The Houston Astros baseball fraud scandal has had a major impact. From suspensions to fines to taking away draft picks, the MLB has disciplined the Astros internally. However, there has been speculation about the possible legal consequences of the fraud scandal. Such legal ramifications became apparent on January 23, 2020 when five fantasy baseball players filed a class action lawsuit against the MLB, the Astros, and the Boston Red Sox in the U.S. District Court in the southern borough of New York. Plaintiffs cite pleas for unfair and misleading practices that violate various state consumer protection laws, unjust enrichment and negligence.
The plaintiffs in the complaint allege:
While the MLB member teams actively encourage their fans to place fantasy baseball bets based on the individual statistical performance of MLB players, they secretly engage in corrupt and fraudulent behavior by knowing the official rules and regulations of MLB and Intentionally violating them, thereby skewing player statistics, cheating and depriving their fans of an honest fantasy baseball competition.
The class action lawsuit is being brought by DraftKings candidates to seek damages for the defendants’ unlawful advertising for fantasy baseball competitions that caused them to know or should have known that they were corrupt and dishonest. Plaintiffs allege that the MLB has partnered with DraftKings and entered into a comprehensive league partnership agreement with the sports betting organization. The MLB has been actively promoting DraftKings’ fantasy baseball competitions. In addition, the individual teams have signed lucrative individual advertising agreements with DraftKings, including the Astros and the Red Sox.
Plaintiffs claim that as DraftKings contestants, they placed bets on DraftKings fantasy baseball competitions which they believe were based on the honest performance of MLB players, while the competitions were instead based on cheating by MLB teams and their players for which the league had chosen to turn a blind eye and knowingly not prevent or disclose. The plaintiffs are trying to reclaim amounts wagered on fantasy baseball degrees.
In response, the MLB filed a motion to dismiss, stating that plaintiffs’ allegations are based on the fundamentally flawed premise that because of the MLB’s relationship with DraftKings, fantasy baseball contestants have the right to compete in competitions based on statistics on player performance are not affected by violations of the rules of MLB. In addition, it is argued that plaintiffs got exactly what they expected: competitions determined by the actual performance of baseball players on the field, regardless of which factors were predictable or unpredictable.
Additionally, the MLB pointed out similar past lawsuits that have been dismissed, such as the lawsuit filed by NFL fans in 2010 in connection with the New England Patriots Spygate scandal. In deciding to dismiss that lawsuit, Judge Robert E. Cowen held that, at best, the plaintiff “only had a contractual right to and that seat from which to watch an NFL game between the Jets and the Patriots Right was clearly honored. Judge Cowen also held that sports fans cannot claim to be ignorant of the fact “that players often deliberately violate the rules in order to gain an advantage during the game.”
It remains to be seen whether the MLB’s application for dismissal will be granted. Regardless of the outcome, this will certainly not be the last lawsuit filed against the MLB, Astros and Red Sox in connection with this fraud scandal. However, as can be seen from the previous judgments, courts tend to allow sport to self-monitor and are seldom inclined to intervene.