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The Ifrah law firm won a favorable ruling on behalf of Full Tilt companies and the individual poker professionals who were named as defendants in the first class action suit brought by former U.S. Players in the United States District Court for the Southern District of New York last summer.
The suit, which involved complex fraud issues arising out of claims of conversion and civil RICO, was the result of Plaintiff's demand for return of U.S. player funds that held in Full Tilt player accounts after the government shut down on Black Friday. Ifrah Law was able to obtain a dismissal of ALL claims against the individual poker pro defendants, as well as all RICO claims against the corporate defendants.
The lawsuit demanded not only a return of Plaintiff's money under a conversion claim, but it also accused the defendants of racketeering, which would have entitled Plaintiffs to treble damages (or three times the amount owed). Plaintiffs alleged that the that the only reason players suffered losses was due to executives and others associated with Full Tilt companies willfully committed wire and bank fraud and money laundering.
In his January 30, 2012 Order, U.S. District Judge Leonard B. Sand held that Plaintiffs did not have standing to institute their RICO claim. Specifically, Judge Sand found that it was not clear at this point in the litigation "whether the direct cause of Plaintiffs' injuries was the decision by the U.S. Attorney's office to temporarily shut down the Full Tilt Poker website and seize the company's assets or was instead, as Plaintiffs' conversion allegations suggest, the subsequent decision by one or more of the Defendants to halt player withdrawals from the Full Tilt Poker website."
As to Plaintiffs' conversion claim, Judge Sand held that the claim could proceed with respect to Pocket Kings Limited, Vantage Ltd., and Filco Ltd. only. Judge Sand granted Plaintiffs leave to amend the conversion claim with respect to Tiltware LLC and Pocket Kings Consulting because the current complaint, as stated, did not allege that these corporate entities played some role in the conversion. As for the individual poker pro defendants, Judge Sand dismissed the conversion claim outright, without leave to amend.
The Order not only represents a victory for the individual defendants in this case, but it also represents a victory for the individual defendants in the other class action cases pending in New York that still remain. A key finding in Judge Sand's Order was that there were no facts to support jurisdiction against the individual defendants in this court. The court stated that not only do the allegations fail to demonstrate that any of the individual defendants committed a tortious act outside of New York, but that the individual defendants committed a tortious act of any sort at all.
Although this case will proceed with respect to some of the corporate defendants, Judge Sand's Order represents a victory for them as well. The dismissal of the RICO claims against the corporate defendants signals to other plaintiffs that the events leading up to Black Friday and post-Black Friday may not be as clear cut as they may appear in the pending criminal indictments. The dismissal also limits the types of damages to which these defendants may have been exposed to had the court allowed the claim to proceed.
Jeff Ifrah, founder of Ifrah Law hopes the Court's decision will incentivize others to quickly abandon their law suits. "The Court's decision recognizes that relief for the players is being pursued by the United States. There is no compelling basis to open additional doors for private class action lawyers to pursue that very same relief."
