591 S.W.3d 315
Ark.2019Background
- Parnell opened a FanDuel account after seeing advertisements promising to "match" a $200 deposit with $200 from FanDuel, and alleges he did not receive the match.
- He filed a putative class action in Garland County asserting violations of the Arkansas Deceptive Trade Practices Act (ADTPA) and unjust enrichment on behalf of Arkansas depositors who deposited $200 during Aug. 1–Dec. 31, 2015.
- FanDuel moved to dismiss, arguing the 2017 amendment to the ADTPA (requiring "actual financial loss" and prohibiting private class actions) precludes Parnell’s claims; it also argued the complaint failed to allege any actual loss.
- The circuit court dismissed Parnell’s complaint and the class allegations; Parnell appealed to the Arkansas Supreme Court.
- The Supreme Court affirmed: Parnell failed to plead an "actual damage or injury" under the ADTPA (even under pre-amendment law) and did not plead facts supporting unjust enrichment; dismissal and denial of class relief were affirmed.
- Justice Hart dissented, arguing the complaint sufficiently alleged cognizable harm (the lost matching funds and potential withdrawal limitations in FanDuel’s Terms of Use) and should survive a Rule 12(b)(6) motion.
Issues
| Issue | Plaintiff's Argument (Parnell) | Defendant's Argument (FanDuel) | Held |
|---|---|---|---|
| Whether the complaint alleges the "actual damage or injury" required by the ADTPA | Failure to receive the promised $200 match and the $200 deposit made in reliance are concrete financial injuries | No specific financial loss alleged; plaintiff received the ability to play and does not allege loss or inability to access funds | Complaint fails to allege actual injury; dismissal affirmed |
| Whether the 2017 ADTPA amendment ("actual financial loss" + ban on private class actions) bars the suit or class | Amendment not retroactive to bar Parnell’s pre-amendment-filed complaint | Amendment eliminates class actions and requires actual financial loss | Court did not decide retroactivity; unnecessary because complaint fails under pre-amendment standard; class allegations dismissed |
| Whether a benefit-of-the-bargain or diminution-in-value theory states an ADTPA injury | Loss of the promised matching funds is loss of the expected benefit | Plaintiff only alleges diminution in account value; diminution-only claims are not cognizable under ADTPA | Wallis controls: diminution-only/ speculative losses are not actionable; plaintiff’s theory insufficient |
| Whether unjust enrichment is adequately pleaded | FanDuel was unjustly enriched by retaining deposits while not providing the advertised match | No allegation FanDuel retained funds or prevented withdrawal; no facts showing unjust enrichment | Unjust-enrichment claim fails for lack of factual allegation that FanDuel was unjustly enriched |
Key Cases Cited
- Wallis v. Ford Motor Co., 362 Ark. 317 (2005) (ADTPA: diminution in value alone is not a cognizable private claim)
- McKinney v. City of El Dorado, 308 Ark. 284 (1992) (conclusory allegations are insufficient to state a prima facie cause of action)
- Skalla v. Canepari, 2013 Ark. 415 (2013) (to state an ADTPA claim a plaintiff must allege a deceptive consumer-oriented act and resulting injury)
- Servewell Plumbing, LLC v. Summit Contractors, Inc., 362 Ark. 598 (2005) (explaining the unjust-enrichment doctrine and its elements)
- Speights v. Stewart Title Guar. Co., 358 Ark. 59 (2004) (class actions may be dismissed at the pleading stage under Ark. R. Civ. P. 12(b)(6))