge Daniels is an appropriate choice because he is currently presiding over one of the FanDuel/DraftKings class action lawsuits, Khirani says. Additionally, Judge Daniels has extensive experience with multidistrict litigation, particularly with a widely known case about the September 11th terrorist attacks, In re: Terrorist Attacks on Sept. 11, 2001.

Th class action lawsuits filed against FanDuel and DraftKings stem from allegations that the sports betting companies’ employees were secretly using insider information, company algorithms, and other information to tip the scales in their favor while playing fantasy football in their rival’s sites.

The allegations surfaced in early October, when Adam Johnson filed the first of the 11 class action lawsuits. According to the fantasy sports lawsuits, the companies’ internal policies and marketing practices allowed employees to use internal information and data to skew the odds in their favor allowing their employees to win millions of dollars against regular users over the course of the season.

Additionally, according to the fantasy sports class action lawsuits, DraftKings and FanDuel both had the ability to track and prohibit their employees from these activities and had actual knowledge that this was happening.

Khirani is represented by Hunter J. Shkolnik of Napoli Shkolnik PLLC.

The consolidated DraftKings/FanDuel Class Action Lawsuits are In Re: DraftKings Inc. Fantasy Sports Litigation, Case No. 2678, and In Re: FanDuel Inc. Fantasy Sports Litigation, Case No. 2679, in the U.S. Judicial Panel on Multidistrict Litigation.

UPDATE: On Jan. 28, 2016, the Judicial Panel on Multidistrict Litigation considered requests from various plaintiffs and defendants in the class action lawsuits to consolidate the cases and venue requests for the actions.

UPDATE 2: On Feb. 4, 2016, the Judicial Panel on Multidistrict Litigation agreed to transfer the DraftKings and FanDuel lawsuits into a Massachusetts federal court.