Filing # 51439294 E-Filed 01/20/2017 03:00:09 PM.
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IN THE ELEVENTH JUDICIAL CIRCUIT COURT
IN AND FOR MIAMI-DADE COUNTY, FLORIDA,
PETER KAMENKOVICH, ef al.
Plaintifts,
Case No.: 2016-03 1827-CA-01
vs
CSGOLOTTO, INC. and TREVOR A
MARTIN,
MOTION TO DISMISS
COUNTS II, II, AND IV
OF CLASS ACTION COMPLAINT AND
MOTION TO TOLL RESPONSE TO.
COUNT I WITH INCORPORATED
MEMORANDUM OF LAW
Defendants,
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Defendants, CSGO LOTTO, INC. and TREVOR A. MARTIN (hereinafter “Lotto”
and “Martin”), pursuant to Fla, R. Civ. P. 1,140(b), move to dismiss counts II, III, and IV of
the class action complaint filed by Plaintiffs, PETER KAMENKOVICH, et al., and in
support thereof state as follows:
ie INTRODUCTION
Since July 2016, this ease has traveled the continental United States from north to
south to east to west—making pit stops in four separate forums—in an effort to find a court,
any court, to entertain Plaintiffs" claims, all of which are rooted in alleged illegal gambling of
certain virtual items. The latest complaint, as with all the priors, is loaded with a series of
egal conclusions that are not entitled to the assumption of truth. This lawsuit is the
functional equivalent of a card player flipping over a table when he is unhappy with the final
results of a game. Simply put, Plaintiffs, all forty-four of them, knowingly and voluntarily
participated in certain games on Lotto’s website, When Plaintiffs lost, or did not win as
much as they would have hoped, they cried foul and alleged that all of Lotto’s games were10
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illegal gambling, The instant lawsuit is Plaintiffs’ fifth bite at the apple, as the four prior
lawsuits were all dismissed. Count II of the complaint blatantly ignores Florida law, and
does no more than list a series of state statutes, without any supporting facts directed to the
elements of those offenses. Count III is barred, with prejudice, by the two dismissal rule.
And count IV fails because, among other reasons, Lotto and Martin did not have a duty to
disclose, with respect to the alleged fraudulent omission at issue. The court should dismiss
counts II, IIL, and TV of the complaint."
Il. BACKGROUND
Forty-four Plaintiffs, seven of whom are allegedly Florida residents, seek relief
against Lotto and Martin, both of whom are Florida citizens, for alleged violations of the
Florida Deceptive and Unfair Trade Practices Act, (count I), alleged violations of the
Uniform Deceptive and Unfair Trade Practices Act, under the auspices of the statutes of
twenty-three different states (count II), unjust enrichment (count ILI), and fraud and
misrepresentation (count IV). See generally Compl, According to the captions that directly
allege the four causes of action, Counts III and IV are against Lotto, while counts I, III, and
IV are against Martin?
' The court should not require Lotto and Martin to serve a response to count I until this motion is resolved.
After the court rules on this motion (and permits amendment, if the court deems appropriate), then Lotto and
‘Martin will file a response as (o all remaining counts in the complaint, By filing this motion, Lotto and Martin
do not waive, and expressly reserve, all defenses to the complaint
ILis unctear whether count II is alleged against Lotto or Martin, or both. See Compl. at p. 40. For one thing,
the caption of count Il, unlike counts I, Ill, and IV. does not reference either defendant. Jd. For another, count
tacks an ad damnum clause that demands relief, from anyone, See Fla, R. Civ, P. 1,1 10¢b) (stating that a
ccause of action shall contain “a demand for judgment for the relief to which the pleader deems himself or
herself entitled”). In an abundance of caution, Lotto and Marin will assume, for purposes of this motion, that
count IT is alleged against both of them.10
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Ina nutshell, Plaintiffs allege that Valve Corporation through its videogame, Counter
Strike: Global Offensive (*CSGO”), “allowed an illegal online gambling market” through
“its Steam platform.” Compl. at] 3. The complaint liberally cites to a litany of Internet
sources in support of its allegations, including 19
as well as a YouTube scene from the classic movie “Casablanca,” and there appear to be very
few allegations actually based on Plaintiffs’ personal knowledge. See generally Compl
CSGO players purchase virtual weapons (-e., “Skins”) that are “used as collateral for bets”
on certain websites, including www,csgolotte,.com, which is operated by Lotto. Id. at ${]2, 6,
8. Valve allegedly “takes a 15% fee on the sale of each Skin.” Id. 6.
CSGO players access the “Steam marketplace,” owned by Valve, where they can
deposit Skins into their “Steam Wallet.” 1d. at $f] 65, 67. Players can “link their individual
Steam accounts” to “third-party websites,” like the one operated by Lotto. /d. at 5. As best
their Steam Wallets and then
understood by Plaintiffs, Lotto’s website allows users to a
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“place bets on various casino-style games, lotteries, jackpots, and other ways to gamble Skins
as if they were casino chips.” Jd. at 8. All Skins are “into a large pool, and one winner is
chosen at random to take all of the Skins.” Compl. at {| 101. The complaint does not allege
that Lotto and Martin cash out the “casino chips,” nor that they convert any Skins to any real
world currency. See id. Instead, Plaintiffs allege that Lotto allows winners to “transfer”
kins to their Steam account, which they can convert to real world currency by going to a
secondary market, one of which is allegedly operated by Defendant OpSkins Group. Id. at §
10, 83. There is no allegation that Lotto is affiliated with OpSkins Group, nor that Lotto has
any control over any such secondary market, See id.10
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Plaintiffs also allege that, Martin, a Florida citizen and owner of Lotto, “actively
promotes Lotto as a Skins gambling service” through his YouTube channel, which
“generate[s] excitement.” /d. at {¥ 9, 112. Plaintiffs state that on some past occasion, Martin
posted YouTube videos showing him “winning large amounts of real money-not Skins-by
gambling.” /d. at § 115. Plaintiffs do not allege that they were players in the same games as
Martin, See id.
Plaintiffs take issue with Martin’s alleged failure to disclose that he was a partial
‘owner of Lotto, and they presume that his ownership meant that he “was able to decide the
outcome of contests in which he entered.” Compl. at € 200. Plaintiffs do not allege that
Martin actually manipulated the results of any “contest,” only that it might have been
possible for him to do so. See id. Nor do Plaintiffs allege that they did not have an equal
chance of winning any contest on Lotto’s website, even if Martin may have participated in
the same games. See id. With respect to damages, Plaintiff’ allege that they lost the value of
their Skins, but they “knew” they could “cash out” the value of their Skins “for real money
prior to losing them while gambling.” Jd. at $¥ 17-60.
I. PROCEDURAL HI:
RY
This putative class action has a long and difficult procedural history, albeit in four
other courts, Nevertheless, the actions of the class representatives in those proceedings are
ive of this action, Plainti
counsel initially filed suit on June 23, 2016, in
partially disposi
the United States District Court for the District of Connecticut. The lawsuit was against
Valve Corporation, and sought certification of a nationwide class that is practically identical
to the one sought in this case. The claims at issue in the first lawsuit were: restitution (count1), unjust enrichment (count II), federal civil racketeering (count II}, and Connecticut unfair
trade practices (count IV)
On July 1, 2016, Plaintiffs’ counsel filed a second lawsuit in the United States District
Court for the Souther District of Florida. The class action complaint identified Plaintiff
C.B. as the class representative in that proceedi
Initially, Plaintiff C.B, only named Valve
Corporation as a defendant in the second lawsuit. On July 4, 2016, Martin made a series of
public statements through Twitter, which ostensibly caught the eye of Plaintiffs’ counsel,
who then quickly amended the second lawsuit on July 7, 2016, to include general alleg
as to Lotto and Martin to name them as defendants in the action, as well as Non-Party,
Thomas Cassell (“Cassell”), The second lawsuit sought nationwide class certification of.
“All persons in the United States whose money was used to
purchase Skins in any account with Defendants and/or their
unnamed co-conspirators[.]”
The claims at issue in the second lawsuit were: restitution (count 1), unjust enrichment (count
Il), federal civil racketeering (count II1), Florida unfair trade practices (count TV), and fraud
and misrepresentation (count V).
On July 7, 2016, Plaintiffs’ counsel also chose to file yet a third lawsuit, in the United
States District Court for the District of New Jersey. The elass action complaint identified
Plaintiff Jayme Reed as the class representative in that proceeding, and Valve Corporation,
Lotto, Martin, and Cassell as defendants. The third lawsuit sought nationwide class
certification of
“All persons in the United States whose money was used to
purchase Skins in any account with Defendants and/or their
unnamed co-conspirators[.]”10
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The claims at issue in the third lawsuit were: restitution (count 1), unjust enrichment (count
Il), federal civil racketeering (count II1), and New Jersey consumer fraud (counts IV, V, and.
VD.
‘On August 4 and 5, 2016, Plaintiffs’ counsel voluntarily dismissed all claims alleged
in the first lawsuit, second lawsuit, and third lawsuit, pursuant to Fed. R. Civ. P. 41
Contemporaneously, Plaintiffs’ counsel filed a fourth lawsuit in the United States District
Court for the Western District of Washington, The class action complaint identified fifty-two
class representatives in that proceeding, and Valve Corporation, Lotto, and Martin, among
others, as defendants.’ The fourth lawsuit sought nationwide class certification of:
“All persons in the United States (“National Class”) and/or in each
individual state (“State Subclasses”) who purchased Skins or
whose money was used to purchase Skins in any account with
Defendants and/or their unnamed co-conspirators(.”
The claims at issue in the fourth lawsuit were: violations of fifty state gambling statutes
(count 1), unjust enrichment (count I), federal civil racketeering (count III), fraud and
misrepresentation (counts IV and V), violations of fifty state consumer protection statutes
(count VI), New Jersey consumer fraud (counts VII and VIII), negligence (count IX), and
declaratory relief (count X)
On September 1, 2016, Lotto and Martin moved to dismiss the class action complaint
in the fourth lawsuit. On October 4, 2016, the court entered an order dismissing the
complaint in its entirety, and specifically with prejudice as to count III for federal civil
® Twee of these class representatives, for whatever reason, chose not to be class representatives in this action.racketeering, The instant lawsuit is a continuation of the prior four lawsuits in various,
federal courts.
IV. LEGAL
NDARD
The Rule 1.140(b)(6) dismissal standard is well-known to the court. “The test for a
‘motion to dismiss under rule 1.140(b)(6) is whether the pleader could prove any set of facts
whatever in support of the claim.” Rocks v. McLaughlin Engineering Co., 49 So, 34 823,
826 (Fla. 4th DCA 2010). “All allegations of the complaint must be taken as true and all
reasonable inferences drawn therefrom must be construed in favor of the non-moving party.”
Felder v. State, Dep't of Mgmt. Servs., Div. of Ret., 993 So. 2d 1031, 1034 (Fla. Ist DCA
2008) (citing The Fla. Bar v. Greene, 926 So.2d 1195, 1199 (Fla, 2006), Even in the face of
this well-known legal standard, the court must dismiss the complaint
ARGUMEN
Through Count IL, Plaintiffs Seek To Enforce Twenty-Three State
Consumer Protection Statutes, Yet They Do Not State A Single Cause Of
Action Under Any Of These Statutes.
Plaintiffs blatantly ignore the Florida rules of general pleading by cramming twenty-
three separate state statutes into a single count in the complaint to allege twenty-three causes
of action therein, and Plaintiffs make zero effort to identify the elements of these twenty-
three separate statutes, nor allege the ultimate Facts to support them, Under Florida law,
mn or occurrence and each defense other than
founded upon a separate transacti
“[elach clai
denials shall be stated in a separate count or defense when a separation facilitates the clear
presentation of the matter set forth.” Fla. R. Civ. P. 1.110(f)10
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Itis well-settled that, to withstand dismissal, a cause of action must actually allege
the requisite elements of the claim that a plaintiff seeks to prove. See, e.g, Sanderson v:
Eckerd Corp., 780 So, 24 930, 933 (Fla. Sth DCA 2001) (“It is axiomatic that a complaint
must allege ultimate facts establishing each and every essential element of a cause of action
in order to entitle the pleader to the relief sought.”), Plaintiffs’ complaint fails to meet this
basic pleading standard, and instead simply relies on a list of statutes that Lotto and Martin
allegedly “violated,” coupled with naked, conclusory allegations to support the numerous
ns alleged. This is improper.
In the consumer protection context, “[s]everal courts have held that merely listing
statutes that could provide possible causes of action without explaining even the broadest
contours of how those statutes were violated “is insufficient to state a claim.” Jn re
Aluminum Warehousing Antitrust Litig., No, 13-MD-2481 KBF, 2014 WL 4743425, at *1
(SD.N.Y. Sept. 15, 2014), aff'd, 833 F.3d 151 (2d Cir. 2016) (collecting cases dismissing a
series of consumer protection statutes alleged in a single count of a complaint); accord Beyer
v, Moynihan, No. CV 10-523-MO, 2010 WL 4236871, at *5 (D. Or. Oct. 19, 2010) (“A mere
list of statutes is insufficient to state a claim” when the pleader “does not allege facts
showing how these laws were violated.”), Cohen v. Doe, No. CIV A 08CV02188BNB, 2008
WL 4663628, at *1 (D. Colo, Oct. 15, 2008) (dismissing because plaintiff merely cited a
* Some of which seemingly have nothing at all to do with Plaintiffs" amorphous claims, such as Plaintiffs
allegation that Lotto and Martin somehow violated the Nebraska Pure Food Act, Neb. Rev. Stat. § 81-2.285, et
seq., and the Pennsylvania Solicitation of Funds for Charitable Purposes Act, 10 Pa, Stat. Ann, § 162.15, ef seq.
See Compl. at § 187(m), (1). Given that none of Plaintiffs” allegations give rise to the distribution of food (as
requited by the Nebraska statute) or a charitable organization (as required by the Pennsylvania statute), itis not
clear how either of these statutes can serve as.a basis for relief,10
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number of statutes but “failfed] to link his specific claims to the cited statutes and he failfed]
to allege specific facts that correspond{ed] to the cited statutes”)
Plaintiffs’ pleading deficiency is a significant problem that cannot be ignored because
there is considerable variation among the elements in the twenty-three statutes they seek to
enforce, To demonstrate the complete implausibility of the allegations, Plaintiffs do not even
allege to be consumers, which is a threshold element under many, if not all, of the state
statutes listed in count II. See e.g., Deerman v. Fed. Home Loan Mortg. Corp., 985 F. Supp.
1393, 1399 (N.D. Ala. 1997), aff'd sub nom. Deerman v. Fed. Home Loan Mortg., 140 F.3d
1043 (11th Cir. 1998) (citing Ala. Code § 8-19-10 and stating that the cause of action under
Alabama law is “for a “consumer’”). And there are numerous other problems. For example,
Minnesota's statute requires an allegation that the action will benefit the public at large, as
‘opposed to only the consumers involved in the litigation, See, e.g., TCF Nat. Bank v. Mkt.
Intelligence, Inc., No. CIV. 11-2717 JRT/AJB, 2012 WL 3031220, at *8 (D. Minn. July 25.
2012) (discussing the Minnesota consumer protection statute and stating that the statute
“limits such actions to those that benefit the public”), Nowhere in count I do Plaintiffs
scratch the surface of making such an allegation, Thus, Plaintififs have failed to state a claim
under any of the twenty-three state statutes identified in count II, and the court must dismiss
this claim,
B, The Court Has No Subject Matter Jurisdiction Over Count III For
Unjust Enrichment, And In Any Event, Count III Fails To State A Cause
Of Action,
‘The fact that Lotto and Martin have only drawn attention to obvious pleading deficiencies under Alabama and
Minnesota law is by no means a concession that the other state statutes are sufficiently alleged. These examples
are given merely to illustrate the inherent problems in Plaintiffs" pleading strategy10
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‘The court lacks subject matter jurisdiction over count III because Plaintiffs previously
di
ed the claim twice, which, pursuant to the Florida Rules of Civil Procedure, divested
this court over the power to hear the claim, But even if the Plaintiffs had not prejudiced their
own alleged rights with respect to count III, the unjust enrichment claim still fails to state a
cause of action because although Plaintiffs are seeking to pursue a claim in equity, they also
allege an adequate remedy at law for the same conduct on which the unjust enrichment claim
is based. Compounding matters further, the doctrine of am pari delicto bars Plaintifts from
recovering money damages from their active participation in alleged illegal conduct.
1, Unjust enrichment fails as a matter of law under the “two dismissal” rule
because the claim has already been adjudicated on the merits,
The Florida Rules of Civil Procedure, like their federal counterpart, address situations
where, as here, certain causes of action are deemed adjudicated on the merits when they have
been previously voluntarily dismissed twice in any court action by a real party in interest.®
See Fla R. Civ. P. 1.420(a)(1). ‘The relevant portion of Rule 1.420 is as follows’
Unless otherwise stated in the notice or stipulation, the dismissal is
without prejudice, except that a notice of dismissal operates as an
adjudication on the merits when served by a plaintiff who has once
dismissed in any court an action based on or including the same
Jd, (emphasis added). Florida has long recognized the two dismissal rule. See, e.g., Variety
Children’s Hosp. v. Mt. Sinai Hosp. of Greater Miami, Inc., 448 So. 2d 546, 547 (Fla. 34
DCA 1984) (collecting cases and authorities under Rule 1.420); accord Captiva RX, LLC v.
courts, when analyzing Rule 1.420, should use federal decisions, analyzing Rule 41. as persuasive
authority because the Florida rules are patterned after the federal rules and both two dismissal rules have the
‘same underlying policy rationale, See, e.g., Cypress Fairway Condo. Ass'n, Inc. v. Cypress Madison
Ownership Co., 163 So. 34730, 731 (Fla, Sth DCA 2015) (“Cases interpreting Federal Rule of Civil Procedure
A, the federal counterpart to rule 1.420, are useful in interpreting rule 1.420.”),Daniels, No. 5:14-CV-265 MTT, 2014 WL 5428295, at *3 (M.D. Ga. Oct. 23, 2014) (citing
the application of the two dismissal rule in a variety of federal jurisdictions). “Overall,
courts must strictly construe the two dismissal rule, as itis in derogation of a previously
existing right.” Edmondson v. Green, 755 So. 2d 701, 704 (Fla. 4th DCA 1999) (emphasis
added) (citing Crump v. Gold House Restaurants, Inc., 96 So. 2d 215, 219 (Fla. 1957).
Florida courts consistently make clear that the only prerequisites to the two dismissal
tule is that the same claim was voluntarily dismissed by the real party in interest, or one in
privity with him. See, e.g., Villalona v. 21st Mortg. Corp., 195 So. 3d 1199, 1201 (Fla. 4th
DCA 2016) (stating that “[t]he fact that the second plaintiff was a different party than the
first plaintiff does not preclude rule 1.420(d)'s application” because the parties were in
ity); Variety Children’s Hosp., 448 So. 24 at 547 (“In Florida, the test for deciding
pri
whether there is identity of causes of action rests upon a comparison of the facts constituting
the underlying transaction.”) (citing Gordon v. Gordon, $9 So, 2d 40, 44 (Fla. 1952))
Here, there can be no genuine dispute that the same unjust enrichment claim is not
(again) at issue, as was alleged in the federal court actions in both New Jersey and Florida in
July 2016, In fact, not only are the unjust enrichment allegations in the New Jersey and
Florida actions identical, but the unjust enrichment allegations in those two suits are also the
same as those here, in count IIL, Thus, the same cause of action is alleged in all three suits,
which is suffici
nt to invoke the two dismissal nule, See Variety Children's Hosp., 448 So.
2d at $47 (stating that a court “must review the prior pleadings and determine whether the
missed actions are based on or include the same claim”) (citing Crump v. Gold House
Restaurants, Inc., 96 So. 2d 215, 218 (Fla. 1957)). Asa result, the analysis all boils down to10
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whether the same “plaintiff,” within the meaning of Rule 1.420, twice voluntarily dismissed
the unjust enrichment claim.
“[T]he two-dismissal rule applies when parties are nominally different so long as they
are the same real party in interest.” Sealey v. Banking, No. 2:15-CV-837-WKW, 2016 WL
5402780, at *6 (M.D. Ala, Aug, 22, 2016), report and recommendation adopted sub nom.
Sealey v. Branch Banking & Trust Co., No. 2:15-CV-837-WKW, 2016 WL 5395266 (M.D.
Ala, Sept. 26, 2016); Captiva RX, 2014 WL 5428295, at *3 (stating that “where the plaintiffs
are nominally the same or in privity with the named plaintiff in... [the] lawsuits, the
plaintiffs are the same for purposes of Rule 41”); Melamed v. Blue Cross of California, No.
CV 11-4540 PSG FFMX, 2012 WL 122828, at *6 (C.D. Cal, Jan, 13, 2012) (“As the three
actions arose from this same common nucleus of operative facts and involve the same parties
in interest, each of Plaintiffs’ state-law causes of action... are barred by application of Rule
41(a)’s ‘two dismissal” rule.”)
In the class action context, itis well-settled that “unnamed class members are in
privity with class representatives.” Pedraza v. United Guar. Corp., No. CV199-239, 2001
WL 37071198, at *4 (S.D. Ga, Sept. 19, 2001) (citing Richards v. Jefferson Cty., Ala., $17
U.S. 793, 798 (1996)). “Privity is a flexible legal term, comprising several different types of
relationships and generally applying when a person, although not a party, has his interests
adequately represented by someone with the same interests who is a party.” Sealey, 2016
WL 5402780, at "6 (quoting £.E:0.C. v, Pemeo Aeroplex, Inc., 383 F.3d 1280, 1286 (11th
Cir, 2004)), “[T}here is privity between a non-party and a party in a prior action if the non-
party’s interests were adequately represented by a party that had the same interests.” Sealey,10
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2016 WL 5402780, at *6 (quoting Williams v. SunTrust Banks, Inc., 280 F. App’x. 885, 886
(Ith Cir. 2008)).
Both prior lawsuits were class actions brought by class representatives (i-e., Plaintiff
Jayme Reed in New Jersey and Plaintiff C.B. in Florida) on behalf of putative class members
consisting of:
“All persons in the United States whose money was used to
purchase Skins in any account with Defendants and/or their
unnamed co-conspirators[.]”
Thus, in New Jersey, Plaintiff Reed previously brought the same unjust enrichment claim on
behalf of C.B., and others, who were necessarily included as putative class members in the
New Jersey action, as shown through this suit, where C.B., and others, allege to be class
representatives, and by extension, class members who are allegedly entitled to relief. In the
same vein, in Florida, Plaintiff C.B. previously brought the same unjust enrichment claim
again on behalf of Jayme Reed, and others, who were necessarily included as putative class
‘members in the Florida action, as shown through this suit, where Jayme Reed, and others,
allege to be class representatives, and by extension, class members who are allegedly entitled
to relief. Consequently, while the prior New Jersey and Florida actions differed with respect
to the named-Plaintiffs, the critical fact is that both lawsuits were brought by class
representatives on behalf of the same real parties in interest—class members as a whole—for
the same claim, unjust enrichment, This means that all Plaintiffs in this suit, as well as all
unnamed members of the putative class, are in privity with Plaintiff Reed and Plaintiff C.B.’s
prior voluntary dismissals, Pedraza, 2001 WL 37071198, at *4, and this privity precludes
further pursuit of the unjust enrichment claim, Villalona, 195 So, 3d at 12012. Unjust enrichment fails as a matter of law when a plaintiff alleges an
adequate legal remedy and references a contract between the parties,
Florida courts are well-versed in litigation tactics, as here, where a plaintiff seeks to
bring an unjust enrichment claim based on the same conduct that allegedly supports another
claim with an adequate legal remedy. See, e.g., Guerrero v. Target Corp., 889 F. Supp. 2d
1348, 1356 (S.D. Fla. 2012) (dismissing unjust enrichment claim due to an alternative claim
in the complaint alleging a violation of the FDUTPA). Unjust enrichment is an equitable
remedy. “Liability in unjust enrichment has in principle nothing to do with fault, Ithas to do
with wealth bei
1g in one person’s hands when it should be in another person’s,” Jd. (citing
Guyana Tel. & Tel. Co. v. Melbourne Int'l Comms., Ltd., 329 F.3d 1241, 1245 n. 3 (11th Cir.
2003). “[A] plaintiff cannot pursue an equitable theory, such as unjust enrichment or
quantum meruit, to prove entitlement to relief if an express contract exists.” Fulton v.
Brancato, 189 So, 3d 967, 969 (Fla. 4th DCA 2016).
Here, Plaintiffs’ allegations in count I for an alleged violation of the FDUTPA that,
are directed to Martin are based on the same conduct underlying the unjust enrichment claim
and both claims rely on the same factual predicate, According to Plaintiffs, but for Martin’s
actions on YouTube, they would not have played games on Lotto’s website. See Compl. at §
182, By extension, this necessarily means that Plaintiff’ have alleged that the benefit they
conferred on Martin (ie., depositing Skins on Lotto’s website) only occurred because Martin
allegedly misled them. See generally id. As recognized by the Guerrero court, if Martin’s
conduct violated FDUTPA and caused damage to Plaintiffs, then they have an adequate
remedy under Florida law. See Guerrero, 889 F, Supp, 2d at 1356, And, nowhere in count10
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TH do Plaintiffs allege that they have an inadequate remedy at law, which further supports,
dismissal. See id.
In addition to the forgoing, Plaintiffs also specifically allege that Lotto and Martin
unjustly enriched themselves through the “enforcement of illegal contracts.” Compl. at §
193. Irrespective of whether the court disregards Plaintiffs’ allegations that the contracts
were “illegal” or whether the court assumes the truth of the allegation for purposes of this
motion, the result is still the same and dismissal is, nonetheless, sill required. To be sure, the
allegation that the contracts were illegal is merely a legal conclusion that is not entitled to be
assumed true. Stripping the allegation of its hyperbole would mean that there is an express
contract, which bars unjust enrichment claims in equity. See Fulton, 189 So. 3d at 969.
And on the other hand, if the court affords the allegation the benefit of truth, and
thereby finds at this stage that the contracts were illegal, then the doctrine of in pari delicto
bars the claim, again.” Stermer v. Credit Exch. Corp., No. 09-60223-CIV-ZLOCH, 2009 WL
1203928, at *1 (S.D. Fla, May 1, 2009). The doctrine prohibits plaintiffs from recovering
based on their own wrongdoing. Jd. (citing O ‘Halloran v. PricewaterhouseCoopers LLP.
969 So. 2d 1039, 1044 (Fla, 2d DCA 2007). Under Florida law, “[w]hen a plaintiff and
defendant ‘are in pari delicto the law will leave them where it finds them; relief will be
This also presents yet another problem for Plaintiffs, Ifthe court were to find thatthe contracts were illegal,
then count IIT would be an alleged illegal gambling claim in disguise, masquerading as an equity claim. The
fact that count II is captioned as unjust enrichment is irelevant because courts routinely seck to determine if
pleaders are camouflaging claims to bring impermissible claims. See, e.¢..Jn re Wellbutrin XL Antitrust Litg.,
260 F.R.D. 143, 162 (E.D. Pa, 2009) (dismissing antitrust claims disguised as Tlinois Consumer Protection
Statute claims); Bass Angler Sportsman Soc. v. U.S. Steel Corp., 324F. Supp. 412, 415 (SD. Ala.), afd sub
nom. Bass Anglers Sportsman Soc. of Am., Ine. v. Koppers Co., 447 F.2d 1304 (Sth Cir, 1971) (dismissing qui
tam claim that was a disguised effort to enforce a criminal statute). There is no private right of action under
Florida's gambling statute. See §§ $49.14, $49.08, $49.11, Fla. Stat, And PlaintffS may not make an end-run
around the Florida Statutes as private citizens, in an effort to act as the de facto Florida Attorney General10
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refused in the courts because of public interest.”” Siermer, 2009 WL 1203928, at *1 (citing
Patterson v. Law Office of Lauri J. Goldstein, P.A., 980 So.2d 1234, 1237 (Fla. 4th DCA
2008). Significantly, this doctrine has been applied by courts in the context of alleged
gambling. See, e.g., Major League Baseball Properties, Inc. v. Price, 105 F. Supp. 24 46, 53
(E.D.N.Y. 2000) (“At common law, ‘persons gambling together were considered in pari
delicto and the law left them to their own remedies[.]). The doctrine applies here because
Plaintifis—all twenty-three of them—specifically allege that they “gambled” on Lotto’s
website. Florida law simply does not allow Plaintiffs to allege participation in illegal
conduct and then recover on that same basis. Stermer, 2009 WL 1203928, at "I. Asa result,
count IIT is due to be dismissed under any of the reasons stated above.
"| Plaintiffs Have Not Pled Count IV For Fraud And Misrepresentation
With Particularity, Nor Do They Allege An Actionable Duty To Disclose.
Plaintiffs’ allegations of fraud and misrepresentation are grossly inadequate to meet
the heightened pleading standards of the Florida Rules of Civil Procedure for these types of
claims. See Fla. R. Civ. P. 1.120(b), (£) (stating that all averments of fraud must be alleged
with particularity and that averments of time and place are material to the claim); see also
Parra de Rey v. Rey, 114 So. 34 371, 386 (Fla, 3d DCA 2013) (confirming that fraud must be
pled with particularity and must specifically identify misrepresentations or omissions of fact,
as well as the time, place or manner in which they were made), Morgan v. W.R. Grace &
Co.--Conn., 779 So. 2d 503, 506 (Fla. 2d DCA 2000) (finding that a trial court correctly
dismissed both fraud and misrepresentation claims for failure to satisfy Rule 1.120).
“The essential elements of a fraud claim are: (1) a false statement concerning a
specific material fact; (2) the maker’s knowledge that the representation is false, (3) an10
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intention that the representation induces another's reliance; and (4) consequent injury by the
other party acting in reliance on the representation.” Lopez-Infante v. Union Cent. Life Ins.
Co., 809 So. 2d 13, 15 (Fla. 3d DCA 2002).
Fraud and misrepresentation can also be based on an omission, rather than a statement
concerning a material fact. See Philip Morris USA, Inc. v. Naugle, 103 So, 34 944, 946 (Fla.
4th DCA 2012). But for fraud by omission to be actionable, there must be a legal duty to
disclose, through a “confidential, contractual, or fiduciary relationship.” TransPetrol, Lid. v.
Radulovic, 764 So. 24 878, 880 (Fla. 4th DCA 2000); see also Behrman v. Allstate Ins. Co.,
388 F. Supp. 2d 1346 (S.D. Fla. 2005) (recognizing that under Florida law omissions are not
actionable as fraudulent misrepresentations unless the party omitting the information owes a
ing the information and that where plaintiff failed to
duty of disclosure to the party recei
allege a fiduciary or other confidential or contractual relationship of trust with defendants or
that it was the weaker party in the transaction its claims for fraudulent and negligent
isrepresentation should be dismissed).
Under Florida law, there is no duty to disclose in arms-length transactions, as here,
because “in such a relationship there is no duty to act for the benefit or protection of the other
party or to disclose facts that the other party could by its own diligence have discovered.”
Advisor's Capital Investments, Ine, v, Cumberland Cas, & Sur. Co., No.
805
‘404T23MAP, 2007 WL 220189, at *3 (M.D. Fla. Jan. 26, 2007) (citing Maxwell v.
First United Bank, 782 80. 2d 931, 934 (Fla, 4th DCA 2001)
Plaintiffs have not, and cannot, plead the requisite elements of a fraud clai
against
Lotto and Martin because none exists, Nowhere in the complaint do Plaintiffs allege that10
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Lotto and Martin had a duty to disclose anything to Plaintiffs, nor are there any allegations
suggesting that Lotto and Martin had a fiduciary, contractual, or confidential relationship
with PlaintiffS. To properly put this issue in perspective, the court should be mindful that
Plaintiffs have alleged—without identifying which Plai
ifTs—that they viewed certain
videos on YouTube, which then caused them to begin playing games on Lotto. Thus, by
default, Plaintiffs admit that at the time they may have saw any of the YouTube videos, they
had no relationship at all with Lotto and Martin, much less a fiduciary, contractual, or
confidential relationship.
Even setting aside this fatal deficiency, Plaintiffs’ fraud and misrepresentation claims
‘would still fail because they have not satisfied the heightened pleading standard of Rule
1.120, For example, Plaintiffs do not allege which of them, if any, actually saw Martin’s
‘YouTube videos, and on what dates, which undercuts any reliance any Plaintiffs may have
placed on the videos. And curiously, Plaintiffs allege that Lotto and Martin committed fraud
because they “represented that Plaintiffs and the public could win large sums of money,”
Compl. at 199, yet PlaintiffS do not, and cannot, allege that they and the “public” did not all
have the same random chance of winning any games on Lotto’s website. Plaintiffs also do
not even allege that Martin, as an owner, actually did manipulate any game play, only that he
was “able” to decide game outcomes solely because he is an owner of Lotto, Asa result of
the foregoing, Plaintiffs, instead of pleading with the requisite particularity, are relying on a
series of innuendoes. Itis not this court’s responsibility to sift through Plaintiffs fraud
allegations and parse together a viable claim. Count IV must be dismissed.10
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DATED this 20th day of January, 2017
WHEREFORE, Defendants, CSGO LOTTO, INC. and TREVOR A. MARTIN,
pursuant to Fla, R. Civ. P. 1.140(b), seek the entry of an order dismissing counts II, III, and
IV of the complaint, and any such further relief as the court deems just and proper
Respectfully submitted,
s/ Coleman W. Watson
Coleman W. Watson, Esq.
Florida Bar. No, 0087288
fornia Bar No, 266015
Georgia Bar No. 317133
New York Bar No. 4850004
Email: coleman@watsonllp com
docketing@watsonllp.com
WATSON LLP
189 S, Orange Avenue, Suite 810
Orlando, FL 32801
T: 407.377.6634
F: 407.377.6688
Attorneys for Defendants,
CSGOLOTTO, INC. and TREVOR A
MARTIN10
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on January 20, 2017, pursuant to Fla. R. Jud. Admin.
2.516, Lelectronically filed the foregoing with the Clerk of the Court by using the Florida
Courts E-Filing Portal which will send a Notice of Electronic Filing and copy to the
following:
John A. Yanchunis, Esq.
Morgan & Morgan, Complex Litigation Group
201 North Franklin Street, 7" Floor
Tampa, FL 33602
jyanchunis@forthepeople.com
s/ Coleman W. Watson
‘Coleman W. Watson, Esq.