Cody Spiegel et al v. DraftKings, Inc. et al

Filing 15

ORDER TO SHOW CAUSE RE: SUBJECT MATTER JURISDICTION by Judge Beverly Reid O'Connell. The Court ORDERS Plaintiffs to show cause as to why this case should not be dismissed for lack of subject matter jurisdiction. Plaintiffs shall respond by Monday, November 16, 2015, at 4:00 p.m. (rfi)

LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 15-08142 -BRO (RAOx)

Title

CODY SPIEGEL, ET AL. V. FANDUEL, INC., ET AL.

Date

November 10, 2015

Present: The Honorable

BEVERLY REID O’CONNELL, United States District Judge

Renee A. Fisher

Not Present

N/A

Deputy Clerk

Court Reporter

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

(IN CHAMBERS)

ORDER TO SHOW CAUSE RE: SUBJECT MATTER
JURISDICTION
On October 20, 2015, Plaintiffs Cody Spiegel and Curry Conway (“Plaintiffs”), on
behalf of themselves and others similarly situated, filed a class action lawsuit against
Defendants FanDuel, Inc. and Draft Kings, Inc. (“Defendant”). (Dkt. No. 1.) Plaintiffs
seek to represent two classes: (1) “[a]ll individuals or entities who played [daily fantasy
sports] on Defendants’ websites during the class period”; and, (2) “[a]ll persons in the
United States who deposited money into a DraftKings or FanDuel account before
October 6, 2015[,] and competed in any contest where other entries were made by
employees from DraftKings, FanDuel[,] or any other [daily fantasy sports] site.” (Compl.
¶¶ 62, 72.) The Complaint alleges only state law claims, which are as follows: (1)
negligence; (2) false advertising, under California Business and Professions Code section
17500 et seq.; and, (3) violation of the unfair competition law, pursuant to California
Business and Professions Code section 17200 et seq. (Compl. ¶¶ 77–96.)  
A federal court must determine its own jurisdiction, even where there is no
objection. Rains v. Criterion Sys., Inc., 80 F.3d 339, 342 (9th Cir. 1996). Because
federal courts are of limited jurisdiction, they possess original jurisdiction only as
authorized by the Constitution and federal statute. See Kokkonen v. Guardian Life Ins.
Co. of Am., 511 U.S. 375, 377 (1994). In their Complaint, Plaintiffs state that the Court
has subject matter jurisdiction in this case because “a substantial number of the events

CV-90 (06/04)

CIVIL MINUTES – GENERAL

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 15-08142 -BRO (RAOx)

Title

CODY SPIEGEL, ET AL. V. FANDUEL, INC., ET AL.

Date

November 10, 2015

giving rise to the complaint occurred in California.” (Compl. ¶ 18.) Plaintiff appears to
confuse the standards governing subject matter jurisdiction and venue.1
Original jurisdiction may be established under 28 U.S.C. § 1331 so long as the
“civil action[] aris[es] under the Constitution, laws, or treaties of the United States.” 28
U.S.C. § 1331. However, given that all of Plaintiffs’ causes of action arise under state
law, it cannot invoke § 1331 to establish subject matter jurisdiction. In class action cases
where the claims arise under state law, the Class Action Fairness Act (“CAFA”) applies.
See 28 U.S.C. § 1332(d). Under CAFA, a federal district court has jurisdiction over a
civil class action in which the class is made up of more than 100 members, has minimum
diversity and in which the amount in controversy exceeds $5,000,000. 28 U.S.C.
§ 1332(d)(2).
While Plaintiffs do not directly invoke CAFA as the jurisdictional basis for their
class action, it appears they must meet CAFA’s requirements to invoke this Court’s
jurisdiction. As pleaded, however, it is unclear whether Plaintiffs meet CAFA’s
requirements. Namely, Plaintiffs fail to specify whether the class includes more than 100
members and whether the amount in controversy exceeds $5,000,000.2
Accordingly, the Court ORDERS Plaintiffs to show cause as to why this case
should not be dismissed for lack of subject matter jurisdiction. Plaintiffs shall respond by
Monday, November 16, 2015, at 4:00 p.m.
:

IT IS SO ORDERED.
Initials of Preparer

Rf

1

Under 28 U.S.C. § 1391(b)(2), venue is proper in “a judicial district in which a substantial part of the
events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject
of the action is situated.” 28 U.S.C. § 1391(b)(2).
2

The Court notes that Plaintiffs satisfy the minimum diversity requirement because Plaintiffs are
citizens of California, a state of which neither Defendant is a citizen. (Compl. ¶¶ 14–17.)   
CV-90 (06/04)

CIVIL MINUTES – GENERAL

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