In a groundbreaking decision, more than 100 casinos have been given the green light to pursue their antitrust claims against Light & Wonder, the company behind automated card-shuffling machines, as a unified class in arbitration proceedings. This marks a significant development in the world of arbitration and antitrust litigation.
In a ruling on December 9, American Arbitration Association arbitrator John Wilkinson certified the casinos as an arbitration class. The decision allows the casinos to proceed collectively in a single arbitration, rather than pursuing over 100 separate cases. This ruling has the potential to set a precedent for how similar cases are handled in the future.
The Legal Challenge: A Monopoly on Card-Shuffling Machines?
At the heart of the dispute is Light & Wonder’s alleged efforts to monopolize the market for card-shuffling machines through sham patent litigation. More than 100 casinos argue that the company engaged in anti-competitive practices to block competitors and maintain dominance in the market.
The question facing the arbitrator was whether the casinos should pursue their claims individually or as a class. While Light & Wonder argued that each casino’s arbitration contract was unique, making a class action inappropriate, Wilkinson disagreed. He ruled that pursuing the case as a class would be more efficient and fair, as multiple individual arbitrations would lead to contradictory decisions.
Breaking New Ground: The First Certified Antitrust Arbitration Class
This case stands out not only because of its size and complexity but also because it represents what appears to be the first-ever certified antitrust arbitration class. The decision is even more remarkable given the U.S. Supreme Court’s 2019 ruling in Lamps Plus, Inc. v. Varela, which effectively limited classwide arbitration. In that case, the justices held that ambiguous arbitration contracts couldn’t be interpreted to allow classwide claims.
However, in this case, Wilkinson found that the arbitration agreement at the Akwesasne Mohawk Casino Resort was not ambiguous. He concluded that the broad language in the contract, which directed all disputes to arbitration, was enough to encompass classwide claims. This was a pivotal moment in the case and one that Light & Wonder tried to challenge in New York State Supreme Court, but the ruling was upheld.
Light & Wonder’s Legal Fight Continues
Despite the major setback in arbitration, Light & Wonder has vowed to continue its legal battle. A spokesperson for the company confirmed they would appeal Wilkinson’s decision, likely bringing the case back to New York State Supreme Court.
The company’s argument focuses on the claim that the arbitration contracts with the casinos vary too much to allow for class certification. However, Wilkinson dismissed this argument, stating that it was unsupported by case law and that the company had failed to identify a single instance where such a claim had been applied in a class arbitration context.
The Stakes for Casinos and the Legal System
For the casinos involved, this ruling represents a chance for a more efficient and equitable resolution of their complex antitrust claims. Michael Eisenkraft, the counsel for the Mohawk casino, expressed confidence in the decision, emphasizing that the ruling ensures the casinos will have a fair opportunity to argue their case. He also highlighted that the ruling demonstrates that when legal obstacles are removed, cases like this can move forward smoothly.
The case also has broader implications for the U.S. legal system. While many countries envy the U.S. class action system, there is growing concern that defendants in the U.S. are increasingly trying to block class proceedings. Eisenkraft’s comment about how “when someone doesn’t build a dam, the water flows” suggests that this ruling may encourage further challenges to attempts by large companies to block class actions.
What’s Next for the Casinos and Light & Wonder?
While the casinos are now set to proceed with their class arbitration, Light & Wonder is simultaneously fighting similar class certification in federal court in Chicago. More than 1,000 casinos, who did not sign arbitration agreements, are litigating antitrust claims that mirror the allegations in the Mohawk arbitration. The outcome of these proceedings could further shape the landscape of antitrust litigation in the gaming industry.
For now, however, the casinos involved in the arbitration class have been given a chance to pursue their claims as a group. With Light & Wonder continuing its efforts to block the class certification, the outcome of this case could have lasting effects on how antitrust claims are handled in arbitration moving forward.
