Even though the coronavirus has silenced the crack of the bats, the United States District Court for the Southern District of New York has hit one out of the park in favor of Major League Baseball (MLB) and our hometown Houston Astros. In an opinion issued on April 3, 2020, Judge Jed S. Rakoff dismissed with prejudice a class action suit brought by five fantasy sports players against MLB, MLB Advanced Media, L.P., Houston Astros, LLC, and Boston Red Sox Baseball Club, LP.
As you may recall, in January of this year, MLB Commissioner Rob Manfred suspended for one year Houston Astros General Manager Jeff Luhnow and Manager A.J. Hinch for their roles in the sign-stealing scandal during the 2017 World Series-winning season and extending into 2018, and the Astros organization was fined $5 million and forced to give up first- and second-round picks in 2020 and 2021. The Boston Red Sox had been implicated previously in a similar scandal. As a result of these scandals, plaintiffs filed suit, alleging that they were harmed by defendants’ representations and conduct with respect to the sign-stealing scandal. They asserted claims based on fraud, negligence, unjust enrichment, and under consumer protection laws, all arising from plaintiffs’ contracts with DraftKings, Inc., a fantasy sports contest and sports betting provider. Defendants filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). The court granted the motion to dismiss. The court made these specific findings:
plaintiffs failed to allege statements made by the commissioner indicating a commitment to protect fantasy baseball from any rules violations occurring in the sport;
although plaintiffs alleged at least one plausibly false statement made by each of the defendants, such statements could not support fraud claims because plaintiffs could not show that they reasonably relied on those representations when choosing to enter the fantasy baseball contests;
plaintiffs did not identify any duty on behalf of defendants to disclose the existence of a sign-stealing plot;
plaintiffs’ negligence claim also falls short in that they failed to allege the existence of any duty owed to them by defendants or any reasonable reliance on any affirmative representations made by defendants;
plaintiffs failed to allege their consumer protection law claims with the required specificity and could not demonstrate that but for defendants’ deceptive acts, plaintiffs would not have entered the fantasy baseball contests nor was there evidence of a substantial business relationship among the parties and no allegations that defendants made any misrepresentations about fantasy baseball itself; and
there was no showing that defendants were enriched at plaintiffs’ expense.
Although our hometown hero Astros were able to eke out a no-hitter in the federal lawsuit, they nevertheless need to bring in their closer: still pending is a lawsuit filed in the Harris County District Court by a season ticket holder, alleging negligence, breach of contract, and violations of the Texas Deceptive Trade Practices Act.
Image released into public domain
No matter what you may think of our Houston Astros after the scandal, they were “Houston Strong” at a time when the city needed them most. So, today, in this time of silent bats and stadiums, let’s forget the sign-stealing scandals, the steroid abuse, and the owners’ collusion scheme in the 1980s, and remember the things we love most about the game: dollar hot dogs, that ceremonial first pitch, the team mascots (Orbit, anyone?), and of course, the camaraderie shared at being in the stands with thousands of other fans rooting for your hometown team. Play ball!
