Judge sets June hearing over defendants' motion to dismiss suit against Full Tilt Poker

A federal judge has set a June hearing to hear arguments over a motion to dismiss a lawsuit that seeks to recoup gambling losses.

Individually and on behalf of others similarly situated, Judy Fahrner in January sued 26 defendants, both individuals and companies associated with Full Tilt Poker, a website that offers online poker rooms.

Fahrner claims that she and other Illinois residents invested money into the site’s poker games and then lost it all when the Department of Justice shut down the card rooms. Her suit seeks 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).

In a memorandum supporting their March motion to dismiss, two of the defendants – Erik Seidel and Tiltware LLC – assert that the suit should be dismissed because Fahrner failed to state a cause of action under the LRA and is barred from bringing this case based on a prior court-ordered settlement.

Seidel, a professional poker player from Las Vegas, and Tiltware, the software developer and licensor for Full Tilt, contend in their memo that Fahrner “invokes and misapplies an ancient and arguably anachronistic gambling loss recovery statute.”

They claim that Fahrner fails to allege elements of the cause of action under the LRA by not identifying “a single purported loser of a single quantifiable loss and a single date on which an alleged loss occurred or could have conceivably occurred.”

And even if she did allege the essential elements of her claim, Seidel and Tiltware contend that her complaint should still be dismissed as it is barred by the doctrine of res judicata.

“All of the possible ‘gambling losses’ that could have been purportedly incurred by Illinois residents on the Full Tilt Poker website have already been recovered in a prior court ordered settlement instituted by another third-party relator who shares an identity of interests with plaintiff,” the pair of defendants assert in their memo.

The prior court-ordered settlement, the memo states, came in a case brought by Cassandra Sobota in 2011 in the Cook County Circuit Court. She made similar claims under the LRA and last year, filed a motion to voluntarily dismiss her suit with prejudice.

A judge granted her motion and wrote in an order that the LRA gave Sobota standing to initiate civil action on behalf of all persons who suffered gambling losses of $50 or more if they failed to pursue their remedy under the LRA within six months, but that she then failed to do so within six months.

The order also barred any and all future claims under the LRA against the defendants, the majority of whom are named in Fahrner’s suit, pursuant to the settlement in Sobota’s case.

Pointing to Sobota’s case, the defendants assert that “traditional qui tam principles would foreclosure a subsequent recovery for the same losses by plaintiff in this case. [Fahrner] cannot duplicate the recovery Sobota already claimed.”

Fahrner, the defendants argue, tries to get around this hurdle by claiming that there have been additional gambling losses since 2012 that no one has recouped. That claim is “absurd” and “wholly unsubstantiated," they assert.

In response to these two defendants’ request for a hearing on their motion to dismiss, U.S. District Judge Michael Reagan last month set a June 14 hearing. Since then, some of the defendants have filed their own motions to dismiss and requests for hearings.

Court records show that Reagan also scheduled the case for a final pre-trial conference in October 2014 and a jury trial in November 2014.

Belleville attorneys William J. Niehoff and Laura Schrick, along with Washington D.C. attorneys A. Jeff Ifrah, David Deitch and Rachel Hirsch, filed the memo and motion to dismiss on behalf of Seidel and Tiltware.

Belleville attorney Lloyd M. Cueto filed the complaint on Fahrner’s behalf.