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MLB, Astros, Red Sox respond to DraftKings lawsuit over sign stealing

It’s motion to dismiss time.

Did not age well

As baseball’s electronic sign-stealing case joins the long list of sports-related court cases, attorneys for the the Astros, Red Sox and Major League Baseball all say that while fantasy sports bettors may be angered by rules violations, that doesn’t mean they’re entitled to monetary damages as a result of cheating.

All three parties filed responses late last week in a proposed class action case filed in a New York City federal court against the two teams and MLB over purported damages resulting from the 2017-18 sign-stealing scandal.

The two cases filed in New York have effectively been rolled into one case as bettors have joined forces against the MLB entities.

All three responses to the lawsuit filed by DraftKings customers cite court decisions in such past brouhahas as the New England Patriots’ “Spygate” case in 2010, boxer Mike Tyson’s ear-biting assault upon Evander Holyfield in 1997 and the New Orleans Saints’ “Bountygate” scandal of 2009-11 in asking U.S. District Judge Jed S. Rakoff to dismiss this case.
“Every court that has been faced with similar claims by disappointed fans … has soundly rejected such a claim recognizing that these types of issues are best resolved on the field and not in the courtroom,” attorneys for MLB wrote. “The same result should obtain here.”

In similar fashion, attorneys for the Astros wrote that fans “have no express or implied right to an event free of penalties, undisclosed injuries, rules violations, cheating or similar conduct. … There is no legal claim for a violation of a sports league’s internal rules.”

See here for the background, and here for more sign-stealing-lawsuit stuff. A copy of the Astros’ motion to dismiss is in the story. I don’t have anything to add to this, but if you’d like to hear an actual lawyer give real lawyer-like opinions and analysis of the various sign-stealing lawsuits and their merits, I recommend you listen to this episode of Effectively Wild, which will give you a firm footing on the subject. Courthouse News and the Associated Press have more.

More Astros lawsuits

This one was filed by a dissatisfied customer.

Did not age well

An Astros season ticket holder has filed suit in Harris County District Court against the ballclub, accusing the team of negligence, breach of contract and violations of the Texas Deceptive Trade Practices Act in conjunction with the 2017-18 electronic sign-stealing scandal.

The suit, filed Friday by Beaumont attorneys Mitchell A. Toups and Richard L. Coffman on behalf of season ticket holder Adam Wallach of Humble, seeks class action status for Astros full and partial season-ticket holders from 2017 through 2020 and damages in excess of a million dollars.

The Astros are accused of “deceptively overcharging (fans) for season tickets while defendants and their employees and representative knowingly and surreptitiously engaged in a sign stealing scheme … and secretly put a deficient product on the field that could result (and now has resulted) in severe penalties” from Major League Baseball.

As a result of the scheme, the lawsuit claims, season ticket holders are owed refunds of what attorneys say were inappropriate increases in ticket prices for the last four seasons. The suit also seeks treble damages for the Astros’ “knowing, willful, intentional, surreptitious, wrongful and unconscionable conduct.”

In addition, attorneys seek an order that would prevent the Astros from increasing season ticket prices for at least two years.

There were already two other lawsuits against the Astros over the whole sign stealing thing; this story notes yet another, a hand-written (!) lawsuit from a guy in Nevada who lost money in both 2017 and 2018 betting on the Dodgers to win the World Series. The day will come when this sort of story will end, but today is not that day. I Am Not A Lawyer, and I have my doubts that this will survive a motion to dismiss, but the Chron asked some actual lawyers, and maybe it can.

With three potential class action lawsuits pending against the Astros in Harris County courts, the scene is set for what attorneys say is a multi-layered, landmark legal battle that could test the wits and knowledge of lawyers, judges and jurors and perhaps extend beyond information disclosed in Major League Baseball’s report.

“This is a complicated mess,” said Talmage Boston, a Dallas attorney who has written two books on baseball’s history and is a member of the Texas Baseball Hall of Fame. “We have never seen anything like this before. There will be nothing easy about this case.”

Two additional lawsuits were filed against the ballclub Tuesday, bringing to at least seven the number of cases in state and federal court stemming from the electronic sign-stealing scheme in 2017-18 that resulted in Major League Baseball sanctions against the ballclub.

In the two latest suits, filed by the Hilliard Martinez Gonzales law firm in Corpus Christi, attorneys will seek authority to collect testimony that could go beyond details collected by the MLB probe that led to the firing of Astros manager A.J. Hinch and general manager Jeff Luhnow by team owner Jim Crane.

John Duff, an associate with the Hilliard firm, said attorneys for the ticket holders will attempt to question not only current and former Astros players and management but also MLB executives and players and managers from other teams, extending the boundaries of the MLB probe.

[…]

Sports-related lawsuits are not uncommon, with examples including the NFL’s “Spygate” affair with the New England Patriots and cases filed by disgruntled New Orleans Saints fans over officiating decisions that affected playoff games.

None of those cases proceeded to trial. Boston, however, said he believes the three Harris County cases, each of which seeks to represent season ticket holders who say they were defrauded by the Astros’ misdeeds, have a chance to proceed.

“The Astros will try to get them dismissed, but I think they will get teed up in front of a jury,” Boston said. “There are some compelling facts, and the evidence discovery will go deeper than anything we know in terms of what (MLB commissioner Rob Manfred) had in his investigation.

“It really is a can of worms.”

So who knows what might happen. Each case is in a different court, and there may be an effort to move them to federal court, which the plaintiffs will resist. I still have my doubts, but it sure would be interesting to see what the discovery process might uncover.

Lawsuit filed over sign stealing effect on fantasy baseball

This ought to be interesting.

Major League Baseball (MLB) teams secretly distorted player statistics and deprived fans of an “honest fantasy baseball competition,” a lawsuit filed by a fan alleges in the fallout to a sign-stealing scandal involving the Houston Astros and the Boston Red Sox.

The lawsuit, which named MLB, the Houston Astros and the Boston Red Sox as defendants, was filed in a Manhattan federal court on behalf of all fans who participated in DraftKings’ fantasy baseball contests, which plaintiff Kristopher Olson claimed were tainted by the sign-stealing scandal.

“At the very least, all of DraftKings’ fantasy baseball contests from early in the 2017 baseball season through the end of the 2018 regular season and into the 2019 season, were tainted by cheating and compromised, at the expense of DraftKings’ contestants,” according to the filing on Thursday.

DraftKings’ fantasy sports and betting operations are big business; it said in December it would go public this year in a deal putting its value at $3.3 billion.

The complaint claimed MLB has actively promoted fantasy baseball competition through its equity stake in fantasy sports and gambling company DraftKings.

CBS News and ClassAction.org have more details about the lawsuit if you want a deeper dive. I don’t play fantasy sports, but the basic idea is you draft a team, you designate which players “start” in a given game that is actually being played, and you get points based on the statistical performance of your players in those games. The idea here is that pitchers on fantasy teams who were designated to start against the Astros did worse than they would have because of the sign stealing, and since MLB knew about the sign stealing and didn’t do anything about it at the time, while they were also promoting and profiting from fantasy baseball, they were essentially defrauding the fantasy team owners. It seems a bit of a stretch to me, but there’s real money at stake. It’s also pretty clear that there’s more to the sign stealing story than what has been made public so far, and if this suit is allowed to proceed there’s a good chance we’ll learn a lot more about what really happened. So I’m very interested to see what happens.

House passes bill to legalize fantasy sports

Hey, what do you know?

The Texas House gave an initial stamp of approval Wednesday to a bill that would classify fantasy sports as games of skill, not of chance, that are therefore legal.

House Bill 2303 by state Rep. Joe Moody, D-El Paso, passed the chamber on a 116-27 vote. It still needs another vote from the House before it can be sent to the Senate for consideration. (Update, May 2: The House voted to give the measure final approval.)

Fantasy sports allows fans to draft real players from various sporting leagues to create a fictional team. The players’ real-time statistics are then compiled, and the team with the highest overall ranking wins. Fans can track their teams through websites or apps.

While critics say fantasy sports sites are hubs for illegal online gambling, others contend the games are based on skill and are therefore legitimate. Lawmakers have filed similar measures in the past, but to no avail.

Attorney General Ken Paxton issued a nonbinding opinion in January 2016 equating fantasy sports sites to online gambling, which is illegal.

“House Bill 2303 simply seeks to clarify state law and confirm that skill-based fantasy sports are legal and therefore not an act of gambling,” Moody said. “It’s very similar to what 19 other states in the country have done in recent years, and the United States Congress made this change in 2006.”

See here for the background. I hadn’t heard anything about this effort before this story was published, so it kind of came out of nowhere for me. Tiem is running down for bills to be heard in the Senate, and I have no idea where this is on the priority list. The odds always favor bills not getting passed. I’ll keep an eye on it.

Paxton opines against daily fantasy sports sites

I feel confident saying this will be tested in court.

While placing bets on fantasy sports sites might involve skill, there is still an element of chance that equates such leagues with illegal gambling in Texas, Attorney General Ken Paxton said in a nonbinding opinion released Tuesday.

The “odds are favorable that a court would conclude that participation in paid daily fantasy sports leagues constitutes illegal gambling,” Paxton said in the nine-page opinion. But “participation in traditional fantasy sport leagues that occurs in a private place where no person receives any economic benefit other than personal winnings and the risks of winning or losing are the same for all participants does not involve illegal gambling.”

In November, state Rep. Myra Crownover, R-Denton, asked the attorney general to weigh in on whether fantasy sports sites such as DraftKings.com and FanDuel.com were legal in Texas. The request came days after New York’s attorney general declared such sites to be illegal gambling.

[…]

In a statement Tuesday, Crownover said she requested the opinion to clarify the law on fantasy sports sites. “It is our responsibility to try to make sure no business is profiting from illegal activity in Texas.”

As you might imagine, the sites were none too happy about this.

Daily fantasy sports site DraftKings said it intended to keep operating in Texas, disagreeing with Paxton’s interpretation of the law and his description of how the games work.

“The Texas Legislature has expressly authorized games of skill, and daily fantasy sports are a game of skill,” said a statement by Randy Mastro, counsel to DraftKings.

“The Attorney General’s prediction is predicated on a fundamental misunderstanding of [daily fantasy sports]. We intend to continue to operate openly and transparently in Texas, so that the millions of Texans who are fantasy sports fans can continue to enjoy the contests they love,” said Mastro, who disputed the description of an entry fee as a cut.

[…]

Dallas Mavericks owner Mark Cuban has invested in Fantasy Labs Inc., a platform of proprietary daily fantasy sports data, tools and analytics. He slammed Paxton’s legal opinion on Twitter, calling it “a disappointment.”

“You certainly don’t represent the views of Texans,” tweeted Cuban, who is due to keynote the Fantasy Sports Trade Association’s Winter Conference in Dallas on Wednesday.

Paxton’s opinion came despite a flood of emails to his office supporting the games. His office received 18,429 emails and 339 calls, the majority of them in favor of the games, a spokeswoman said Tuesday.

I would agree that there is skill involved in playing fantasy sports, at least if one wants to be any good at it, but one could also argue there’s skill involved in horse racing or playing blackjack. There’s obviously a big element of luck involved as well, so where does one draw the distinction? I have zero interest in these daily fantasy game sites, so I’m not qualified to say where that line is, but it’s clearly subjective. I look forward to the inevitable lawsuit.

One more point of interest, from the DMN last week.

When news broke that Texas lottery officials were looking into fantasy sports and casino games in other states late last year, the lottery agency said its exploratory trips were no big deal. Just a fact-finding mission to gather information for lawmakers, a spokeswoman said.

What the agency didn’t say was that for months, Texas Lottery Commission Executive Director Gary Grief had been aggressively working to get in on the billions of dollars flowing into fantasy sports. His efforts came as the games became the focus of legal questions around the country — and despite conservative state leaders’ long-standing aversion to any expansion of gambling here.

More than 400 pages of emails, obtained by The Dallas Morning News under Texas public records laws, directly contradict the agency’s contention that it was only considering traditional lottery draw and scratch-off games. The records include discussions with fantasy sports lobbyists and show that Grief wanted a contract with DraftKings, one of two companies at the center of a national controversy over the games.

He prodded his staff to quickly nail down a plan to get Texas in on the action. And when an insider betting scandal erupted in the industry, Grief embarked on a plan to bring the games — which some consider an illegal form of gambling — under the lottery commission’s umbrella.

Winston Krause, chairman of the five-member Lottery Commission, said that Grief explored the issue at the behest of a lawmaker whose name he couldn’t recall. When Gov. Greg Abbott learned from a News report that Grief and agency staffers had traveled to Delaware to investigate its sports betting operations, he ordered the commission to end its dalliance. Suddenly, Krause said, the lawmaker lost interest.

“The bottom line is, no one in that organization wants to expand the footprint of gambling in Texas. Nobody,” Krause said.

Lottery Commission spokeswoman Kelly Cripe declined repeatedly to elaborate. Grief, in a written statement, said the agency has stopped its efforts. He declined multiple requests for an interview, and the agency has challenged The News’ requests for additional documents on the matter.

Nothing at all curious about that. Who can keep track of all these legislators, anyway? Read the whole thing. This was separate from the request for Paxton’s opinion, but it’s definitely relevant. ESPN, Trail Blazers, Texas Monthly, and the Press have more.