Baseball Fans’ And DFS Players’ Lawsuit Against Astros, Red Sox Ruled To Be Just A Fantasy

A federal judge on Friday dismissed a class action lawsuit brought by baseball fans and daily fantasy sports players from five states who claimed fraud on the part of Major League Baseball and its partners based on alleged “sign stealing” by the Houston Astros and Boston Red Sox between 2017 and 2019.

Judge Jed Rakoff of the Southern District of New York — an unabashed Yankees fan — could not resist rhetorical flair in his ruling, opening his 32-page legal Opinion with this:

“A sport that celebrates ‘stealing,’ even if only of a base, may not provide the perfect encouragement to scrupulous play. Nor can it be denied that an overweening desire to win may sometimes lead our heroes to employ forbidden substances on their (spit)balls, their (corked) bats, or even their (steroid-consuming) selves. But as Frank Sinatra famously said to Grace Kelly (in the1956 movie musical High Society), “there are rules about such things.”

The footnote to the latter quote reads: “Frank was referring, of course, to a different kind of sport. The words were first uttered by Van Heflin to Katherine Hepburn in the play The Philadelphia Story (1939) by Philip Barry, and then repeated by Jimmy Stewart to Katherine Hepburn in the 1940 movie version of the same name.”

The heart of the matter

Rakoff then moves on to the core of the case:

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“One of these rules forbids the use of electronic devices in aid of the players’ inevitable efforts to steal the opposing catcher’s signs. In 2017 and thereafter, the Houston Astros, and somewhat less blatantly the Boston Red Sox, shamelessly broke that rule, and thereby broke the hearts of all true baseball fans. But did the initial efforts of those teams, and supposedly of Major League Baseball itself, to conceal these foul deeds from the simple sports bettors who wagered on fantasy baseball create a cognizable legal claim? On the allegations here made, the answer is no.”

The fans’ lawsuit notes that MLB Advanced Media acquired an equity stake in 2013 in DraftKings, the daily fantasy sports giant whose games the plaintiffs played.

“The thrust of plaintiffs’ complaint is that defendants were aware of sign stealing by the Astros and Red Sox, but intentionally took no action to stop it in order to protect their financial interest and investment in DraftKings,” Rakoff writes.

“Furthermore, the complaint alleges that defendants made various false statements and omissions designed to conceal the fact of the sign stealing in order to deceive plaintiffs into believing that the MLB DFS competitions were a game of skill based on fair and legitimate player performance statistics.

“Such deception was ultimately intended to induce plaintiffs and other DraftKings players to play MLB DFS, which they would not have done had they ‘known that the honesty of the player performance statistics on which [their] wagers were based and the results of [their] wagers were determined was compromised by MLB teams’ and players’ electronic sign stealing.’”

The allegedly false statements were made by MLB Commissioner Rob Manfred as well as Astros and Red Sox players and officials.

But Rakoff concluded that “None of these statements plausibly indicates defendants’ commitment to safeguarding fantasy baseball from MLB rules violations.”

Consolation prize

The judge does throw the losing plaintiffs a bone:

“The complaint does ultimately allege a few particularized statements made by each defendant that are plausibly false. First, the plaintiffs plausibly allege that Astros President of Baseball Operations and General Manager, Jeff Luhnow, and Astros Field Manager A.J. Hinch made false statements when they denied that the Astros were involved in any sign stealing, even though, according to the complaint, both managers knew of the sign stealing at the time they made these statements.”

But Rakoff added that no evidence was presented that the suing fans “saw, read, or otherwise noticed” any misrepresentations by the teams.

The fans also struck out on a claim that MLB had a duty to disclose the existence of sign stealing when it occurred. Rakoff cites three federal cases where sports organizations have been found not to owe its fans such disclosures — one the Floyd Mayweather-Manny Pacquiao fight, another in “Mayer v. Belichick,” and a third in “Bowers v. Federation Internationale de l’Automobile.”

One last claim by the fans also was brushed back by the judge:

“Plaintiffs’ unjust enrichment claims fail because the plaintiffs have failed to plausibly allege that the defendants were enriched at plaintiffs’ expense.”

Rakoff concluded by saying that “the connection between the alleged harm plaintiffs suffered and defendants’ conduct is simply too attenuated to support any of plaintiffs’ claims for relief. While the verbose, rhetorical, and largely conclusory complaint does manage to plausibly allege a few misrepresentations by defendants, these statements, which are unrelated to fantasy baseball, do not plausibly support plaintiffs’ claims of reliance.”

Photo by Brian Fluharty / USA Today Sports

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