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Parnell v. FanDuel, Inc.

Supreme Court of Arkansas

December 19, 2019

CHAD PARNELL, AN ARKANSAS CITIZEN ON BEHALF OF HIMSELF AND ALL OTHER ARKANSAS CITIZENS SIMILARLY SITUATED APPELLANT
v.
FANDUEL, INC. APPELLEE

          APPEAL FROM THE GARLAND COUNTY CIRCUIT COURT [NO. 26CV-17-639] HONORABLE LYNN WILLIAMS, JUDGE.

          Steel, Wright, Gray, by: Scott Poynter, of Counsel, and Nate Steel, for appellant.

          Friday, Eldredge & Clark, LLP, by: William A. Waddell, Jr., for appellee.

          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 account. Parnell alleged violations of the ADTPA and unjust enrichment on behalf of himself and the putative class. Parnell submitted the following proposed class definition:

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 ADTPA passed by the General Assembly in 2017. The amendment, then House Bill 1742, made two alterations to the existing law pertinent to this case. First, it changed the remedy available to civil litigants to the recovery of their "actual financial loss." Second, the amendment prohibited private class actions under the ADTPA. 2019 Ark. Acts 986, §§ 2, 3. In its motion to dismiss, FanDuel argued that Parnell's complaint failed to allege an actual loss and also that the class allegations could no longer be maintained under the amended ADTPA. The circuit court agreed with FanDuel and dismissed both Parnell's complaint and the class allegations.

         II. Standard of Review and Applicable Law

         In reviewing a circuit court's decision on a motion to dismiss under Ark. R. Civ. P. 12(b)(6), this court treats the facts alleged in the complaint as true and views them in the light most favorable to the party who filed the complaint. Travelers Cas. & Sur. Co. of Am. v. Ark. State Highway Comm'n, 353 Ark. 721, 120 S.W.3d 50 (2003). In testing the sufficiency of the complaint on a motion to dismiss, all reasonable inferences must be resolved in favor of the complaint, and the pleadings are to be liberally construed. Id. However, Arkansas law requires fact pleading, and a complaint must state facts, not mere conclusions, in order to entitle the pleader to relief. Id.

         This court has previously articulated that class-action cases may be dismissed at the pleading stage prior to class certification on an Ark. R. Civ. P. 12(b)(6) motion to dismiss for failure to state facts upon which relief can be granted. See Speights v. Stewart Title Guar. Co., 358 Ark. 59, 65-A, 186 S.W.3d 715 (2004) (supplemental opinion on denial of rehearing); Kersten v. State Farm Mut. Auto. Ins. Co., 2013 Ark. 124, at 1-2, 426 S.W.3d 455, 457. Further, Rule 23(b) calls for the circuit court to determine whether a case can be maintained as a class action "[a]t an early practicable time after the commencement of an action." Ark. R. Civ. P. 23(b).

         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 ...


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