Judge stays discovery in Full Tilt Poker case

A federal judge on Monday granted the defendants’ motion for a stay of discovery in a class action suit over gambling losses.

Some of the defendants– more than two dozen individuals and companies associated with Full Tilt Poker, a website that offers online poker rooms— in May asked a judge for a protective order against class action discovery and in the alternative, for a stay of discovery.

While U.S. Magistrate Judge Stephen Williams denied the defendants’ request for a protective order in his three-page order, he granted their motion for a stay, saying it would be appropriate until their pending motions to dismiss are resolved.

“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,” Williams wrote.

Noting that the trial in this case is not scheduled to begin until March 2015, nearly two years from now, Williams added that “a short stay in discovery will not prejudice Plaintiff’s ability to prosecute her case, should she prevail on Defendants’ dispositive motions.”

In January, plaintiff Judy Fahrner filed a class action suit that claims she and other Illinois residents invested money into the Full Tilt Poker’s poker games and lost it all 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), 720 ILCS 5/28-8.

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 discovery assert 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.

“There does not appear to be any authority or case law in Illinois or from any other jurisdiction with similar gambling-loss recovery statutes to support the notion that a gambling-loss recovery case instituted by a third-party may proceed as a class acti­­on,” the defendants contend.

­­The defendants claim that “a third party instituting a claim under the LRA may only recover on behalf of herself, although she may recover losses sustained by multiple losers.”

Pointing to the language of the LRA, they assert in their motion that the statute “limits third-party actions to ‘any person,' in the singular form, meaning that it does not contemplate multiple recoveries by multiple persons.”

As such, the defendants contend that “class certification in this case would be inappropriate, vexatious, and completely unnecessary.”

Fahrner, however, asserts that she qualifies as “any person” under the LRA and “is also ‘directly related and impacted by someone who lost money gambling on Full Tilt Poker.”

She contends that the defendants’ motion to dismiss should fail because her suit states a plausible claim, the court has jurisdiction over the defendants and a prior court-ordered settlement does not bar the suit.

Belleville attorney Lloyd M. Cueto represents Fahrner.

Belleville attorneys William J. Niehoff and Laura E. Schrick submitted the May motion that successfully sought to stay discovery on behalf of six of the named defendants:  Tiltware LLC, Erik Seidel, Howard Lederer, Jennifer Harmon-Traniello and Rational FT Enterprises Ltd.

Several other attorneys, including Michael C. Hermann and Charles J. Swartwout in Belleville, represent some of the remaining defendants.