One of the defendants in a class action suit over gambling losses contends the plaintiff is trying “to use discovery as a fishing expedition.”
Rational FT Enterprises Ltd. made this claim this week in a reply to Judy Fahrner’s response to its July 19 motion for a protective order to stay discovery until the resolution of its April motion to dismiss or in the alternative, for a period of four months.
A hearing on this motion is set for 10 a.m. Friday via telephone conference before U.S. Magistrate Judge Stephen Williams.
The company asserts that the purpose of its most recent motion for a protective order is to provide “absolute clarity” on Williams’ June 17 order that stayed class action discovery in the suit.
In that order, Williams wrote that “The pending dispositive motions concern threshold questions with narrow issues that require no further fact discovery, and Defendants would be prejudiced if they engaged in voluminous unnecessary discovery only to have their dispositive motions prove meritorious.”
Despite the judge’s order, Rational FT claims that Fahrner “continues to propound burdensome and unnecessary discovery requests … regarding issues that this Court already deemed irrelevant for purposes of determining Rational FT’s pending motion to dismiss, or in the alternative, for summary judgment.”
In January, Fahrner filed a class action suit against more than two dozen individuals and companies associated with Full Tilt Poker, a website that offers online poker rooms.
She claims that she and other Illinois residents lost money they invested into the Full Tilt Poker’s poker games when the Department of Justice shut down the card rooms in 2011.
Her suit requests class action status to recover gambling losses and up to three times the amount of losses in damages under the Illinois Loss Recovery Act (LRA).
The LRA provides that “any person who by gambling shall lose to any other person, any sum or money or thing of value, amounting to the sum of $50 or more …may sue for and recover the money or thing of value, so lost and paid or delivered, in a civil action against the winner thereof, with costs, in the circuit court.”
The statute further states that if a person entitled by the LRA to initiate such an action doesn’t do so within six months, “any person may initiate a civil action against the winner.”
The defendants, however, in their May motion seeking to halt class action discovery argued that Fahrner’s claim for relief can’t proceed as a class action because the LRA doesn’t provide for class action recovery for third-parties seeking to recover losses sustained by others.
In its July 19 motion for a protective order, RT Enterprises asserts that in this case, “there is little distinction between class action discovery and the other types of discovery sought by Plaintiff, thereby making it difficult to seek the latter without violating the existing stay order.”
“As such,” the company adds, “ample good cause exists for this Court to enter a new order staying all discovery in this case, if not for the pendency of the motion to dismiss, then at least for a four-month period.”
Rational FT further asserts that a stay of all discovery “would not interrupt the proceedings in any significant way” given that the matter has been set for a March 2015 trial date.
In her response to the defendant’s motion for a protective order, Fahrner contends that “Judge Williams was clear that the order did not stay all discovery and any dispute between parties as the applicability of the order should be addressed through the normal discovery dispute procedures.”
“Nevertheless,” Fahrner claims that “Rational FT ignored the Court’s instruction and filed” a motion for a protective order seeking to stay all discovery, which she contends should be denied and that the discovery she requested “should be responded to completely.”
Fahrner asserts in her response that the parties participated in several, lengthy meetings with each other to try to resolve their disputes without the involvement of the court, but that they proved to be unsuccessful “as the defendants held on to the position that all discovery should be stayed.”
“In these meet and confers, Defendant’s offers at compromise were bizarre and illustrate why their objections to discovery should fail,” Fahrner contends.
One example of this, Fahrner claims, deals with her request to take a deposition on the corporation structure of Rational FT, which in response stated it would produce a witness for plaintiff’s counsel to talk to “informally” on the issue.
“Similarly, the Defendants stated it would be burdensome to produce certain gaming records, yet then stated they would comply if Rational FT was voluntarily dismissed from the case and be served with a third-party subpoena,” Fahrner contends.
Saying that Rational FT has failed to prove that the discovery sought would be burdensome, Fahrner further asserts that “discovery is crucial” for her case and “to adequately address issues such as jurisdiction raised by the defendant.”
While Rational FT claims that Fahrner’s request for gaming records highlights a “significant overlap between class action discovery and merits discovery,” Fahrner contends that she is entitled to such records during the pendency of the motion to dismiss in order to demonstrate jurisdiction over the company.
Rational FT claims that the court does not have jurisdiction over it because it did not exist before June 2012, “at a time when the Full Tilt Poker brand had long ceased real-money play operations in the U.S.”
“Thus, any conceivable gambling losses sustained by Illinois residents would have preceded Rational FT’s incorporation,” the company asserts, noting that it didn’t begin to operate the Full Tilt Poker site until August 2012, after it acquired some of Full Tilt Poker’s assets forfeited by the U.S. government under a settlement agreement.
Belleville attorneys William J. Niehoff and Laura E. Schrick, as well as Washington D.C. attorneys A. Jeff Ifrah, Rachel Hirsch and David B. Deitch, represent Rational FT and a few other defendants.
Several other attorneys, including Michael Hermann and Charles J. Swartwout in Belleville, represent some of the remaining defendants.
Belleville attorneys Lloyd M. Cueto, Christopher Cueto and Michael Gras represent Fahrner