BUSINESS

Federal judge tosses Draftkings’ petition back to Tennessee court

TAGs: daily fantasy sports, DraftKings, Harry S. Mattice, Leonard Postrado, tennessee

A federal judge has thumbed down the request of daily fantasy sports (DFS) provider DraftKings to hear the lawsuit filed by a wife of a gambler who has lost over $40,000.

Federal judge tosses Draftkings’ petition back to Tennessee courtJudge Harry S. Mattice has remanded the case of Erica Miller against DraftKings to the Chancery Court of Greene County, Tennessee. According to gambling news website Legal Sports Report, Mattice’s decision represents one of the first formal rulings against the DFS provider.

In his June 30, 2016 decision, Judge Mattice stressed that the DFS operator failed to convince him that the case should be tried in a federal court given the fact that the amount involved in the lawsuit exceeds $75,000.

By rule, federal courts only hear cases worth $75,000 or more. Smaller cases stay with state-level courts.

“In short, Defendant has failed to convince the Court that punitive damages should be included in its amount-in-controversy analysis because Defendant has offered nothing more than speculation that Plaintiff might seek such relief,” the decision, which was posted on the news website’s page, read.

Records show that the lawsuit against Draftkings stemmed from Miller’s complaint that the DFS provider operated “a daily and weekly fantasy sports website that amounts to an unlawful gambling enterprise and/or lottery” under Tennessee state law.

As a result, her husband allegedly lost a hefty amount of money to Draftkings.

In her petition dated April 1, 2016, Miller is seeking the Tennessee court to order Draftkings to pay her $46,400 worth of damages. DraftKings, for its part, elevated the case to the federal court as it believes that the money involved in the lawsuit will reach more than $75,000 for compensatory and punitive damages.

The DFS provider claimed that Miller’s initial settlement offer is strong evidence that the amount in controversy exceeds $75,000.00. While Plaintiff claims that this lawsuit is only worth $46,440.00, Plaintiff offered to settle this case for $74,000.00.

Judge Mattice disagreed with each of DraftKings’ claims and ruled that the case should be “remanded” to Tennessee state court where it was initially filed.

“Third, Defendant argues that “[n]othing in [Plaintiff’s] complaint specifically disclaims seeking punitive damages or attorneys’ fees, nor has she filed any stipulation to that effect.” (Doc. 19 at 14). This argument ignores the relevant standard. It is well established that it is Defendant’s burden to show by a preponderance of the evidence that removal was proper. Hayes, 266 F.3d at 572. Absent controlling authority to the contrary, the Court refuses to hold that Plaintiff’s failure to stipulate that damages do not exceed $75,000.00 establishes federal subject matter jurisdiction,” the Judge said.

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