MLB Seeks to Toss DraftKings Suits, Says Fans Know Players Cheat

Everyone knows that professional athletes cheat. That’s the defense Major League Baseball offered while asking the Southern District of New York to dismiss proposed class action claims by DraftKings fantasy baseball contestants over the sign-stealing scandal involving the Houston Astros and Boston Red Sox.

The DraftKings participants’ claims fail because fans were on notice “that players often commit intentional rule infractions in order to obtain an advantage over the course of the game,” the league said, quoting a 2010 Third Circuit ruling on the New England Patriots sign-stealing case.

The fans can’t deny they were aware of the possibility of cheating given that the clubs were publicly disciplined for electronic sign-stealing violations during the 2017 regular season, the league said.

Despite being on notice, the plaintiffs continued to participate in DraftKings contests, and can’t plausibly claim they were deceived into believing that rules violations would never occur, MLB said.

The Red Sox, in a separate memoradum in support of motion to dismiss, echoed the league’s argument, saying similar accusations of sign-stealing were publicly-reported three times during the class period in 2017 and 2018.

That the plaintiffs still participated in fantasy baseball contests “flatly refutes any assertion that their participation was premised on any assumption about the purported immunity of player performance metrics from any MLB rule violations,” the Red Sox said.

The Astros, in their own memorandum, said the plaintiffs failed to show that the Astros caused them injury.

Although the plaintiffs assert that the Astros’ rule violations resulted in “distorted” player statistics, they don’t allege that any player statistics, or the DraftKings salary algorithm, were inaccurate, the Atros argued.

Nor do they show that the Astros intended to deceive any DraftKings user or that they relied on any false statement or omission to their detriment, the Astros said.

Two sets of plaintiffs filed proposed class actions on behalf of DraftKings participants against the MLB and the teams, alleging they wrongfully promoted fantasy baseball wagering competitions that they “caused to be, and knew or should have known were, corrupt and dishonest.”

Following media reports, an MLB investigation concluded that during the 2017 and 2018 seasons, the Astros illegally used a camera system to steal signs. A player or staff member would convey the upcoming pitch to the batter by banging on a trash can. The Red Sox are under investigation by MLB for allegations of similar conduct during the 2018 season.

Silver Golub & Teitell LLP represents the Olson plaintiffs. Radice Law Firm PC represents the Clifford plaintiffs.

Sullivan & Cromwell LLP represents the MLB. Vinson & Elkins LLP represents the Astros. Cravath, Swaine & Moore LLP represents the Red Sox.

The cases are Olson v. Major League Baseball, S.D.N.Y., No. 20-cv-00632, 2/21/20, Clifford v. Major League Baseball, S.D.N.Y., No. 20-cv-01000, 2/21/20.