Fair Gaming Advocates Ga. v. VGW Holdings Ltd.

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FAIR GAMING ADVOCATES GEORGIA INC., Plaintiff, v. VGW HOLDINGS LIMITED, et al., Defendants.

Civil Action No. 1:24-CV-00901-TWT

United States District Court, N.D. Georgia, Atlanta Division

December 13, 2024

OPINION AND ORDER

THOMAS W. THRASH, JR. UNITED STATES DISTRICT JUDGE

This is a putative class action case. It is before the Court on the Defendants' Motion to Compel Arbitration [Doc. 5] and Motion to Dismiss [Doc. 6], and the Plaintiff's Motion to Remand [Doc. 15], and Motion for Leave to File Supplemental Authority [Doc. 23]. For the reasons set forth below, the Defendants' Motion to Compel Arbitration [Doc. 5] is DENIED as moot and their Motion to Dismiss [Doc. 6] is GRANTED for lack of personal jurisdiction. The Plaintiff's Motion for Leave to File Supplemental Authority [Doc. 23] is GRANTED and its Motion to Remand [Doc 15] is DENIED.

I. Background

This case arises from the Defendants' operation of certain internet-based, casino-themed online games. (Compl ¶¶ 12-13). The Plaintiff, a corporation, claims that the games violate a Georgia law that prohibits casino gambling and seeks recovery of the losses Georgia citizens sustained playing the games for a period of four years prior to the filing of the Complaint, excluding the six months immediately preceding that filing. (Id. ¶¶ 14-16, 61, 85-86, 90 & at 38-39). The law provides that:

Money paid or property delivered upon a gambling consideration may be recovered from the winner by the loser by institution of an action for the same within six months after the loss and, after the expiration of that time, by institution of an action by any person, at any time within four years, for the joint use of himself and the educational fund of the county.

O.C.G.A. § 13-8-3(b). As relevant to the present motions, the Plaintiff alleges that the Defendants' casino gaming websites were accessible to Georgians via the internet. (Id. ¶ 19). The Defendants do not have any offices or employees in Georgia except for two, non-executive employees who live in Georgia and work remotely. (Thunder Decl. II [Doc. 6-2] ¶ 7).

The Plaintiff originally filed this action in the Superior Court of Fulton County and the Defendants removed the action to this Court on February 28, 2024. (Not. of Removal). The Defendants have moved to compel arbitration and to dismiss for lack of personal jurisdiction and failure to state a claim. [Docs. 5, 6]. The Plaintiff has moved to remand this action to the Superior Court of Fulton County. [Doc. 15].

II. Legal Standards

Federal courts are courts of limited jurisdiction; they may only hear cases that the Constitution and Congress have authorized them to hear. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). An action originally brought in state court may be removed by a defendant to federal court when the action satisfies the constitutional and statutory requirements for original federal jurisdiction. See 28 U.S.C. § 1441(a). Because of the limited authority of federal courts, “removal statutes are construed narrowly; where plaintiff and defendant clash about jurisdiction, uncertainties are resolved in favor of remand.” Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). When no federal question exists, diversity jurisdiction can be invoked where there is complete diversity among the parties and the amount in controversy exceeds $75,000 under 28 U.S.C. 1332(a), or where the class action jurisdictional standards are met under 28 U.S.C. 1332(d).

On a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2), “the plaintiff has the burden of establishing a prima facie case by presenting enough evidence to withstand a motion for directed verdict.” United States ex rel. Bibby v. Mortgage Invs. Corp., 987 F.3d 1340, 1356 (11th Cir. 2021). In evaluating a plaintiff's case, “[t]he district court must construe the allegations in the complaint as true, to the extent they are uncontroverted by defendant's affidavits or deposition testimony.” Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988). Where the defendant contests the allegations in the complaint through affidavits, “the burden shifts back to the plaintiff to produce evidence supporting personal jurisdiction, unless the defendant's affidavits contain only conclusory assertions that the defendant is not subject to jurisdiction.” Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 1357, 1360 (11th Cir. 2006).

“And where the evidence presented by the parties' affidavits and deposition testimony conflicts, the court must draw all reasonable inferences in the plaintiff's favor.” Mortgage Invs., 987 F.3d at 1356 (quotation marks omitted).

III. Discussion

A. Remand^[1]

The Plaintiff moves to remand this action on the ground that the Court lacks subject matter jurisdiction over its claims, first because it has not suffered an injury in fact. (Pl.'s Mot. to Remand, at 4-6). Second, the Plaintiff asserts that the Defendants have argued in their Motion to Dismiss that the Plaintiff is permitted to sue only for one Georgia resident's gambling losses and that the Defendants failed to submit evidence showing that a single Georgia resident lost or spent more than $75,000 playing the Defendants' online games. (Id. at 6-9).^[2]

The Defendants respond that the amount in controversy requirement is plainly satisfied, as evidenced by a declaration they submitted of Defendant VGW Holdings Ltd.'s general counsel that the amount of in-game expenditures by Georgia players during the relevant time period exceeds $150,000. (Defs.' Resp. in Opp. to Mot. to Remand, at 6); (Thunder Decl. I [Doc. 1-1] ¶¶ 11-13). In response to the Plaintiff's challenge to the Defendants' Motion to Dismiss arguments, the Defendants assert that courts only consider the amount a plaintiff has placed in controversy without regard to whether the plaintiff is likely to recover that amount. (Id. at 6-7). To the extent the Plaintiff asserts that the Defendants argued in their Motion to Dismiss that the Plaintiff lacks Article III standing, the Defendants contend that they did not raise such an argument. (Id. at 8-10).

While neither party disputes that the parties here are diverse, the Court confirms that diversity exists here. The Plaintiff is a Georgia corporation with its principal place of business in Georgia, VGW Holdings is an Australian company with its principal place of business there, VGW Luckyland is a Delaware corporation with its principal place of business there, and VGW Malta and VGW GP are Maltese companies with their principal places of business in Malta and with Australian membership. (See Not. of Removal ¶¶ 14-23). The Court also finds the amount in controversy requirement to be met here. In its Complaint, the Plaintiff alleges that it seeks recovery of “the monetary losses incurred by citizens of the state of Georgia for the last 4 years, excepting the 6 months immediately preceding the filing of this complaint.” (Compl. at 38-39). The Defendants submitted evidence that, based on their records, that amount exceeds $150,000, and the Plaintiff has not rebutted that figure. (Thunder Decl. I ¶¶ 11-13).

As to the Plaintiff's argument regarding the Defendants' challenge in their Motion to Dismiss to the Plaintiff's ability to pursue a mass recovery action, the amount in controversy inquiry does not take into consideration the amounts the Plaintiff is likely to recover or arguments to that end. See Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 751 (11th Cir. 2010) (“[T]he plaintiffs' likelihood of success on the merits is largely irrelevant to the court's jurisdiction because the pertinent question is what is in controversy in the case, not how much the plaintiffs are ultimately likely to recover.” (quotation marks and citation omitted)). This is because the amount in controversy inquiry “focuses on how much is in controversy at the time of removal, not later.” Id. Therefore, the Defendants' evidence that the amount the Plaintiff seeks to recover exceeds $150,000 is sufficient to establish that the amount in controversy requirement is satisfied here. See 28 U.S.C. § 1332(a), 1441(a). Finally, the Plaintiff's arguments as to the Defendants' Motion to Dismiss regarding standing are misplaced. As the Defendants concede, they have not raised a standing argument. Instead, the Defendants' argument goes to considerations of fairness to the parties in exercising personal jurisdiction over the Defendants and may go to the Plaintiff's ability to state a claim under O.C.G.A. § 13-8-3(b), neither of which are relevant to the question of whether this action was properly removed to this Court. Therefore, because the Court has original diversity jurisdiction over this action, see 28 U.S.C. § 1441(a), it was properly removed to this Court and the Plaintiff's Motion to Remand [Doc. 15] will be denied.

B. Motion to Dismiss

The Defendants move to dismiss this action under Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure. In short, they argue under Rule 12(b)(2) that the Court lacks personal jurisdiction over them because they are not Georgia residents, and they lack sufficient minimum contacts with the state to be considered “at home” here. (Def.'s Mot. to Dismiss, at 5-7). As to specific jurisdiction, the Defendants argue that they have not “purposefully availed themselves of the privilege of conducting business in Georgia” and that considerations of fairness and justice weigh against a finding of personal jurisdiction. (Id. at 7-15). Under Rule 12(b)(6) they argue that even if the Court does have personal jurisdiction over them, the Plaintiff fails to state its claim under O.C.G.A. § 13-8-3(b) because that statute does not grant the Plaintiff a mass right of...