DraftKings, FanDuel Class Action Lawsuits Consider Venue Requests

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Last week, the Judicial Panel on Multidistrict Litigation considered requests from various plaintiffs and defendants in the class action lawsuits that allege the fan betting sports sites DraftKings and FanDuel engaged in insider trading, deceptive marketing, illegal gambling and a variety of other claims, to consolidate the cases and venue requests for the actions.

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.

Last week, 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.

Additionally, various plaintiffs argued against consolidation of the FanDuel and DraftKings class action lawsuits. These parties pointed out that the claims in each of the lawsuits are not identical, for example, some allege insider trading, while others allege deceptive marketing and illegal gambling. As an alternative, the plaintiffs suggested coordinating the lawsuits under a single judge.

Various plaintiffs pointed out that their claims may be delayed by investigations into other lawsuits’ claims that are not related to their action. One plaintiff alleging insider trading pointed out that investigation into potential illegal gambling operations would likely delay resolution of their claims.

Allegations arising from New Mexico and Florida state statutes that confer standing to the claimants in their class actions as citizens concerned about gambling were opposed by the plaintiffs in those action. The argue that their claims should not be consolidated with those who engaged in the allegedly illegal gambling because they never participated in the contests.

A representative for the New Mexico and Florida plaintiffs stated that “We don’t want to get dragged down in the procedural morass and delay.” “Whether it’s legal or illegal doesn’t affect our cases,” he pointed out.

Plaintiffs in support of consolidation argued that because all the plaintiffs in the class action lawsuits are primarily asking for refunds from Draft Kings and FanDuel, it shouldn’t matter that the claims differ. These plaintiffs pointed out that problems may arise if the plaintiffs in one group settle with the companies and release them from liability in one case while other cases are still pending.

Regarding venue requests where the class actions, either consolidated or not, will be held, some representatives pointed out that because both DraftKings and FanDuel have small staffs who will need to be involved in the litigation and both companies are in Massachusetts, the claims should be held there.

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 DraftKings, FanDuel Class Action Lawsuits are In re: Daily Fantasy Sports Marketing and Sales Practices Litigation, MDL No. 2677, In re: DraftKings Inc. Fantasy Sports Litigation, MDL No. 2678 and In re: FanDuel Inc. Fantasy Sports Litigation, MDL No. 2679, in the Judicial Panel on Multidistrict Litigation.

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

UPDATE 2: 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 3: 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.