Opinion
CASE NO. 3:18-cv-05275-RBL
04-06-2020
SEAN WILSON, individually and on behalf of all others similarly situated, Plaintiff, v. PTT, LLC, a Delaware limited liability company d/b/a HIGH 5 GAMES, LLC, a Delaware limited liability company, Defendant.
ORDER ON DEFENDANT'S MOTION TO CERTIFY ISSUES TO WASHINGTON SUPREME COURT DKT. # 103
THIS MATTER is before the Court on Defendant High 5's Motion to Certify Issues to the Washington Supreme Court. Dkt. # 103. As the three-digit docket number for High 5's Motion indicates, the parties have already spent considerable time and judicial resources litigating this case about the legality of app-based casino games in Washington State. Much of those resources went into deciding High 5's motion to dismiss for failure to state a claim, which was filed on July 2, 2018. Dkt. # 34. In its motion, High 5 argued that Wilson's claims depended on him proving that: "(1) a High 5 virtual coin constitutes a 'thing of value' under RCW 9.46.0285; (2) Wilson's $1.99 purchase of High 5 virtual coins satisfies the definition of 'gambling' under RCW 9.46.0237, [which exempts 'bona fide business transactions']; and (3) the playing of a High 5 game is 'illegal gambling' for purposes of RCW 4.24.070." Id. at 18. High 5 argued that Wilson could not meet these requirements, but this Court disagreed and denied High 5's motion. Dkt. # 57.
Now, over a year and a half later, High 5 would like to certify the same questions it raised in its motion to dismiss to the Washington Supreme Court. Specifically, High 5 wants the Supreme Court to weigh in on the following issues: "(1) Are virtual coins 'things of value,' when players can play the game without paying for any coins, additional coins can be obtained without payment, and when the coins cannot be converted to cash, redeemed for prizes, or transferred to other users? (2) Does an in-app purchase of virtual coins constitute a 'bona fide business transaction,' which is expressly excepted from Washington's definition of gambling? [and] (3) Is playing an online, casino-themed video game the type of 'illegal' activity RCW § 4.24.070 was designed to address, when the game offers no prize?" Motion, Dkt. # 103, at 3-4. In opposition, Wilson contends that High 5 has already had its bite at this apple and certification at this stage of the case is unwarranted.
Although federal courts may decide state law issues of first impression, they also have discretion to certify such issues to the state's highest court. Murray v. BEJ Minerals, LLC, 924 F.3d 1070, 1071 (9th Cir. 2019). Washington law allows certification of question to the Washington Supreme Court when "the local law has not been clearly determined." RCW § 2.60.020; accord, RAP 16.16(a). But the Ninth Circuit has made clear that the certification process is not to be "lightly" invoked. Murray, 924 F.3d at 1072 (quoting Kremen v. Cohen, 325 F.3d 1035, 1037 (9th Cir. 2003)). It requires "careful consideration" of the following factors: "(1) whether the question presents 'important public policy ramifications' yet unresolved by the state court; (2) whether the issue is new, substantial, and of broad application; (3) the state court's caseload; and (4) 'the spirit of comity and federalism.'" Id. at 1072 (quoting Kremen, 325 F.3d at 1037-38).
"There is a presumption against certifying a question to a state supreme court after the federal district court has issued a decision." Thompson v. Paul, 547 F.3d 1055, 1065 (9th Cir. 2008). Courts in this circuit and elsewhere have recognized that allowing parties to exploit certification as a de facto reconsideration or appeal would turn the district court's decision into "nothing but a gamble." Id. (quoting Perkins v. Clark Equip. Co., Melrose Div., 823 F.2d 207, 209-10 (8th Cir.1987)); see also Enfield v. A.B. Chance Co., 228 F.3d 1245, 1255 (10th Cir. 2000); Cantwell v. Univ. of Mass., 551 F.2d 879, 880 (1st Cir. 1977). In short, "[a] party should not be allowed a second chance at victory through certification." Hinojos v. Kohl's Corp., 718 F.3d 1098, 1109 (9th Cir. 2013) (quoting Thompson, 547 F.3d at 1065 (internal quotation omitted)).
High 5 cannot overcome this presumption against post-hoc certification. As recounted previously, High 5 seeks certification of the exact same issues it raised in its motion to dismiss in 2018. Before that, the core issue of whether High 5's virtual coins are a "thing of value" under RCW 9.46.0285 was also decided by the Ninth Circuit in Kater v. Churchill Downs Inc., 886 F.3d 784 (9th Cir. 2018). Even with the knowledge that the Ninth Circuit had already rejected many of its positions, High 5 chose to argue in federal court that its app-based games did not constitute gambling. It would take something very special to convince the Court that certification is appropriate under such circumstances.
High 5's arguments do not rise to that level. High 5 makes some valid points in favor of certification, the most persuasive being that regulation of gambling is a state function and the highest state court should be the one to decide whether a new category of games meets the definition of illegal gambling. But this new-found preference for a state court decision does not justify High 5's choice to try its luck in federal court first.
Further, the Ninth Circuit's decision in Kater was a straightforward exercise in statutory interpretation that did not, as High 5 contends, fatally ignore legislative purpose. See Order on Motion to Dismiss, Dkt. # 57, at 17-18 (holding that statement of legislative purpose in RCW 9.46.010 is broad and does not clearly suggest a different interpretation from Kater). And while Kater and this Court's subsequent decisions may affect app-based casino games, it is unclear whether any other types of online games would be impacted. Washington's definition of "gambling" only reaches "staking or risking something of value upon the outcome of a contest of chance or a future contingent event not under the person's control or influence" and contains numerous exceptions. RCW 9.46.0237 (emphasis added). Most games not derived from casinos involve some amount of skill and would thus be unlikely to meet the statutory definition.
High 5 chose to litigate the merits of this case in federal court and that is where it will remain. High 5's Motion to Certify Issues to the Washington Supreme Court is DENIED.
IT IS SO ORDERED.
Dated this 6th day of April, 2020.
/s/_________
Ronald B. Leighton
United States District Judge