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Gtech denied sovereign immunity protection in Texas


The Texas Supreme Court has ruled against Gtech, the gaming services and solutions provider now part of International Game Technology (IGT), in a case over legal immunity claims in the state.

The case related to consolidated lawsuits brought by thousands of purchasers of the ‘Fun 5’ tic-tac-toe game, which Gtech printed and produced for the Texas Lottery Commission under an existing contract.

Players alleged the ticket instructions were misleading and fraudulently caused them to believe they had purchased winning tickets. The game was introduced in September 2014 but shut down six weeks later due to the number of complaints.

Plaintiffs had filed separate litigation against Gtech in Travis County and Dallas County alleging fraud and conspiracy, with the supplier filing responses in both of the jurisdictions.

In its responses, Gtech asserted that sovereign immunity protections barred all the claims because its work was controlled and directed by the Commission, an entity with sovereign immunity, which is classed as a legal doctrine that shields governmental entities from civil liability.

However, the Supreme Court rejected the notion, with Justice Brett Busby saying that the court previously had “few opportunities to address whether a Texas government agency’s immunity from suit might extend to its private contractors, and if so under what circumstances”.

“Because Gtech exercised discretion in choosing the game instructions, it would not be entitled to derivative immunity from fraud claims based on those instructions,” Justice Busby added.

The court’s ruling remanded both cases to their original jurisdictions for further action.

Kevin Parker, speaking on behalf of The Lanier Law Firm, which had presented the arguments on behalf of some 1,200 players, said: “This is an important ruling for Texas law and puts both agencies and vendors on notice.

“It’s going to be much more difficult for companies to wave the immunity flag just because they’re working for a governmental agency.”