While the coronavirus has stopped us from enjoying baseball, it cannot stop us from reading cases about it. Last week, a magistrate judge sitting in Las Vegas dismissed without prejudice one of a handful of cases filed relating to the recently discovered sign-stealing scandals in Major League Baseball (Oliver v. Houston Astros L.L.C. et al, No. 2:20-cv-00283-APG-VCF (D. Nev. Feb. 10, 2020)). The plaintiff, Anthony Oliver, sued both the Houston Astros and Boston Red Sox for RICO violations and unjust enrichment after unsuccessfully wagering thousands of dollars on the Dodgers to win the World Series in both 2017 and 2018.
Court Rejects Oliver’s RICO Claims
The court rejected Oliver’s RICO causes of action for failure to adequately plead that he had standing to bring the claims. Specifically, the court concluded that Oliver could not show that he was the “direct victim” of the alleged conspiracy “because his actions (placing bets) [we]re distinct from the alleged RICO violation (defrauding the Dodgers of their [possible] World Series titles).” To bolster its conclusion that there was no causal link between the defendants’ alleged misconduct, on the one hand, and the plaintiff’s injuries, on the other, the court further observed that “[t]he Astros and Red Sox could have won the World Series for any number of reasons unconnected to the asserted pattern of fraud” as “[t]he fact that a team may engage in the fraudulent use of technology to steal hand signals does not guarantee that the signal-stealing team will win.” While the court did not specifically mention the most widely accepted explanation for the Dodgers’ back-to-back World Series losses (i.e., the fact that the team was comprised of choke artists), it acknowledged that “Oliver could have lost his bets for many reasons.”
With respect to the unjust enrichment claim, the court rejected Oliver’s theory as well for failing to plead any type of “direct exchange” with the defendants. Instead, the court observed, Oliver “placed his bets with third parties: a Las Vegas casino and a sports betting app.” The Astros and Red Sox, therefore, did “not retain a benefit from [his] gambling losses,” so a claim for unjust enrichment could not stand.
Other Pending Lawsuits Against the Astros and Red Sox
While the other pending lawsuits in federal court against the Astros and Red Sox filed by gambling plaintiffs arise from various state unfair competition and consumer protection law claims, in addition to common law unjust enrichment and negligence allegations (see, e.g., Olson v. Major League Baseball et al, No. 1:20-cv-00632-JSR (S.D.N.Y. Jan. 23, 2020); Clifford v. Major League Baseball et al, No. 1:20-cv-01000-JSR (S.D.N.Y. Feb. 5, 2020); Lucas v. Sportradar, US et al, No. 0:20-cv-00602-PJS-TNL (D. Minn. Fe. 26, 2020)), they nevertheless all involve the same fundamental misalignment between the plaintiffs (who are gamers and gamblers that transacted with third parties) and the defendants (the teams, which are effectively strangers to those transactions) that doomed Oliver’s complaint.
Moreover, other guidance, though arguably dicta, in the Oliver decision suggests these complaints may face similar fates. After recounting the various data points in the long history of “[c]heating scandals in sports,” the court explained that “it is no secret that athletes will sometimes disappoint their fans by acting unethically to gain a perceived edge.” Accordingly, the court observed, courts from across the country have refused to “become replay officials for disappointed fans” in lawsuits similar to Oliver’s. While it remains to be seen how courts will analyze the sign-stealing scandal under the specific rubrics of state unfair competition and consumer protection laws, the Oliver decision will undoubtedly be a speed bump for gambling plaintiffs in obtaining relief against the Astros and Red Sox for their supposed role in the sign-sealing scandals that rocked the baseball world.