Luck Runs Dry for 'Deal' Plaintiffs in Lawsuit Against NBC

Georgia Supreme Court rules plaintiffs misread gambling recovery statute

Alyson M. Palmer

Fulton County Daily Report

April 22, 2008

The Supreme Court of Georgia has said "no deal" to a team of Columbus lawyers representing a proposed class of people seeking to recover money they spent participating in a feature of the NBC hit show "Deal or No Deal."

The suit filed in federal court had contended that the Lucky Case Game -- in which viewers, like the contestants on "Deal or No Deal," try to pick a lucky suitcase -- ran afoul of Georgia law because participants were charged 99 cents to play through their cell phones. The plaintiffs based their suit on a colonial-era Georgia statute that allows gamblers to recover their losses through lawsuits.

Senior U.S. District Judge William C. O'Kelley, who had suggested that "probably" tens of millions of dollars were at stake in the case, had asked the state Supreme Court to help him interpret that statute.

In a unanimous opinion written by Justice Hugh P. Thompson, the state high court rejected the plaintiffs' reading of the gambling recovery statute.

"[W]e hold that O.C.G.A § 13-8-3 (b) does not authorize plaintiffs to recover from defendants the text message charges they paid to participate in the lucky case game," wrote Thompson.

In the Lucky Case Game -- which, according to NBC's Web site, is "taking a short break" -- viewers could register their picks of the right suitcase through either a text message or for free over the Internet. With prizes of $10,000 and greater, winners were chosen via random drawing from among those participants who picked the right suitcase.

To state a claim under the Georgia gambling civil recovery statute, wrote Thompson, the plaintiffs needed to allege there was a "gambling contract" supported by "gambling consideration." There was no gambling consideration here, he wrote.

A gambling contract is one in which the parties agree they will gain or lose depending upon the occurrence of an event in which they otherwise have no interest, Thompson explained. Here, said Thompson, quoting an order by O'Kelley, the 99 cent consideration of the contract between the parties "never hangs in the balance." He also cited decisions from other jurisdictions to the effect that there's not a wagering contract where the offeror of the prize has no chance of winning the prize.

Thompson wrote in a footnote that the court wasn't deciding whether the Lucky Case Game constituted an illegal lottery under Georgia's criminal code. But even if it were, he said, it wouldn't be a gambling contract under the civil recovery statute.

He cited prior Georgia appellate decisions to the effect that lotteries are excluded from the civil recovery statute. Lawyers for the plaintiffs in the Lucky Case Game case had argued that a change in the language of the civil recovery statute from "gaming consideration" to "gambling consideration" undermined prior caselaw's authority, but Thompson said the change was too "minor" to matter.

The ruling appears to put a stop to the federal lawsuit filed before O'Kelley last summer. "I believe the court's opinion marks the end of the federal lawsuit," said J. Clay Fuller of Columbus' Daughtery, Crawford, Fuller & Brown, one of the lawyers who represented the plaintiffs in the case.

Fuller said the plaintiffs' lawyers understood and accepted the ruling, although they found it disappointing. "They were dealing with some very difficult issues in that decision," he said of the justices.

Jerry A. Buchanan of the Columbus firm of Buchanan & Land made the February argument for the plaintiffs.

L. Joseph Loveland Jr. of King & Spalding, who made the winning oral argument at the Supreme Court for defendants NBC Universal, show producer Endemol USA and game administrator VeriSign, couldn't be reached for comment.

The lawsuit had alleged there are similar legal problems with games that have been televised as part of NBC's "1 vs. 100" game show, "America's Got Talent" and the Kentucky Derby and Preakness Stakes horse races, but Thompson's opinion for the court mentions only the Lucky Case Game.

Michael and Michele Hardin, Forsyth County residents who say they're regular viewers of "Deal or No Deal" and have played the Lucky Case Game multiple times, brought the suit. They sought to represent a class of Georgians who played the game from Georgia cell phone numbers -- as well as those who played other games promoted by NBC.

Georgia residents also are among the named plaintiffs in a set of cases challenging the Lucky Case Game and other TV games before a California federal judge. Atlanta lawyer William A. Pannell, who is part of the plaintiffs' team in those cases, said at least some of the proposed class members in the case decided Monday would be covered by the California cases, which include suits over "Deal or No Deal" and "1 vs. 100."

Pannell said while he hadn't read Monday's ruling, it won't affect the California cases. The plaintiffs there are basing their suits on the California Unfair Competition Law and, in some cases, Massachusetts or Connecticut law.

In some of the California cases, U.S. District Judge Florence-Marie Cooper has denied motions to dismiss filed by the defendants. Cooper has allowed the defendants to ask the 9th U.S. Circuit Court of Appeals to certify key questions in the case -- around what constitutes a lottery under California criminal law -- to the California Supreme Court.

According to Pannell, he and Atlanta lawyer Kevin T. Moore had originally filed a suit over "Deal or No Deal" in Gwinnett Superior Court, based in part on the Georgia racketeering statute. He said they dismissed the suit and refiled in California after associating on the case with lawyers at Milberg Weiss.

Pannell said the Georgia civil recovery statute applies to card games, horse races and the like. The Lucky Case Game is a lottery, he said, adding, "I never did think that statute applied to lotteries."

The case at the state Supreme Court was a class="linelink" href="http://www.gasupreme.us/pdf/s08q0323.pdf" target="new">Hardin v. NBC Universal, No. No. S08Q0323.

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