In Lawsuit Over Allegedly Defective Baccarat Cards, Casino’s Damages Capped At Little More Than One Green Chip

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

The running battle between the Borgata and world renowned poker player Phil Ivey (among others) continues, and, fortunately, continues to be interesting. As I wrote about here and here, the Borgata sued Ivey and an associate, Cheng Yin Sun, after the two men won more than $9.6 million playing Baccarat at the casino. The Borgata claimed that the two men used an impermissible "edge sorting" scheme to win the money, and therefore breached their implicit contract with the casino to abide by the terms of the Casino Control Act. The scheme relied, in part on an alleged defect in the playing cards, which Ivey and Sun knew about and exploited. The Third Circuit described it as follows:

The scheme is called "edge sorting," where Sun would identify minute asymmetries on the repeating diamond pattern on the backs of the playing cards to identify certain cards' values, and would have the dealer turn those strategically important cards so that they could be distinguished from all other cards in the deck. Ivey and Sun would then be able to see the leading edge of the first card in the shoe before it was dealt, giving them 'first card knowledge,' and Ivey would bet accordingly.

The Borgata successfully moved for summary judgment against Ivey and Sun, and was awarded more than $10 million in damages.

In addition to suing the players, the casino also sued the manufacturer of the cards that were used in the edge-sorting scheme. Both moved for summary judgment, and both motions were initially denied without prejudice. After the district court's decision on the casino's summary judgment motion against Ivey and Sun, both renewed their motions. The district court again denied both, but in doing so, threw cold water on the casino's claims against the manufacturer, including holding that the most the casino could recover against the manufacturer was $26.88, the cost of the allegedly defective cards.

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Unenforceable Clause In Arbitration Agreement Does Not Void Agreement

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

One of my children's preschool teachers was fond of saying, "you get what you get and you don't get upset." (Not to my little angel, of course, but to other children.) In Curran v. Curran, the Appellate Division basically applied this admonition to the parties to an arbitration agreement, holding that they got what they intended out of the agreement, therefore they could not argue, after the fact, that an unenforceable provision in the agreement voided the entire agreement.

In Curran, plaintiff filed for divorce from defendant. With the advice of counsel, the parties entered into a consent order to refer all issues incident to their divorce to arbitration under the New Jersey Arbitration Act. In the consent order, the parties acknowledged that any arbitration award that was entered could only be set aside or modified by a court under the limited grounds set forth in the Arbitration Act — e.g., the award was procured by fraud, corruption, or undue means, the court found evidence of "evident partiality" by the arbitrator, the arbitrator exceeded his or her powers, etc. But the parties also included a handwritten provision, which provided: "The parties reserve their rights to appeal the arbitrator's award to the appellate division as if the matter was determined by the trial court." This is the provision that would cause all of the problems.

After the arbitrator entered a preliminary award, plaintiff requested reconsideration. The arbitrator then issued a comprehensive award setting forth his findings of fact and conclusions of law. Plaintiff filed a motion in the Law Division for an order modifying the award, citing eight alleged "mistakes of law" made by the arbitrator. Plaintiff also argued that the intent of the handwritten provision was not to allow for direct appeal to the Appellate Division, but was instead was evidence that the parties intended a more searching review of the award that what would normally be allowed under the Arbitration Act. The trial court agreed, holding that the paragraph itself was unenforceable because it purported to "create subject matter jurisdiction by agreement." The trial court noted that "[t]he authority of a court to hear and determine certain classes of cases rests solely with the Constitution and the Legislature." But the trial court agreed with plaintiff that the handwritten provision demonstrated the parties' intent to provide for "a little more review" than what would normally be allowed under the Arbitration Act. Therefore, the trial court "in essence act[ed] as the Appellate Division of the arbitrator." It performed a comprehensive review of the arbitrator's decision and affirmed the award.

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I Thought That Juror Looked Familiar!

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

What happens if you are a party in a lawsuit and you recognize one of the jurors as someone who not only knows you, but probably does not like you and may be looking for revenge? According to the Appellate Division in Rumbas v. Sony Electronics, Inc., at the very least, you bring it up before the jury returns its verdict.

In Rumbas, plaintiff claimed that a television defendant manufactured was defective and caused a fire that damaged plaintiff’s condominium unit and three other units. At the start of jury selection, the judge explained the nature of the case to the potential jurors. He then sat the first eight jurors in the jury box and explained the jury selection process. Specifically, he explained that he would be asking a series of 28 questions, each of which was “designed to elicit a negative response.” As jurors in the box were excused, they would be replaced by jurors from the panel, but the judge would not repeat the 28 questions. Instead, he would simply ask the replacement juror if his or her answer to any of them would be anything other than “no.” Therefore, the judge stressed that it was important for all jurors, not just those in the jury box at the time, to pay attention to the questions.

Early on in the selection process, while the original eight jurors were seated in the jury box, the judge asked the attorneys to introduce their clients. Plaintiff was not in the courtroom at the time. Apparently, he had to go to the pharmacy, but his attorney indicated that he would be returning soon. The judge then read a list of potential witnesses and asked if any of the jurors knew any of them. None did. During this questioning, plaintiff returned to court, at which time he was introduced to the jurors. The judge asked if any of them knew plaintiff, but none did.

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Drink Up! TGI Fridays Ducks Class Action Based On Alleged Failure To List Drink Prices On Menu

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

On a ski trip a few years back, a friend of mine decided to spend his day at a local bar instead of on the slopes. He spent the afternoon drinking with a friend and a man they met at the bar. Later in the day, the man, who had been drinking with them the whole time, said he had to go to work. He stood up, walked around to the other side of the bar, and clocked in for his shift as the bartender. He promptly gave my friend one more drink on the house, and then told him he was cut off. That is consumer fraud if you ask me. But, alas, that issue was not before the New Jersey Supreme Court in Dugan v. TGI Friday’s, Inc.

In Dugan, plaintiffs alleged that TGIF violated the New Jersey Consumer Fraud Act (CFA) and the Truth in Consumer Contract Warranty and Notice Act (TCCWNA) by (1) failing to list prices for alcoholic and non-alcoholic drinks on its menus and (2) charging different prices for the same beverage depending upon where in the restaurant the beverage was served (i.e., at the bar as opposed to at a table). Plaintiffs sought to certify a class comprised of "all customers who had purchased items from the menu that did not have a disclosed price."

The first-named plaintiff alleged in the complaint that she only "became aware of the prices [of drinks she purchased at the bar] after she had consumed the beverages and was presented with a check," and that she was "charged $2.00 for a beer at the bar and later charged $3.59 for the same beer at a table in the restaurant." She was later deposed and admitted that she did not review the menu at the bar, or review the price of the beer indicated on her receipt from the bar, or review the beverage section of the menu at the table, or review the final bill before she paid it. Rather, she testified that she reviewed the receipts when she got home and noticed the discrepancies, and also noticed that she paid a "steep" price for a soda.

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Law And The Simpsons, Lesson One: Trampolines=Potential Lawsuits

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

I know trampolines are fun, but everyone should know, thanks to The Simpsons, that they are a recipe for (legal) disaster:

Apparently some people missed this episode, as a recent decision from the Appellate Division, Panico v. Winner, demonstrates. [Note: In the second week of my first-year torts class, our professor told us that we were having a pop quiz. Being first-year law students, we all panicked. But then he shut off the lights and played this clip and we discussed all of the potential legal issues. It was a relief that it was not a quiz, but unfortunately this was the high point of my first-year torts class.]

In Panico, plaintiff was injured while jumping on a trampoline at a graduation party. The party was held at one of his classmate's homes and was attended by approximately twenty teenage guests. His classmate's mother originally planned to attend the party and serve as chaperone, but later learned that she would not be able to attend because of a work obligation. She told her daughter that she would have to cancel the party unless her daughter could convince the daughter's grandparents to attend. The daughter was able to do so. Her grandparents attended the party and, as a reward, became defendants in a lawsuit.

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