Olson v. Major League Baseball, 29 F.4th 59

Background

DraftKings operated daily fantasy baseball contests (MLB DFS); MLB and MLBAM had an investment/marketing partnership with DraftKings and co-branded contests.
Plaintiffs are five fantasy players who paid entry fees and allege they relied on representations that contests were "games/contests of skill" based on fair player statistics.
Plaintiffs allege that the Astros, Red Sox (and possibly others) engaged in electronic sign‑stealing during 2017–2019, corrupting player statistics, and that MLB concealed or downplayed those violations to protect its interests in DraftKings.
Causes of action: common‑law fraud (affirmative and omission), negligent misrepresentation, violations of various state consumer‑protection statutes, and unjust enrichment; proposed nationwide class and state subclasses.
The district court dismissed the First Amended Complaint (FAC) without leave to amend and denied reconsideration and leave to file a proposed Second Amended Complaint (SAC); it also ordered a September 14, 2017 MLB letter to the Yankees unsealed with redactions.
The Second Circuit affirmed dismissal (holding plaintiffs failed to plead actual/justifiable reliance, actionable omissions, or a plausible consumer‑protection or unjust‑enrichment claim) and affirmed the unsealing order.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are statements that MLB DFS are "games/contests of skill" actionable misrepresentations?	Those statements were false because electronic sign‑stealing converted contests into chance, negating contestant skill.	The UIGEA "skill" reference concerns contestants' lineup selection skill; the presence of real‑world variables (including cheating) does not negate contestant skill and the statements are non‑actionable opinion/puffery.	Not actionable; statements concern opinion/contestant skill and are not rendered false by sign‑stealing.
Are affirmative statements about MLB integrity and team/player denials actionable and did plaintiffs reasonably rely?	MLB and teams publicly reassured integrity; plaintiffs say they relied on those statements in paying to play.	Plaintiffs did not plead that named plaintiffs actually saw/relied on specific statements; reliance would be unreasonable because sports inherently involve unpredictability and rule violations.	Dismissed for failure to plead actual and justifiable reliance; generalized integrity statements are immaterial/puffery.
Do defendants have a duty to disclose sign‑stealing (fraud by omission)?	MLB had a duty (based on its business relationship with DraftKings and because reliable statistics are "basic" to the transaction) to disclose misconduct that corrupted statistics.	No duty: contestants contracted with DraftKings, not MLB; undisclosed on‑field variables are not "basic" facts that give rise to a disclosure duty under Restatement §551.	No duty to disclose; alleged omissions are not "basic" to the transaction and would create unmanageably broad exposure.
Do state consumer‑protection statutes or unjust‑enrichment doctrines support relief?	Concealing corrupted statistics and marketing contests was an unfair/deceptive practice; MLB unjustly benefited from entry fees and promotional ties.	No deceptive practice because reasonable consumers would not be misled about the possibility of rule violations; plaintiffs received the contest they contracted for.	Claims dismissed: allegations do not show a deceptive/unfair practice a reasonable consumer could rely on, and unjust enrichment is not plausibly shown.
Should the September 14, 2017 "Yankees Letter" remain sealed? (cross‑appeal)	(MLB/Yankees) Letter is confidential internal investigation material; public disclosure would harm privacy/cooperation.	(Plaintiffs) Letter was submitted and relied on in reconsideration; the public has a presumptive right of access to judicial documents.	Unsealing affirmed with redactions. The letter was a judicial document, the presumption of access was strong, and MLB had already disclosed much of the substance; privacy interests did not overcome the presumption.

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard governs dismissal under Rule 12(b)(6))
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a plausible claim to survive dismissal)
In re Pacquiao-Mayweather Boxing Match Pay-Per-View Litig., 942 F.3d 1160 (9th Cir. 2019) (claims by disappointed sports consumers/fans based on alleged concealment or poor performance dismissed)
Mayer v. Belichick, 605 F.3d 223 (3d Cir. 2010) (ticket‑holder fraud claims arising from on‑field misconduct rejected; reliance unreasonable)
Bowers v. Fédération Internationale de l'Automobile, 489 F.3d 316 (7th Cir. 2007) (promotional representations about sporting events do not give rise to reasonable reliance for disappointed fans)
United States v. Amodeo, 71 F.3d 1044 (2d Cir. 1995) (framework for public access to judicial documents and balancing test)
Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110 (2d Cir. 2006) (weight of public‑access presumption depends on document’s role in judicial function)
Brown v. Maxwell, 929 F.3d 41 (2d Cir. 2019) (documents that could influence court rulings are judicial documents entitled to public access)
City of Pontiac Policemen’s & Firemen’s Ret. Sys. v. UBS AG, 752 F.3d 173 (2d Cir. 2014) (generalized statements about integrity are immaterial)