In two key court decisions over the past week in California and Kentucky, the sponsored professional poker players of Full Tilt Poker and their alleged ownership companies won dismissal of the cases. One keeps the possibility of being resubmitted and the other has an unclear future.
In the simplest of the two decisions, the Franklin Circuit Court in Kentucky on Friday faced a motion for leave to take discovery filed by the head of the Justice and Public Safety Cabinet, Secretary J. Michael Brown, against the Irish based Pocket Kings, Ltd., alleged to be the business arm of Full Tilt Poker, and “unknown defendants.” The case concerns Kentucky’s action to force Pocket Kings to refund “the amount of money lost between March 25, 2005 and September 25, 2009 by persons located within the borders of Kentucky,” according to a complaint filed on March 25th. In essence, the motion asked that the normal process of discovery in the case, which would be started 30 days after the complaint has been served to the defendants, be suspended and any actions in court allowed to move forward without this usual procedure.
The Franklin Circuit Court judge, Thomas Wingate, denied this motion because Kentucky officials have not served the case to Pocket Kings, the only defendant actually named in the motion. Judge Wingate writes in his decision, “Pursuant to (state law) CR 30.01, leave of the court must be obtained if the Plaintiff seeks to take a deposition prior to the expiration of thirty (30) days after service of the summons upon any Defendant. As of the date of entry of this Order (Friday), the only named Defendant, Pocket Kings, LTD (“Pocket Kings”), has not been served. The court finds that allowing discovery here would be premature until Pocket Kings has been served, and until the Court has reviewed any responsive pleadings that Pocket Kings may file.”
The dismissal of the motion doesn’t seem to have an immediate impact on the Kentucky case. While it may be difficult, Secretary Brown and the Justice and Public Safety Cabinet only have to serve the Irish offices of Pocket Kings with the complaint. If Pocket Kings does not reply to the complaint in Franklin Circuit Court, then discovery can proceed in the case after a 30-day wait and potentially head to trial.
The second decision, rendered on Monday in California’s U.S. District Court in Los Angeles, is much more significant in that it dismisses the case filed by Lary Kennedy and Greg Omotoy. In that case, Kennedy and Omotoy alleged that several segments of Full Tilt Poker, including their “dotcom” and “dotnet” sites, sponsored pros, Pocket Kings, California based Tiltware, LLC, and a company called DOES 1-10, were, in essence, running an illegal company that violates the United States’ Racketeer Influenced and Corrupt Organization (RICO) Act, among other violations of state law. In an amended complaint filed on January 11th, Kennedy and Omotoy allege that the defendants violated nine California state law causes of action, one federal claim under RICO, and one claim for libel under the law of Ireland.
In the decision rendered Monday by the honorable Margaret Morrow of the U.S. District Court, Judge Morrow determined that the plaintiffs could not meet the definition of what constitutes a RICO crime, which was the only part of the case she could rule upon as a federal action. In her decision, Judge Morrow stated, “[To file a RICO claim], a plaintiff [must] allege the time, place, and manner of each predicate act, the nature of the scheme involved, and the role of each defendant in the scheme.” Judge Morrow felt that the plaintiffs failed to meet this rule of law and also ruled that the plaintiffs failed to demonstrate the alleged intricate ties that bind the numerous defendants together in their motion, which would also be necessary to constitute a RICO crime.
In the view of Judge Morrow, Kennedy and Omotoy failed to detail many other portions of their case regarding state violations and, in particular, there could be no claim under the RICO Act. Judge Morrow decided in the case to dismiss with leave – opening the opportunity for a re-filing of the complaint in federal court if Kennedy and Omotoy can present a viable argument – but did not dismiss the state claims, which Judge Morrow could have done, and allows the case to be potentially filed in California District Court.
With these two decisions, some of the heat that Full Tilt Poker – and its alleged related operations – has been feeling of late in courtrooms across America has been lessened. While these dismissals are a good sign, both cases have the opportunities for further action if the plaintiffs can meet each jurisdiction’s level of proof and present a case that can be legitimately litigated.