Filing the Demands Is Petitioning: New York Dismisses a Retaliatory Suit Against Claimant Firms

The defence-side response to mass arbitration has moved through three phases. First came clause redrafting. Then came fee restructuring at the providers. The third phase — suing the claimant firms — has just met its first substantial published obstacle.

The suit

SCPS, LLC and SSPS, LLC operate the online sweepstakes casinos Zula and Sportzino. Kind Law, based in Las Vegas, and Ben Travis Law, based in San Diego, had advertised on social media for users of those platforms and filed arbitration demands on their behalf with the AAA, asserting that the operators were running unlicensed gambling.

The operators' answer was to sue the firms in New York, pleading malicious prosecution, tortious interference with prospective business relations, and prima facie tort. Their theory, familiar from the broader defence-side critique, was that the campaigns had been assembled indiscriminately: that among the demands were people who had never registered, and people who had played without ever spending money.

The holding

Justice Phaedra F. Perry-Bond granted the firms' motion to dismiss under CPLR 3211(g) and dismissed the complaint in its entirety.

The analysis has two steps, and both matter.

The subject is a matter of public interest. New York's anti-SLAPP regime, as amended in 2020, reaches communications on any issue of public interest, construed broadly. Consumer protection concerning allegedly unlicensed online casinos qualifies. The operators' attempt to reframe the dispute as a private commercial grievance about their own business did not survive that characterisation — which is the move most retaliatory suits depend on.

Both halves of the campaign are protected. The court treated the social media solicitation as speech in a public forum, and the arbitration filings as "lawful conduct in furtherance of the website users' right to petition" in the forum the operators' own contracts required.

That second holding is the one to read twice. The operators had drafted the arbitration clause. The claimants used it. Characterising that use as tortious asks a court to treat a contractually mandated forum as an improper one, and the court declined — locating the filings squarely within the right to petition rather than outside it.

The cost of getting it wrong

Dismissal was not the end of it. Civil Rights Law § 70-a makes an award of attorney's fees mandatory where an action is dismissed under the anti-SLAPP provisions. The firms were directed to submit a fee application within 30 days. Their separate sanctions motion was denied as moot — it had nothing left to attach to.

This is the structural asymmetry that a retaliation strategy has to price. A merits defence to a mass arbitration campaign, however expensive, is symmetric: both sides bear their own costs. A malicious prosecution suit filed in an anti-SLAPP jurisdiction is not. If the campaign touches a subject a court will call a matter of public interest — consumer protection, product safety, privacy, gambling licensure — the downside is dismissal plus the other side's fees.

What it does not decide

The ruling says nothing about whether the underlying demands were meritorious, and nothing about the operators' factual allegation that some claimants were never customers. Anti-SLAPP dismissal at the pleading stage is not a finding that the campaign was well-founded; it is a holding that a tort suit is the wrong instrument for testing it.

The right instruments remain where they were: challenging individual demands within the arbitration, contesting claimant standing at the provider, seeking fee consequences for abandoned filings under the AAA and JAMS mass filing rules, and — as respondents are increasingly doing by contract — requiring verification and funding disclosure at the front of the process rather than litigating about it at the back.

A drafter who wants to police claimant quality should be doing it in the clause. This decision is a fairly direct statement that doing it by tort suit, in New York, will cost money.