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Lay v. Caesars Enterprises Services, LLC

United States District Court, D. Maryland

April 25, 2018

ROBERT ANTHONY LAY
v.
CAESARS ENTERPRISE SERVICES, LLC

          MEMORANDUM

          CATHERINE C. BLAKE, UNITED STATES DISTRICT JUDGE.

         Plaintiff Robert Anthony Lay filed this action against Caesars Enterprise Services, LLC, [1]claiming fraud, negligence, and unfair and deceptive trade practice in connection with the World Series of Poker Circuit. Mr. Lay filed motions to remand this action to state court (ECF No. 10), and for limited jurisdictional discovery (ECF No. 16). The defendant filed motions to dismiss (ECF No. 11), to amend/correct its notice of removal (ECF No. 15), and for leave to file a surreply regarding the pending motion for jurisdictional discovery (ECF No. 23). The issues in this case have been fully briefed, and no hearing is necessary. See Local R. 105.6. For the reasons stated below, the motions to correct the notice of removal and for leave to file a surreply will be granted. The motions to remand to state court and for jurisdictional discovery will be denied. The motion to dismiss will be granted.

         BACKGROUND[2]

         In 2013, Mr. Lay was indicted in connection with an illegal sports gambling racket in the Western District of Oklahoma. Compl. ¶ 16-17 (ECF No. 2). He ultimately pled guilty to engaging in a racketeering conspiracy in violation of 18 U.S.C. 1962(d) in 2015 and was sentenced to one year of probation, 104 hours of community service, and to pay a special assessment of $100. Id. ¶ 19-21. He has completed his sentence and his period of probation has ended. Id. ¶ 22. He states that his criminal conviction was publicly known, particularly throughout the "gaming community." Id. ¶ 37.

         Mr. Lay currently earns a living, at least in part, as a professional poker player. He competes in tournaments across the country. Id. ¶ 23. In 2016, Mr. Lay participated in several events in the World Series of Poker Circuit ("WSOPC") with the intention of qualifying for the Global Casino Championship by earning sufficient qualifying points through WSOPC events. Id. ¶ 27-28. One of these events occurred at the Horseshoe Casino in Baltimore, Maryland in April and May 2017. Id. ¶ 30. The Horseshoe Casino is owned and operated by the defendant. Id. ¶ 31. Mr. Lay alleges that the defendant or one of its affiliates owns and operates the WSOPC. Id. ¶ 32.

         Mr. Lay accumulated sufficient point's in the qualifying WSOPC events to receive an invitation to the Global Casino Championship in August 2017. Id. ¶ 33. After he received his invitation, however, Mr. Lay received notification from the Caesars Entertainment Corporation that he was banned from entry on all Caesars properties in the United States. Id. ¶ 34; Def. Ex. 1 . (ECF No. 11-2). As the Global Casino Championship occurs at a Caesars property, he was effectively barred from participation. Compl. ¶ 35. Mr. Lay states that the value of the invitation to the Global Casino Championship and the accompanying travel and expenses is $10, 000. Id. ¶ 14.

         On November 2, 2017, Mr. Lay filed suit against Caesars Enterprises Services, LLC in the Circuit Court for Baltimore County, Maryland. Id.; Notice of Removal, ECF No. 1. Mr. Lay sued the defendant for fraud, negligent misrepresentation, negligence per se, and unfair and deceptive trade practices. Compl. ¶ 39-56. Essentially, he argues that the defendant represented through advertisements that any person who accumulated sufficient points at qualifying WSOPC events would earn an invitation to the Global Casino Championship, in order to encourage participation at the WSOPC events over other poker competitions. In issuing the banning notice based on publicly available information regarding his criminal conviction, Mr. Lay alleges the defendant failed to fulfill his earned invitation to the Global Casino Championship, making their representations regarding WSOPC participation fraudulent and/or negligent. Mr. Lay alleges that he suffered an injury of $10, 000 in the lost value of participation. He asks "in excess of $75, 000" for actual and punitive damages on his fraud claim and $25, 000 for each of his remaining three claims. Id.

         The case was removed to this court by the defendant on the basis of diversity jurisdiction on January 10, 2018, within the 30-day period for removal under 28 U.S.C. § 1446(b). Mr. Lay filed amotion to remand to state court and for attorney's fees on January 12th. The defendant responded with a motion to dismiss for failure to state a claim and for lack of jurisdiction, or to transfer, on January 17th. On January 22nd, the defendant filed a motion to amend or correct its notice of removal and opposition to the plaintiffs motion to remand. Mr. Lay filed a motion for discovery on the limited question of general jurisdiction and a response in opposition to the motion to dismiss on January 29th. He also filed a response in opposition to the motion to amend or correct the notice of removal on February 2nd. On February 12th, the defendant filed its reply regarding the motion to dismiss, and a response in opposition to the motion for discovery. On February 15th, the defendant also filed their reply regarding the motion to amend or correct the notice of removal. On February 24th, Mr. Lay filed his reply regarding the motion for discovery. The defendant filed a motion for leave to file a surreply regarding the motion for discovery on March 12th, to which Mr. Lay filed a response on March 24th. At no point has Mr. Lay moved to amend his complaint, nor has he indicated in any of his motions or briefs any intent to do so.

         Currently pending before the court are the motion to remand, the motion to dismiss or transfer, the motion to amend or correct the notice of removal, the motion for discovery and the motion for leave to file a surreply. The motion for leave to file a surreply will be granted, and the arguments made in that surreply have been considered by the court. The other motions will be addressed in turn.

         ANALYSIS

         A. Subject Matter Jurisdiction

         Diversity jurisdiction is generally limited to disputes between "citizens of different States." 28 U.S.C. § 1332(a)(1). That limitation requires the parties to be completely diverse, "meaning a plaintiff cannot be a citizen of the same state as any defendant." Johnson v. Am. Towers, LLC, 781 F.3d 693, 704 (4th Cir. 2015). Where one of the parties is a limited liability company, that party bears the citizenship of each of its members. If one of those members is itself an LLC, then the party's citizenship must "be traced through multiple levels, " meaning that its citizenship derives from the membership of the parent LLC, as well as its own membership. Mut. Assignment & Indemnification Co. v. Lind-Waldock & Co., 364 F.3d 858, 861 (7th Cir. 2004). Courts assess the citizenship of a natural person by domicile. See, e.g., Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989)

         "Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts." 28 U.S.C. § 1653. After the initial thirty days in which removal and amendment of the removal notice is permitted, "district courts have discretion to permit amendments that correct allegations already present in the notice of removal. Courts have no discretion to permit amendments furnishing new allegations of a jurisdictional basis." Wood v. Crane Co., 764 F.3d 316, 323 (4th Cir. 2014). Amendment is appropriate for procedural or technical defects, but not jurisdictional defects. Id; Doe v. Blair, 819 F.3d 64, 67 (4th Cir. 2016).

         The defendant removed this case on the basis of diversity jurisdiction. Initially, the notice of removal did not include the citizenship of each of the members that comprise Caesars Enterprise Services, LLC. Mr. Lay filed a motion to remand based on this deficiency. In response, the defendant filed a motion to amend or correct its notice of removal to add the citizenship of all of its members. As diversity citizenship was asserted as the basis for removal in the initial notice of removal, the deficiency of omitting the citizenship of each of the defendant's members specifically was a procedural defect. See Muhlenbeck v. KI, LLC,304 F.Supp.2d 797, 802 (E.D. Va. 2004) ...


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