Genchanok v. FanDuel, Inc. et al

Filing 23

ORDER GRANTING 10 Joint MOTION to Stay Pending JPML Determination filed by FanDuel, Inc., DraftKings, Inc. This matter is administratively closed pending the JPML's decision on consolication and transfer regarding this case. Signed by Judge Mary Ann Vial Lemmon.(cbn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ARTEM GENCHANOK,
INDIVIDUALLY AND ON BEHALF
OF ALL OTHERS SIMILARLY
SITUATED

CIVIL ACTION

VERSUS

NO: 15-5127

FANDUEL, INC., AND
DRAFTKINGS, INC.

SECTION: "S" (4)

ORDER AND REASONS
IT IS HEREBY ORDERED that the Joint Motion to Stay Proceedings Pending Judicial
Panel on Multidistrict Litigation ("JPML") Determination filed by defendants, FanDuel, Inc. and
DraftKings, Inc. (Doc. #10), is GRANTED, and this matter is STAYED AND
ADMINISTRATIVELY CLOSED pending the JPML's decision on consolidation and transfer
regarding this case and related cases pending in other United States District Courts.
BACKGROUND
The matter is before the court on a joint motion to stay filed by defendants, FanDuel, Inc.
and DraftKings, Inc. Defendants argue that this court should stay these proceedings pending a
decision of the JPML regarding the consolidation and transfer of this case and related cases pending
in other United States District Courts.
Plaintiff, Artem Genchanok, filed this putative class action on behalf of himself and all
others similarly situated, against FanDuel and DraftKings alleging that defendants violated the
Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq., state
consumer protection laws, the uniform deceptive trade practices act enacted in several states, and
the Louisiana laws of redhibition and unjust enrichment. FanDuel and DraftKings run websites on
which individuals pay an entrance fee and compete against other individuals in fantasy sports games

on a daily basis for cash prizes. Genchanok alleges that FanDuel and DraftKings deceptively
advertise their contests as fair games of skill, where, in reality, most of the winnings go to a few
individuals, some of whom use inside information to compete unfairly. Specifically, Genchanok
claims that employees of FanDuel use statistics and information they gain from their employment
to compete in contests on the DraftKings website, and vice-a-versa, creating an unfair advantage.
There are currently over thirty other similar cases pending in federal district courts around
the country. On October 15, 2015, a plaintiff in one of the cases filed a petition before the JPML
to have the daily fantasy sports cases brought before one court under the multidistrict litigation
("MDL") procedure. On October 17 and 18, 2015, two more such petitions were filed. The JPML
will likely hear these petitions on January 28, 2016.1
FanDuel and DraftKings argue that this case should be stayed pending a decision of the
JPML regarding consolidation and transfer of the related actions to conserve judicial resources and
prevent undue prejudice to them of having to answer multiple lawsuits in multiple jurisdictions
regarding the same nucleus of facts. They contend that they will file a motion to compel arbitration

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The case pending in the United States District Court for the Western District of Kentucky has been
stayed pending a decision of the JPML. Allgeier v. DraftKings, Inc., C/A No. 15-798 (W.D. Ky.). The United
States District Court for the Southern District of Illinois has denied defendants' motion to stay in one of the
cases pending in that court. Guarino v. DraftKings, Inc., C/A No. 15-1123 (S.D. Ill.). There are motions to
stay pending in three other district court cases. Gardner v. DraftKings, Inc., C/A No. 15-12320 (D. Mass.);
Haroldson v. DraftKings, Inc., C/A No. 15-13581 (D. Mass); Johnson v. FanDuel, Inc., 15-7963 (S.D.N.Y.).
In Belton v. FanDuel, Inc., C/A No. 15-8234 (S.D.N.Y), defendants filed a letter into the record stating that
they intend to file a motion to stay. In Spiegel v. FanDuel, Inc., C/A No. 15-8142 (C.D. Cal.), the court
entered an order based on the parties' stipulation that the defendants are not required to answer or otherwise
respond to the complaint until either (a) a date set by the transferee court if the matter is transferred to an
MDL or (b) 30 days after the MDL Panel issues an order denying multi-district coordination.

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in all of the actions, and this motion should be heard by one court if the matter is consolidated by
the JPML.
Genchanok opposes defendants' motion to stay arguing that, regardless of whether the case
is consolidated by the JPML, this court can handle initial pleadings and pretrial discovery matters
while the motion to transfer is pending before the JPML. Genchanok argues that he will be
prejudiced by a stay because of the delay in waiting for the JPML to rule. Further, Genchanok
argues that a stay will not serve the interest of judicial economy because the JPML may deny the
motion to consolidate, any proceedings in this action will benefit all parties because the information
gained can be shared with other plaintiffs if consolidation is ordered, and the JPML may order that
the case be heard in the United States District Court for the Eastern District of Louisiana, as
Genchanok has requested.
ANALYSIS
The district court has discretion to determine whether to temporarily stay a case pending the
JPML's decision regarding the consolidation and transfer of a matter. Landis v. N. Am. Co., 57 S.Ct.
163, 166 (1936) ("[T]he power to stay proceedings is incidental to the power inherent in every court
to control the disposition of the causes on its docket with economy of time and effort for itself, for
counsel, and for the litigants."). Although the district court is not divested of jurisdiction over a case
when there is a motion to transfer pending before the JPML, "[c]ourts frequently grant stays in cases
when a MDL decision is pending." Cajun Offshore Charters, LLC v. BP Prods. N. Am., Inc., 2010
WL 2160292, at *1 (E.D. La. 5/25/2010) (collecting cases) (citations omitted). When considering
whether to stay an action pending a JPML decision, the district court considers: (1) the potential
prejudice to the non-moving party; (2) the hardship and inequity to the moving party if the action

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is not stayed; and (3) the judicial resources that would be saved by avoiding duplicative litigation
if the cases are in fact consolidated. Id.
In this case, the defendants have demonstrated that they would be subject to hardship if the
action is not stayed, and that a stay is in the interest of judicial economy. There are over thirty
similar actions pending in the United States District Courts, and there are three motions pending
before the JPML for transfer and consolidation of these matters. The defendants would face
hardship by proceeding in all of those matters before the JPML has rendered its decision. Further,
defendants stated that they will file motions to compel arbitration in all of the related cases.2
Determining whether the plaintiffs' claims are subject to arbitration is a matter that would be more
efficiently handled by one court if the JPML determines that consolidation and transfer is warranted.
Also, such a procedure would reduce the risk of conflicting rulings regarding arbitration. Further,
plaintiff has not cited any particular prejudice that would result from a stay. Therefore, a stay of
these proceedings pending a decision of the JPML on consolidation and transfer is warranted, and
defendants' motion is GRANTED.
CONCLUSION
IT IS HEREBY ORDERED that the Joint Motion to Stay Proceedings Pending Judicial
Panel on Multidistrict Litigation ("JPML") Determination filed by defendants, FanDuel, Inc. and
DraftKings, Inc. (Doc. #10), is GRANTED, and this matter is STAYED AND
ADMINISTRATIVELY CLOSED pending the JPML's decision on consolidation and transfer
regarding this case and related cases pending in other districts.

2

Defendants have filed a motion to compel arbitration in Gardner v. DraftKings, Inc., C/A No. 1512320 (D. Mass.).

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1st
New Orleans, Louisiana, this _____ day of December, 2015.

____________________________________
MARY ANN VIAL LEMMON
UNITED STATES DISTRICT JUDGE

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