Fliff class action parties clashing over compelled arbitration

The latest filing in the California class action lawsuit against sweepstakes sportsbook Fliff is challenging the legality of the site’s terms and conditions requiring all disputes to be handled with binding arbitration.

Plaintiff Bishoy Nessim filed a response to Fliff’s claim, filed last month, that the case cannot be pursued in a California court because he agreed to the terms and conditions of the site that require matters to be taken to arbitration.

In the response, Nessim’s counsel offered several reasons why the courts should intervene and hear the case.

“Simply put, Defendant Fliff, Inc. (“Fliff”) seeks to avoid having the merits of this case heard by this Court. Instead, it seeks to enforce arbitration terms that are invalid and, hence, unenforceable under California law. This case, which challenges an illegal sports betting operation under California law, is brought by a California Plaintiff, on behalf of a proposed class of California residents,” the motion reads.

“Fliff now asks this Court to force Plaintiff to arbitrate his claims under Pennsylvania law. This Court should reject Fliff’s request. Under binding choice-of-law principles, California law governs this dispute.”

Fliff’s paperwork filed with the Securities and Exchange Commission states the company is headquartered in King of Prussia, PA in the Parkway Tower business complex adjacent to Valley Forge Casino.

In the motion, Nessim claims the company does not have a substantial relationship with Pennsylvania. The filing states that the company was originally incorporated in Delaware, which is corroborated with the SEC paperwork. Moreover, Nessim suggests that the company actually is headquartered in Austin, TX. He said Fliff CEO Matt Ricci resides in Texas according to his LinkedIn profile. Evidence submitted by the plaintiff also shows that Fliff is currently advertising for several jobs located in Austin.

Regardless of the company’s location, the motion cites the McGill Rule, established in McGill v. Citibank, which suggests arbitration provisions that force someone to waive all rights to see public injunctive relief is unenforceable in California.

Much of the motion argued why California is the proper venue for the case to be heard as well. The document noted that, even if the company is headquartered in Pennsylvania, the laws of that state are in direct conflict with California’s because the state has regulated and legal online sports betting (however, Fliff is not a regulated real-money sportsbook in the state).

It now falls to Judge Sunshine Suzanne Sykesto to decide whether or not the arbitration element of Fliff’s terms and conditions is enforceable.