Denise Deckard’s parents purchased a Fun ‘s lottery ticket from the Texas Lottery Commission. They believed they had won a substantial cash prize based on the clear language of the ticket’s instructions. However, when they attempted to cash the ticket they were informed that they were not winners.
Denise felt this was fundamentally unfair. She started a petition on Change.org addressed to the Governor of Texas, the Lieutenant Governor, and to the Speaker of the Texas House of Representatives. Her Petition is entitled “Restore Honesty and Fairness to the Texas Lottery”. Nearly 10,000 lottery players signed the Petition and called for their elected officials to restore honesty and fairness to the Texas lottery.
The Meeting
On June 22, 2016, Denise met with Jared Staples, a representative of Governor Greg Abbott. She presented the Petition to him on behalf of the nearly 10,000 lottery players who had signed it. Denise asked that the Petition be communicated to the Governor.
On June 30th, Denise received the following response from the Governor’s representative which she shared with us:
From: Jared.Staples@gov.texas.gov
To: ddeck1@msn.com
Subject: RE: Update Deckards’s Meeting June 22
Date: Thu, 30 Jun 2016 23:11:42 +0000
Ms. Deckard,
I appreciate you making the trip to Austin last week to deliver the petition and discuss concerns of consumer protection for lottery players.
Please know that this Office takes seriously any allegation of a state entity conducting its business in a dishonest and/or unfair manner. We expect the appointed board and commission members of these entities to ensure the highest standards of integrity within the agency they oversee.
To your point of deceptive tickets being sold, it is my understanding that issue is under pending litigation and therefore we cannot speak to that specifically; however, to your broader request for action on consumer protection—which we discussed at length during your visit—I asked that you identify some specific items or reforms that I can share with our Lottery Commissioners to look into. I am glad to share with the Commissioners the general information that you have already provided to this Office, but more specific issues and recommendations would be helpful to make sure these concerns are fully vetted and addressed.
Additionally, I encourage you and others to attend the Texas Lottery Commission’s open meetings, which occur at least six times a year. At those meetings there is an opportunity for anyone to present formal public comment to the Lottery Commissioners. At our meeting, I gave you information on how to get notifications when these meetings get scheduled. For your convenience, I am providing a link to that information here: http://www.sos.state.tx.us/texreg/subinfo.shtml.
Again, I thank you for reaching out. I will be glad to receive any additional concerns or reforms you identify and share those with our Lottery Commissioners and any other appropriate party.
Sincerely,
Jared Staples
Policy Advisor
Texas Governor Greg Abbott
(512) 463-1778
Did the Governor Get the Message?
Denise followed up her meeting with a Public Records Request in which she asked for copies of any communications between Mr. Staples and Governor Abbott. In essence, she was checking to see whether Mr. Staples provided the Governor with a copy of the petition she had presented to him. Denise received the following response:
From: publicrecords@gov.texas.gov
To: ddeck1@msn.com
Subject: RE: OOG PIR # 16-238
Date: Wed, 10 Aug 2016 16:16:45 +0000
August 10, 2016
Denice Deckard
Ddeck1@msn.com
VIA EMAIL ONLY
RE: OOG PIR # 16-238
Ms. Deckard:
This letter is in response to your public information request to the Office of the Governor (“OOG”), received by the OOG on August 2, 2016. A copy of your request follows this email.
The OOG has reviewed its files and has no information responsive to your request. If you have any questions, please contact me at publicrecords@gov.texas.gov.
Sincerely,
Jessica Vu
Assistant General Counsel
Office of Governor Greg Abbott
Denise is justifiably concerned that Governor Abbott never received the Petition she delivered to Mr. Staples on behalf of the 10,000 or so lottery players.
Denise also filed a Public Information Request to see if there were any communications between Mr. Staples and the Texas Lottery Commission regarding the petition. Here is the response she received:
From: OpenRecords@lottery.state.tx.us
To: ddeck1@msn.com
Subject: Public Information Request
Date: Tue, 9 Aug 2016 20:58:30 +0000
Ms. Deckard:
This email is in response to your Public Information Request received July 26, 2016.
You requested:
“I would like to receive copies of any/all emails, faxes, letters or phone records between any/all TLC staff members and Jared Staples (Policy Advisor Texas Governor Greg Abbott) office since June 1, 2016 through todays date.”
The responsive documents contain information the agency believes to be excepted from disclosure under the Public Information Act. Please be advised that we are currently seeking an Attorney General Open Records Decision for the portions of the requested information which the Commission has asserted are confidential and excepted from disclosure.
Enclosed is a copy of the request sent to the Open Records Division of the Office of the Attorney General. We will keep you apprised of any developments.
Katelind Powers
Open Records Coordinator
Texas Lottery Commission
PO Box 16630
Austin, TX 78701-6630
512-344-5420
openrecords@lottery.state.tx.us
In other words, there appear to be responsive documents showing that Mr, Staples communicated with the Texas Lottery Commission about the Petition but the Commission is refusing to provide Denise with those communications unless the Attorney General tells the Commission that it must turn the documents over.
What can Governor Abbott Do?
First, we don’t know if Governor Abbott ever received a copy of the Petition. The response to the Public Information Request suggests that no documents or emails were sent to the Governor. There’s always the possibility that Mr. Staples met with the Governor in person. We just don’t know.
Second, Mr. Staples is probably correct. The Governor can’t be expected to publicly comment on an existing lawsuit against GTECH related to the Fun 5’s scandal. However, he can comment on changes that might need to be made to restore honesty and fairness to the Texas Lottery which is what almost 10,000 voters are asking him to do.
Third, it is unfair to expect Governor Abbott to change the organization or structure of the Texas Lottery Commission. As Governor, he does not have that power. The Texas Lottery Commission is a creature of the Texas Legislature. That is a job for the Texas Senate and the Texas House of Representatives.
Governor Abbott does have the power to appoint or fire the five members of the Texas Lottery Commission who are obligated to look over the shoulder of Gary Grief, the Texas Lottery’s Executive Director. Governor Abbott replaced four of the five Commissioners who were in place at the time of the Fun 5’s scandal. However, he did not replace J. Winston Krause, the Chairman of the Commission. Mr. Krause was appointed by Governor Rick Perry and was the Chairman of the Commission when Mr. Grief made the decision to continue selling the misleading Fun 5’s tickets to the public. Mr. Krause continues to be Chairman of the Commission.
It is probably a fair question to ask the Governor’s office whether it ever investigated what Chairman Krause knew and when did he know it. Was Chairman Krause aware that over 100 lottery players per day were complaining that they felt they had been misled by the Fun 5’s tickets? Did Chairman Krause know that the staff of the Lottery Commission prepared the paperwork to shut down the Fun 5’s game three days after sales began but the game was not shut down because Executive Director Gary Grief did not feel a need to shut it down? Did Chairman Krause know that Gary Grief gave a deposition in which he testified that he was not concerned by the complaints being made by the lottery players? If Chairman Krause did not know any of these facts, why wasn’t he aware? Isn’t he the Chairman of the Commission that is supposed to be protecting the integrity of the Texas Lottery? What was he doing to protect the lottery players from being misled? All of these questions are fair game for the Governor’s office.
What can the Texas Legislature Do?
The Texas Senate is led by Lieutenant Governor Dan Patrick, and the Texas House of Representatives is led by Speaker of the House, Joe Strauss. Both legislative bodies have the power to change the structure of the Texas Lottery Commission and to take steps to restore honesty and fairness to the Texas Lottery. It is unknown whether the Lieutenant Governor or the Speaker have read Ms. Deckard’s Petition. However, the nearly 10,000 lottery players who signed the Petition are entitled to a response from them once they do read it.
One thing the Legislature can do is to waive Sovereign Immunity to allow lottery players who were cheated by the Fun 5’s game to bring suit against the Texas Lottery Commission. The Texas Lottery Commission has an absolute right, by contract, to demand that GTECH provide and pay for a defense of any claims arising out of what GTECH did in the Fun 5’s games. In addition, GTECH is obligated to indemnify the Texas Lottery Commission from those claims. In other words, if the Texas Senate and the Texas House vote to allow lottery players to sue the Lottery Commission, it will cost the State of Texas and the Texas Lottery nothing.
Second, the Legislature can look into why the Texas Lottery Commission that is in charge of looking over the shoulder of the Executive Director did not do its job.
Third, the Legislature can look into putting in place an Ombudsman whose sole job it is to protect lottery players from misleading or deceptive lottery games. The Lottery Commission has an Ombudsman to protect employees of the Commission. In other words, if an employee of the Commission feels that he or she is being treated unfairly, they can complain to the Ombudsman whose job it is to protect that employee. There is no such Ombudsman for players. Why not?
What can you do?
These are links, to the websites for Governor Abbott >>link<<, Lieutenant Governor Patrick >>link<<, and Speaker Strauss >>link<<. Their websites contain forms that allow you to send your thoughts and questions to your elected officials. Each of you, as citizens of Texas, have a right to know what steps, if any, these public servants will take to restore honesty and fairness to the Texas Lottery. Let them hear from you and demand that they tell you what concrete steps they intend to take to ensure that an incident like the Fun 5’s scandal will never take place again.
The post Representative of Governor Meets With Lottery Petitioner first appeared on SEONewsWire.net.]]>Policy Advisor to Texas Governor Greg Abbott tomorrow, June 22nd. Ms. Deckard started a petition on Change.org in reaction to the Fun 5’s scandal involving misleading lottery scratch-off tickets that were designed by GTECH (International Game Techologylogy) and were sold by the Texas Lottery Commission. Ms. Deckard’s petition asks the governor to provide Texas lottery players with consumer protections, to restore fairness and honesty to the Texas lottery and to hold both GTECH (IGT) and the executive director of the lottery commission responsible for the sale of the misleading lottery tickets. Ms. Deckard’s petition has garnered nearly 9,000 signatures from Texas lottery players. A copy of Ms. Deckard’s petition can be read >>here<<. The post Author of Lottery Petition to Meet with Representative of Governor Abbott first appeared on SEONewsWire.net.]]>
In Campbell-Ewald v. Gomez, the Supreme Court was asked whether a Navy contractor was immune from suit when it sent text messages to individuals who had not opted to receive them in violation of federal law and the Navy’s directive that the text messages should only be sent to those on the opt-in list. The Supreme Court made it clear that government contractors do not have absolute immunity. As the Court noted: “[w]hen a contractor violates both federal law and the Government’s explicit instructions, as here alleged, no “derivative immunity” shields the contractor from suit by persons adversely affected by the violation.” The Court went on to note that qualified immunity may be overcome if the defendant knew or should have known that his conduct violated a right ‘clearly established’ at the time of the episode in suit.” The Court concluded that the Navy contractor was not entitled to immunity because there was no basis for Campbell-Ewald to argue that there was any doubt that the plaintiff had a clearly established right to be free of unsolicited text messages or that its actions complied with the Navy’s instructions. In the Fun 5’s case, the lottery players had a clear right to be free from deceptive or fraudulent representations. GTECH cannot argue that it was unaware that it had a duty to be honest and fair with lottery players. Both Texas criminal and civil law prohibit the commission of fraud on consumers. Moreover, the Texas Lottery Commission made it clear in the Instant Ticket Contract with GTECH that GTECH was to provide final working papers that were “complete and free of errors”. Moreover, GTECH was required to conduct all of its operations “in adherence to the highest ethical standards.” To the extent that the wording chosen by GTECH in the final working papers was misleading and deceptive, the working papers were not “free of errors” and GTECH did not comply with its contractual duty to conduct its operations in adherence to the highest ethical standards.
Although the Supreme Court’s opinion dealt with federal law, it is likely that it will be at least considered by the Texas trial and appellate courts when they rule on GTECH’s claim of derivative sovereign immunity in the Fun 5’s case.
The post United States Supreme Court Issues Opinion on Derivative Immunity first appeared on SEONewsWire.net.]]>Judge Jordan earlier ruled that the Texas Lottery Commission cannot be sued for fraud under the doctrine of “sovereign immunity”. A copy of the legal briefs on that issue and the court’s Order granting the TLC’s Plea to the Jurisdiction can be read >>here<<.
In his most recent Order Granting GTECH’s 1st Plea to the Jurisdiction, Judge Jordan dismissed Ms. Nettles’ fraud claims against GTECH based on the legal doctrine of “derivative immunity”. A copy of the legal briefs on that issue can be read >>here<<.
Richard LaGarde, one of the attorneys for Ms. Nettles, stated “We are disappointed in the court’s ruling and respectfully disagree with it. We plan to appeal and we hope to convince the court of appeals that lottery players should not be left without any legal remedy whatsoever if the lottery and its private operator decide to sell misleading and deceptive tickets to Texas citizens.”
The court’s ruling on Ms. Nettles’ case is not binding on the Austin trial court where approximately 1,000 lottery players have filed a similar Fun 5’s lawsuit against GTECH.
The post Court Rules that GTECH Cannot be Sued for Fraud first appeared on SEONewsWire.net.]]>In its Plea to the Jurisdiction, GTECH alleges that it is entitled to “derivative immunity” and cannot be sued for fraud because it was merely doing what the Texas Lottery Commission ordered it to do. In response, the Plaintiff in that suit filed her Response to GTECH’s 1st Amended Plea to the Jurisdiction in which she argued that GTECH is not entitled to derivative immunity because it exercised “independent discretion” when it chose the wording of the tickets that it sold to the Lottery Commission.
The Court has not yet ruled on GTECH’s Plea but is expected to do so in the coming week.
The post GTECH Claims it Cannot Be Sued for Fraud first appeared on SEONewsWire.net.]]>
Offices of the Texas Attorney General
(from l to r) Joseph Lapinski, court reporter, Richard LaGarde, Mary LaGarde, Manfred Sternberg, and Dawn Nettles
Joseph Lapinski, GTECH Corporation’s Texas Account General Manager was deposed yesterday in Austin. Highlights from Mr. Lapinski’s sworn deposition testimony will be shared with Fun 5’s clients in a confidential e-mail update in the coming weeks. Depositions are set for three employees of GTECH Corporation’s Instant Ticket Printing division in Lakeland, Florida next week. Two officials of the Texas Lottery Commission will be deposed in Austin on July 30th.
Background of the Fun 5’s lawsuit.
The lawsuit, pending in state district court in Travis County, alleges that GTECH used misleading and deceptive language on Fun 5’s scratch-off tickets printed by GTECH and sold in Texas. GTECH operated a nearly identical Fun 5’s game in several other states before proposing the game to the Texas Lottery Commission. The language used by GTECH on the Fun 5’s tickets is the crux of the problem. Fun 5’s tickets printed by GTECH in Kansas, Indiana, and Nebraska contained a tic-tac-toe game designated as Game 3. In Texas, the same tic-tac-toe game was designated as Game 5. The instructions for the Fun 5’s tic-tac-toe game in those three states and in Texas are almost identical and provide as follows:
Kansas: Get a “5” symbol in the BONUS box, win 5 times that Prize!
Indiana: Get a “5” symbol in the bonus box, win 5 times the prize shown.
Nebraska: Get a “5” symbol in the 5X box and win 5 times that PRIZE.
Texas: Reveal a Money Bag ” 
” symbol in the 5X BOX, win 5 times that PRIZE.
The suit alleges that in Kansas, Indiana, and Nebraska, 100% of the tickets with a “5” symbol were “winning” tickets and those players received 5 times the prize shown on the ticket. In Texas, the original parameters of the game likewise provided that 100% of the tickets with a Money Bag symbol would be “winning” tickets. Use of the same language in Texas as that used in the other states would have been accurate if 100% of the tickets with a Money Bag symbol were “winning” tickets as in the other states. However, the suit alleges that GTECH and the Texas Lottery Commission decided to change the parameters of the game in Texas so that a “substantial percentage” of tickets with a Money Bag symbol would be designated as “non-winning” tickets. Despite the significant change in the parameters of the game, GTECH decided to leave the language on the tickets as is. The suit alleges that GTECH misled at least 1,000 Texas Lottery players into justifiably believing they had “winning” tickets.
The Texas Lottery began selling Fun 5’s tickets on September 1, 2014. Almost immediately phone calls began to pour into the Texas Lottery Commission from angry lottery players who believed they had “winning” tickets but were told otherwise when they attempted to cash their tickets. Amazingly, despite these early warning signs that the Fun 5’s tickets were misleading, GTECH continued delivering the Fun 5’s tickets to retailers and the tickets continued to be sold to Texas consumers for at least seven weeks. On October 21, 2014, the Texas Lottery issued a press release to announce that it was closing the Fun 5’s game early and would discontinue selling the tickets, citing “confusion” expressed by players and the Texas Lottery’s responsibility to create games that are “clear to understand for our players”. A large number of the disappointed Fun 5’s players contacted their Texas legislators. Others contacted the Travis County District Attorney. Still others contacted then Attorney General Gregg Abbott’s office asking for an investigation. When they got no satisfaction from their elected officials, players with Money Bag symbols on their Fun 5’s tickets filed suit against GTECH. Approximately 1,000 players have joined in the lawsuit and more are joining each week. The total winnings being claimed by the disappointed players is at least $504 million.
What is a Responsible Third Party?
In 1995, the Texas Legislature enacted Section 33.004 of the Texas Civil Practice and Remedies Code to permit a defendant in a tort-based lawsuit to file a motion with the court to designate a non-party to the lawsuit as a “Responsible Third Party”. Lawyers often refer to this party as an “RTP”. If a defendant is permitted to designate an RTP and if the defendant proves that the RTP is partly responsible for the damages suffered by the plaintiffs, the jury is required to assess the percentage of responsibility of the RTP. The percentage assessed against the RTP reduces the liability of the defendant and reduces the recovery of the plaintiffs unless they bring the RTP into the lawsuit.
What does GTECH gain and lose if it points the finger at the Lottery Commission?
Under the Civil Practice and Remedies Code, GTECH has until 60 days before trial to designate the Lottery Commission as an RTP. Whether it will actually do so is not yet known. What is known is that GTECH has much to gain and much to lose if it pulls the trigger. If it designates the Lottery Commission as an RTP, GTECH will have the chance to reduce its liability, but only if it convinces the jury that the Commission was partly responsible for causing the players’ losses. However, GTECH risks alienating both the Lottery Commission and the Texas Legislature if it attempts to shift blame. GTECH’s mere threat that it “may” designate the Commission as an RTP will require the players to take the sworn deposition testimony of the Commission’s staff and officials to determine whether the Commission was at fault. The usually cozy relationship between the Commission and its contract operator may be damaged by GTECH’s finger pointing and attempts to place the blame on the Commission. The Texas Legislature will not be thrilled either. By designating the Commission as an RTP, GTECH will incentivize the players to seek approval from the Texas Legislature to bring the Lottery Commission into the lawsuit. A group of over 1,000 angry lottery players who believe they are owed $504 million makes for a very motivated and dangerous constituency group that may become angry at their elected officials if their needs are not met. The Texas Lottery faced a near death penalty in the recent past when the Legislature nearly killed the lottery during sunset proceedings. By trying to lay blame on the Lottery Commission and its staff, GTECH may lose friends at both the Commission and in the Legislature and may inadvertently lend support to those Legislators who have been trying to kill the lottery. GTECH also runs the risk of alienating other states that are shopping for a contract lottery operator. One of the selling points used by GTECH to get lucrative government contracts in the past is that it has vast experience in running lotteries all over the world. If GTECH gains a reputation for blaming state lottery officials for misleading scratch-off games, it may lose some of its advantage in competing for lottery contracts in other states. Only GTECH knows whether it will actually pull the trigger and designate the Texas Lottery Commission as an RTP. The coming months should prove interesting for GTECH, the disappointed lottery players, the Lottery Commission, and the Texas Legislature.
I
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