The District of Columbia Federal Court has dismissed a lawsuit filed by Zula Casino and Sportzino against two law firms, Kind Law and Ben Travis Law. It’s another development in a complex story we’ve reported on previously.
The now-failed lawsuit was brought to the DC Federal Court in response to attempts at mass arbitration by the two law firms based in Nevada and California. Via social media ads, they recruited members of the public to file arbitrations against the two sweepstakes casinos, alleging that their operations were illegal. This kind of mass arbitration is designed to cripple businesses with a sudden barrage of arbitration fees, forcing them to agree to a financial settlement with the claimants that’s ultimately cheaper.
However, it turned out portions of the claimants had never used the platforms, or some had signed up but never made any significant purchases. Of those who had signed up, some were bound to arbitration claims being made via the American Arbitration Association (AAA) in DC, while others had agreed to terms designating Canada’s ADR Chambers in Ontario as the arbitration forum.
Despite this, Kind Law and Ben Travis Law filed all arbitration claims with the AAA in San Diego, California, going against the agreed upon terms. To challenge this, Zula and Sportzino brought a lawsuit against the two law firms in DC. However, the defendant law firms filed a motion to dismiss, which was granted by the DC Federal Court. The court has essentially washed its hands of this case, citing it has no personal or subject matter jurisdiction over the case, partly because of the law firms being based in Nevada and California.
Another Case Filed, This Time in New York
We recently reported on how the two social casinos filed a separate lawsuit against Kind Law and Ben Travis Law, this time in New York. New York was chosen for the fact that some of the claimant users reside there, and the focus of this suit is accusing Kind Law and Ben Travis Law of malicious prosecution. Zula and Sportzino are seeking damages for harm to their businesses, goodwill, and reputations, along with the costs of fighting unauthorized arbitrations in federal court.
Whether this New York suit succeeds or not remains to be seen. Also, it’s still unclear whether the arbitration claims filed with the AAA in San Diego will go ahead, but this most recent development is certainly a blow for Zula and Sportzino in that regard.
Stay tuned to SweepsKings for more updates on this case, plus other stories on sweepstakes and social casino legislation.
Author: Jon Ridehalgh
Updated:
