CHAD PARNELL, AN ARKANSAS CITIZEN ON BEHALF OF HIMSELF AND ALL OTHER ARKANSAS CITIZENS SIMILARLY SITUATED v. FANDUEL, INC.
No. CV-18-928
SUPREME COURT OF ARKANSAS
December 19, 2019
2019 Ark. 412
APPEAL FROM THE GARLAND COUNTY CIRCUIT COURT [NO. 26CV-17-639]; HONORABLE LYNN WILLIAMS, JUDGE
SHAWN A. WOMACK, Associate Justice
Appellant Chad Parnell filed a class-action lawsuit against FanDuel, Inc., in the Garland County Circuit Court, alleging violations of the Arkansas Deceptive Trade Practices Act (ADTPA) and unjust enrichment on behalf of himself and the putative class. The circuit court dismissed Parnell’s complaint and the class-action allegations. We affirm.
I. Background
Parnell opened an account with FanDuel, which offers Internet-based fantasy sports games on its website, fanduel.com. On June 22, 2017, Parnell filed a class-action lawsuit in the circuit court alleging that FanDuel ran a series of advertisements promoting its fantasy sports games, which informed new subscribers that if they deposited $200 into their account, FanDuel would match their deposit with $200. In his complaint, Parnell alleged that this advertising was illegal because FanDuel did not match his $200 deposit when he opened his
All citizens of the State of Arkansas that subscribed to FanDuel’s service by opening an account with a sum of $200.00 from August 1, 2015, to December 31, 2015 (the “Class Period”). Excluded from the Class are the presiding judge, and his/her immediate family members, and Defendant’s officers, directors, employees, and agents.
FanDuel subsequently moved to dismiss the action based upon an amendment to the
II. Standard of Review and Applicable Law
In reviewing a circuit court’s decision on a motion to dismiss under
This court has previously articulated that class-action cases may be dismissed at the pleading stage prior to class certification on an
III. Discussion
Parnell argues that but for FanDuel’s advertisements of matching deposits, he would not have created a FanDuel account and deposited $200. As such, he did not receive the benefit of their bargain and lost $200 by taking FanDuel’s bait. Because Parnell pled that he was deceived by FanDuel’s advertised promise to match $200 deposits with another $200 and did not receive the promised match, he contends he pled cognizable injuries.
Arkansas’s rules of civil procedure make clear that a pleading which sets forth a claim for relief must contain a statement in ordinary and concise language with facts showing that the pleader is entitled to relief.
The
In this case, it is not necessary to determine whether the amended provision of the
On appeal, Parnell attempts to reframe his claim as a failure to receive the “benefit of the bargain.” In support of its argument that Parnell failed to allege any actionable injury, FanDuel cites Wallis v. Ford Motor Co., where this court discussed benefit-of-the-bargain damages under the
In Wallis, the plaintiff sued under the
ADTPA alleging that the manufacturer of an SUV concealed a design defect, which led him to purchase the vehicle at a price in excess of its actual value. The plaintiff did not allege personal injury or property damage, nor did he claim that the SUV malfunctioned in any way. The Supreme Court of Arkansas held that “actual damage or injury [under the ADTPA] is sustained when the product has actually malfunctioned or the defect has manifested itself. Where the only injury is the diminution in value of the product, a private cause of action is not cognizable under the ADTPA.” Wallis, 36[2] Ark. at 328, 208 S.W.3d at 161.
In Wallis, the plaintiff could not prove that he did not receive the vehicle he bargained for because the vehicle had not malfunctioned. Unlike the plaintiff in Wallis, who suffered a purely pecuniary loss, M.S. is not alleging that it purchased a product with less economic value than represented by the seller. Instead, M.S. claims that it paid for a product that was not at all what USP represented––that is, an advertisement sold on behalf of ATU. The Court finds that M.S. has alleged sufficient facts to satisfy the ADTPA’s actual damage requirement.
2008 U.S. Dist. LEXIS 4159, at *9–10. Meanwhile, the court in Burns found the plaintiff alleged actual property damage to his vehicle, unlike in Wallis, and therefore the action was cognizable under the
Neither M.S. Wholesale nor Burns supports Parnell’s contention that he has pled an actionable injury––if anything, these cases further undermine his position. Parnell deposited $200 into his FanDuel account for the ability to enter that money into fantasy sports games; this was Parnell’s actual “benefit of the bargain,” and he does not argue that he was denied this benefit. Instead, he claims his FanDuel account had less economic value than represented by FanDuel. But as the courts in Wallis, M.S. Wholesale, and Burns make clear, a speculative injury is not cognizable under the
As a final matter, we address Parnell’s unjust-enrichment claim against FanDuel. This claim fails because Parnell has not actually alleged FanDuel was unjustly enriched. Unjust enrichment is an equitable doctrine that stands for the principle that one party should not be permitted to unjustly enrich themselves at the expense of another but should be required to make restitution for the benefits received. Servewell Plumbing, LLC v. Summit Contractors, Inc., 362 Ark. 598, 612, 210 S.W.3d 101, 122 (2005). As discussed above, Parnell makes no
Affirmed.
HART, J., dissents.
JOSEPHINE LINKER HART, Justice, dissenting.
I dissent. In short, Parnell has pled a cognizable harm.
In reviewing a motion to dismiss pursuant to
The simple substance of Parnell’s complaint is as follows: (1) FanDuel, Inc. (FanDuel), advertised that if someone signs up to play fantasy sports games on fanduel.com and makes an initial deposit of $200 into his or her FanDuel betting account, FanDuel would “match” that deposit with $200 of its own; (2) Parnell saw this advertisement and, in response, signed up on FanDuel’s website and deposited $200 into his betting account; and (3) FanDuel then failed to match his $200 deposit. The bottom line of the majority’s opinion is that Parnell has failed to allege “actual damages” and that his complaint is therefore subject to dismissal pursuant to
The majority’s reliance upon Wallis v. Ford Motor Co. is misplaced. In Wallis, the plaintiff had filed an Arkansas Deceptive Trade Practices Act (ADTPA) claim alleging that a vehicle manufacturer concealed a design defect, which led the plaintiff to purchase the vehicle when the plaintiff would not have purchased the vehicle had the defect been disclosed. 362 Ark. 317, 208 S.W.3d 153 (2005). The plaintiff did not allege any personal injury or property damage or that the vehicle had ever malfunctioned. Id. at 318, 208 S.W.3d at 154. This court held, “Where the only injury is the diminution in the value of the product, a private cause of action is not cognizable under the ADTPA.” Id. at 328, 208 S.W.3d at 161.
The majority concludes that Parnell’s complaint, or at least his claim for unjust enrichment, is illegitimate due to his failure to allege that he was prevented from withdrawing the $200 after it was deposited. Without addressing whether a separate prior attempt to recover the thing of value is a necessary requisite to legal claim for unjust enrichment, I note that the majority’s conclusion ignores the plain language of FanDuel’s “Terms of Use.” In section “5. Game Rules,” regarding “Withdrawals Generally,” the “Terms of Use” provide that “[i]n cases where you have received a bonus or other benefits as a result of your deposit,” such as the advertised matching benefit that Parnell contends he was entitled to for his $200 deposit, “and have not yet played through the deposit (entering contests whose total entry fees equal the value of the deposit), FanDuel reserves the right to
In short, Parnell’s complaint is sufficient to defeat a
Accordingly, I dissent.
Steel, Wright, Gray, by: Scott Poynter, of Counsel, and Nate Steel, for appellant.
Friday, Eldredge & Clark, LLP, by: William A. Waddell, Jr., for appellee.