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Kater v. Churchill Downs Inc.

United States District Court, W.D. Washington, Tacoma

November 19, 2019

CHERYL KATER and SUZIE KELLY, individually and on behalf of all others similarly situated, Plaintiffs,
v.
CHURCHILL DOWNS INCORPORATED, a Kentucky corporation, and BIG FISH GAMES, INC., a Washington corporation, Defendants. MANASA THIMMEGOWDA, individually and on behalf of all others similarly situated, Plaintiff,
v.
BIG FISH GAMES, INC., a Washington corporation; ARISTOCRAT TECHNOLOGIES INC., a Nevada corporation; ARISTOCRAT LEISURE LIMITED, an Australian corporation; and CHURCHILL DOWNS INCORPORATED, a Kentucky corporation, Defendants.

          ORDER ON TEMPORARY RESTRAINING ORDER AND LIMITED RELIEF FROM LITIGATION STAY

          Ronald B. Leighton United States District Judge.

         I. INTRODUCTION

         THIS MATTER is before the Court on Plaintiffs' Motions for Temporary Restraining Order and Limited Relief from Litigation Stay [Dkt. #s 73 (in Thimmegowda) and 122 (in Kater]. The facts underlying these two class action lawsuits were summarized by the Ninth Circuit in Kater v. Churchill Downs Inc., 886, F.3d 784, 785-86 (9th Cir. 2018):

Big Fish Casino is a game platform that functions as a virtual casino, within which users can play various electronic casino games, such as blackjack, poker, and slots. Users can download the Big Fish Casino app free of charge, and first-time users receive a set of free chips. They then can play the games for free using the chips that come with the app, and may purchase additional chips to extend gameplay. Users also earn more chips as a reward for winning the games. If a user runs out of chips, he or she must purchase more chips to continue playing. A user can purchase more virtual chips for prices ranging from $1.99 to nearly $250.

         The only material differences between the cases are the addition of Big Fish's new owner as a defendant in Thimmegowda, and class definitions that cover different time periods. The proposed Kater class covers persons who lost purchased chips at Defendants' games before March 23, 2015, and the proposed Thimmegowda class covers persons who lost chips after that date. The pending motions are identical, and the Court will use the singular “motion” for clarity.

         The Motion to Lift the Stay for the purpose of resolving the underlying TRO motion is GRANTED. Plaintiffs' Motion for Temporary Restraining Order is GRANTED in the form of a Preliminarily Injunction limiting Defendants' dissemination of the pop-up notification regarding the Big Fish Terms of Use dated August 18, 2019 (and displayed since October 14, 2019), as described below.

         II. BACKGROUND

         On August 28, 2019, Big Fish changed the Terms of Use on its Big Fish Casino website. Before then, the game's Terms contained a generic arbitration agreement, which is the subject of pending motions in both cases. The updated Terms, however, are expressly directed at this lawsuit:

These Terms of Use dated August 28, 2019 do not apply to Cheryl Kater, Suzie Kelly, and Manasa Thimmegowda, who are named plaintiffs in class action lawsuits pending in the Western District of Washington: Kater v. Churchill Downs Inc., No. 15-cv-00612-RBL, and Thimmegowda v. Big Fish Games, Inc., No. 2:19-cv-00199-RBL. The lawsuits allege claims relating to Big Fish Casino under the Washington Recovery of Money Lost at Gambling statute, the Washington Consumer Protection Act, and Washington common law. The mandatory arbitration provision in these Terms of Use prevents you from participating in these class action lawsuits, even if a class is certified.

(https://www.bigfishgames.com/company/terms.html). The Terms do not provide information about the current status of these cases, the type of relief being sought, the Court's previous decisions about arbitration in Kater, or how to contact Plaintiffs' counsel. They do not advise players to seek their own counsel if they have questions about the Terms. The Terms include an opt-out provision, which purports to permit players to opt out of the arbitration agreement within 30 days of clicking the "I Agree" button.

         (Image Omitted)

         More than 30 days after changing the Terms (about October 14, 2019), Big Fish's games began displaying a new pop-up window. The pop-up expressly references this litigation and tells players that clicking the "I Agree" button means that they will not be permitted to participate in these lawsuits. Players cannot continue to play the game unless they click the “I Agree” button, even if they have already purchased chips. The pop-up window is depicted above.

         Defendants did not tell Plaintiffs, Plaintiffs' counsel, or the Court about the changes to the Terms of Use or the addition of the pop-up window. Nor has the Court authorized any form of class notice. In fact, both cases have been stayed, with limited exceptions, pending the Ninth Circuit's resolution of the appeal in Wilson v. Huuuge, Inc. (Kater Dkt. # 121; Thimmegowda Dkt. # 70).

         III. ...


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