The panel made the decision Monday in upholding the April 2020 ruling by U.S. District Judge Jed S. Rakoff to dismiss a lawsuit by fantasy sports contestants who claimed they were damaged by sign stealing in Major League Baseball.
“At its core, this action is nothing more than claims brought by disgruntled fantasy sports participants, unhappy with the effect that cheating in MLB games may have had on their level of success in fantasy sports contests,” Circuit Judge Joseph F. Bianco wrote for a panel that also included Chief Judge Debra Ann Livingston and Circuit Judge Gerard E. Lynch.
The five men who sued participated in fantasy contests hosted by DraftKings from 2017-19.
“We hold that alleged misrepresentations or omissions by organizers and participants in major league sports about the competition itself — such as statements about performance, team strategy, or rules violations — do not give rise to plausible claims sounding in fraud or related legal theories brought by consumers of a fantasy sports competition who are utilizing a league’s player statistics,” Blanco wrote.
MLB Commissioner Rob Manfred ruled in January 2020 that the Astros violated rules against electronic sign-stealing during home games en route to their World Series title in 2017 and again in 2018. He suspended manager AJ Hinch and general manager Jeff Luhnow for one season each, and both were fired by the team. Manfred fined the Astros $ 5 million, the maximum under MLB rules and stripped the team of its next two first- and second-round amateur draft picks.
Manfred fined the Red Sox in 2017 for using Apple Watches to pass along signals and fined the Yankees a lesser amount for improper use of a dugout telephone in an earlier year. He concluded in April 2020 that sign-stealing efforts by the Red Sox en route to the 2018 title were less egregious than those by the 2017 Astros. Alex Cora, who had lost his job as Boston manager, was suspended for the 2020 season for his role as Houston’s bench coach.
The fans who sued alleged Manfred’s letter “contradicted a subsequent MLB press release on the same subject,” the circuit court wrote. “Because a substantial portion of the substance of the letter has already been disclosed in the press release about the investigation issued by MLB, we conclude that the district court did not abuse its discretion in unsealing the letter, subject to redacting the names of certain individuals.”
Rakoff ruled Manfred’s letter to the Yankees should be unsealed, and the team appealed.
“The Yankees primarily contend they will suffer ‘significant and irreparable reputational harm’ not because of the actual substance of the Yankees letter, but rather because its content would be distorted to falsely and unfairly generate the confusing scenario that the Yankees had somehow violated MLB’s sign stealing rules, when in fact the Yankees did not,” Blanco wrote. “That argument, however, carries little weight. Disclosure of the document will allow the public to independently assess MLB’s conclusion regarding the internal investigation (as articulated to the Yankees), and the Yankees are fully capable of disseminating their own views regarding the actual content of the Yankees letter.”
The Yankees can ask all 13 judges of the 2nd Circuit to meet en banc to reconsider the decision.