Olson v. Major League Baseball

29 F.4th 59 *; 2022 U.S. App. LEXIS 7266 **

KRISTOPHER R. OLSON, CHRISTOPHER CLIFFORD, ERIK LIPTAK, CHRISTOPHER LOPEZ, WARREN BARBER, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, Plaintiffs-Appellants-Cross-Appellees, — v. — MAJOR LEAGUE BASEBALL, MLB ADVANCED MEDIA, L.P., Defendants-Appellees-Cross-Appellants, NEW YORK YANKEES PARTNERSHIP, Interested Party-Appellee-Cross-Appellant, BOSTON RED SOX BASEBALL CLUB, L.P., HOUSTON ASTROS, LLC, Defendants-Appellees.1

Prior History:  [**1] Plaintiffs-Appellants Kristopher R. Olson, Christopher Clifford, Erik Liptak, Christopher Lopez, and Warren Barber appeal from the judgment of the United States District Court for the Southern District of New York (Rakoff, J.), granting the motion to dismiss all claims against Major League Baseball ("MLB") entities and two teams. Plaintiffs, a putative class of fantasy sports players, assert claims for fraudulent misrepresentations and omissions, negligent misrepresentations, violations of various state consumer protection laws, and unjust enrichment. The gravamen of the lawsuit is that plaintiffs, along with a potential class of thousands of other contestants, paid to compete in fantasy baseball contests operated by non-party DraftKings Inc. ("DraftKings"), wrongly believing that they were engaging in "games of skill" based upon a fair gauge of player performance, while defendants fraudulently concealed that the player statistics were purportedly unreliable because of rule violations in the form of electronic sign-stealing by certain MLB teams during the 2017-2019 baseball seasons. Plaintiffs further allege that MLB intentionally took no action to address these rule violations in order [**2]  to protect its financial interest and investment in DraftKings.

We affirm the district court's dismissal of the First Amended Complaint and its denial of plaintiffs' motion for reconsideration. At its core, this action is nothing more than claims brought by disgruntled fantasy sports participants, unhappy with the effect that cheating in MLB games may have had on their level of success in fantasy sports contests. We hold that alleged misrepresentations or omissions by organizers and participants in major league sports about the competition itself—such as statements about performance, team strategy, or rules violations—do not give rise to plausible claims sounding in fraud or related legal theories brought by consumers of a fantasy sports competition who are utilizing a league's player statistics.

The MLB entities and the New York Yankees Partnership have filed a cross-appeal, challenging the district court's separate order, which concluded that a September 14, 2017 letter from the MLB Commissioner to the New York Yankees General Manager should be unsealed. This letter related to the results of an internal investigation, which plaintiffs allege contradicted a subsequent MLB press release [**3]  on the same subject. In light of plaintiffs' attempted use of the letter in their proposed Second Amended Complaint and the district court's discussion of the letter in explaining its decision to deny plaintiffs' request for leave to amend in their reconsideration motion, and because MLB disclosed a substantial portion of the substance of the letter in its press release about the investigation, we conclude that the district court did not abuse its discretion in unsealing the letter, subject to redacting the names of certain individuals.

Accordingly, we AFFIRM the district court's dismissal of plaintiffs' First Amended Compliant without leave to amend and the district court's denial of plaintiffs' motion for reconsideration. We also AFFIRM the district court's unsealing order.

Olson v. Major League Baseball, 447 F. Supp. 3d 174, 2020 U.S. Dist. LEXIS 99205, 2020 WL 3025280 (S.D.N.Y., June 5, 2020)Olson v. Major League Baseball, 466 F. Supp. 3d 450, 2020 U.S. Dist. LEXIS 103208, 2020 WL 3127313 (S.D.N.Y., June 12, 2020)Olson v. Major League Baseball, 447 F. Supp. 3d 159, 2020 U.S. Dist. LEXIS 59218, 2020 WL 1644611 (S.D.N.Y., Apr. 3, 2020)

CORE TERMS

contests, district court, sports, team, baseball, player, fantasy, sign-stealing, electronic, plaintiffs', statistics, misrepresentation, unsealing, reconsideration motion, judicial document, press release, allegations, public access, omissions, consumer, skill, fans, consumer protection, alleged misrepresentation, deceptive, seal, internal investigation, cross-appellants, violations, season

Civil Procedure, Appeals, Standards of Review, De Novo Review, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleadings, Complaints, Requirements for Complaint, Heightened Pleading Requirements, Fraud Claims, Abuse of Discretion, Judgments, Relief From Judgments, Altering & Amending Judgments, Motions to Reargue, Torts, Fraud & Misrepresentation, Actual Fraud, Elements, Negligent Misrepresentation, Defenses, Antitrust & Trade Law, Regulated Industries, Sports, Baseball, Trials, Jury Trials, Province of Court & Jury, Evidence, Burdens of Proof, Allocation, Consumer Protection, Deceptive & Unfair Trade Practices, State Regulation, Trade Practices & Unfair Competition, State Regulation, Scope, Contracts Law, Remedies, Equitable Relief, Quantum Meruit, Governments, Courts, Court Records, Clearly Erroneous Review, Questions of Fact & Law, Authority to Adjudicate, Inferences & Presumptions, Presumptions, Creation