Full Tilt Poker Settlement

Law

On May 16, a proposed Class action lawsuit and proposed Class Certification for three RICO cases against Full Tilt Poker was rejected by a New York Magisterial Judge, who found that the claimed settlements were improperly denied procedural rights on several grounds. Plaintiffs’ counsel responded to this dismissal with an Amended Complaint, which claimed that, among other things, the Judge had exceeded his authority in considering the original complaint when issuing the complaint, that there was no evidence of damages, and that the plaintiffs were not likely to succeed on their claims. In light of these conclusions, and in recognition of the recent New York State Supreme Court’s rejection of a similar claim brought by an individual who claimed that Full Tilt Poker was essentially guilty of fraud, the parties agreed that the case would be continued in New York State court. Accordingly, on June 12, the New York State Magisterial Circuit issued its written order rejecting all but one claim against Full Tilt Poker. The dismissal did not restate the allegations regarding the defrauding of the named plaintiffs, but left open the possibility that such allegations may be sustained in the future. On that basis, plaintiffs’ counsel advised them that they should “defer any actions and continue the present action” until the discovery process in the case had concluded.

It is not clear why the Magisterial Circuit’s order was delayed. There is no reason to believe that this delay was caused by any negligence on behalf of the defendants, or by the failure of the plaintiffs to conduct a thorough investigation into the validity of their claims. Based on what I have observed, it appears to me that there were significant deficiencies in the investigation of the claims in this case. For example, many of the emails used to support the complaint had been deleted long before the email was served to the defendants. It also appears that some of the emails that were not deleted were not really deleted at all-and that, depending on the IP address associated with the computer from which Full Tilt Poker received the emails, those emails may exist on another computer at another location even today. It is not obvious to me that there is any other reasonable explanation for the delay other than the defendants’ desire to avoid setting forth the case with the full knowledge of the Magisterial Circuit and the plaintiffs’ counsel.

One of the most problematic aspects of the whole case is that the plaintiff’s counsel apparently had little to do with the drafting of the complaint, its drafting from start to finish. This is in contrast to cases in which counsel is an integral part of the litigation team, as is the case in the United States versus Internet casino, which also involved a large number of world-class poker players. At all, while Richard Lederer served as one of the “lead” lawyers on the case with experience in such litigation, his role in the legal filings and motions was minimal. As is apparent from the Complaint, his role was confined to filing legal documents on the defendants’ behalf, and to participating in depositions with regard to the case. Moreover, Mr. Lederer did not appear at all of the trial sessions and did not even appear at the motion hearing. There is nothing inconsistent with the foregoing.

The plaintiffs have also alleged that Mr. Lederer, in all likelihood, did not disclose that he was paid a six-figure salary by the Online Poker Corporation and did not disclose this income when he took the case to the court. Mr. Lederer has counterclaimed that the plaintiffs are guilty of fraudulently painting his role in the lawsuit in bad light and asserts that he has never been paid back the money he received from the corporation, and there is no evidence that such compensation ever existed. The fact is that the plaintiff’s complaints about Mr. Lederer and the lawsuit itself are fraudulent. There is simply no basis for such allegations.

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