{"id":145325,"date":"2026-03-03T15:38:31","date_gmt":"2026-03-03T23:38:31","guid":{"rendered":"https:\/\/xira.com\/p\/2026\/03\/03\/skadden-sanctioned-over-duplicative-vexatious-litigation\/"},"modified":"2026-03-03T15:38:31","modified_gmt":"2026-03-03T23:38:31","slug":"skadden-sanctioned-over-duplicative-vexatious-litigation","status":"publish","type":"post","link":"https:\/\/xira.com\/p\/2026\/03\/03\/skadden-sanctioned-over-duplicative-vexatious-litigation\/","title":{"rendered":"Skadden Sanctioned Over \u2018Duplicative, Vexatious Litigation\u2019"},"content":{"rendered":"

Imposition of sanctions is not to be undertaken lightly. It is particularly difficult to do so when attorneys of unblemished reputation and a distinguished law firm are among the sanctioned parties. But reluctance to enter sanctions cannot excuse a failure to impose them when they are warranted. If the filing of duplicative, vexatious litigation were allowed to escape sanction, the costs would exceed those imposed on the defendants here. Courts and other parties may be encouraged to undertake burdensome and duplicative litigation. The administration of justice would suffer.<\/em> \u2014 Judge Denise L. Cote<\/p>\n

Everyone knows that if mom tells you no, it\u2019s not acceptable \u2014 even if tempting \u2014 to try to get approval from dad. It doesn\u2019t get any smarter if you replace mom and dad with the Southern District of New York and the Eastern District of Virginia.<\/p>\n

Last February, Skadden client and mobile gaming outfit Papaya Gaming\u2019s counterclaims against Skillz Platform were dismissed in the Southern District. At that point, Papaya moved to amend those claims and filed an \u201cessentially identical\u201d suit in Virginia. The Virginia action found its way back to New York and an understandably peeved Judge Cote.<\/p>\n

Papaya Gaming operates in the \u201creal-money skill-based\u201d mobile gaming market \u2014 which is apparently a term of art \u2014 running multiplayer tournaments where players compete for cash prizes. Theoretically, users compete against people, but Papaya was deploying bots in some of these tournaments without telling anyone. On occasion, a single human player would be competing against an entire field of bots. Skillz, one of Papaya\u2019s competitors, sued in March 2024, asserting a false advertising claim under the Lanham Act. Papaya eventually admitted it had been using bots until 2024 \u2014 but not before first trying to resist discovery by claiming Israeli law prevented it from producing records. (That gambit also failed.)<\/p>\n

Papaya fired back with counterclaims alleging Skillz had created a \u201cfalse front\u201d organization called 4FairPlay, which maintained a website encouraging consumers to file complaints about Papaya with state attorneys general. Judge Cote dismissed Papaya\u2019s counterclaims about the 4FairPlay website in February 2025. Papaya attempted to amend, and that earned a dismissal a month later.<\/p>\n

BUT, after filing its motion to amend \u2014 though before the denial \u2014 Papaya filed a new lawsuit in the Eastern District of Virginia against 4FairPlay, its operators, and related entities as defendants, asserting claims under Virginia law. Papaya\u2019s counsel then \u201cscrubbed\u201d the Virginia complaint to remove references to Skillz\u2019s direct involvement and delete allegations about bots \u2014 in what Judge Cote described as \u201can apparent attempt to circumvent the preclusion doctrines that its adversaries had identified in correspondence threatening sanctions.\u201d<\/p>\n

Judge Nachmanoff in the Eastern District of Virginia didn\u2019t mince words when he transferred the case to New York, stating that Papaya \u201cblatantly attempted to get a second bite at the apple by pursuing different but clearly related defendants in a different forum after Judge Cote conclusively rejected Papaya\u2019s counterclaim and motion for leave to file a second amended counterclaim on virtually identical claims.\u201d<\/p>\n

Once the case came back to Judge Cote, the strategy of playing the parents against each other was already, inevitably cooked.<\/p>\n

Judge Cote found that Papaya and Skadden \u201coperated in bad faith in filing the Virginia Action.\u201d The evidence of bad faith included the \u201cineffective scrubbing\u201d of the Virginia complaint to make it appear less duplicative and the \u201cstrained arguments\u201d attempting to distinguish the two litigations. The court explicitly identified the strategy at work: Papaya was pursuing claims against Skillz affiliates \u201cto place pressure on Skillz and thereby unreasonably increased the cost of litigation.\u201d<\/p>\n

Because the underlying Lanham Act case is still ongoing, with Skillz seeking over $700 million in damages. While that\u2019s a significant chunk of change, as the court noted, \u201clarge potential damages figures cannot excuse litigation tactics that improperly and unfairly increase the burden of litigation.\u201d Trial is slated to begin in April.<\/p>\n

This is a rough outcome for Skadden. The court\u2019s finding of bad faith \u2014 not \u201coopsie\u201d level negligence \u2014 is about as bad as a sanctions opinion gets. The only way this week could get any worse for Skadden is if they found out they spinelessly gave away $100 million<\/a> for no good reason.<\/p>\n

Oh<\/a>. <\/p>\n

Well, maybe the DOJ will be able to convince a court to allow it to reverse its own position from 24 hours before<\/a>. Failing that\u2026 maybe the government can try filling essentially identical claims in another court? I wonder if they could find a firm to help them do that pro bono?<\/p>\n

(Check out the full opinion and order on the next page\u2026)<\/em><\/p>\n

\n

\"Headshot\"Joe Patrice<\/a>\u00a0is a senior editor at Above the Law and co-host of Thinking Like A Lawyer<\/a>. Feel free to\u00a0email<\/a> any tips, questions, or comments. Follow him on\u00a0Twitter<\/a>\u00a0or Bluesky<\/a> if you\u2019re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search<\/a>.<\/em><\/strong><\/p>\n<\/p>\n

The post Skadden Sanctioned Over \u2018Duplicative, Vexatious Litigation\u2019<\/a> appeared first on Above the Law<\/a>.<\/p>\n

\"\"<\/figure>\n

Imposition of sanctions is not to be undertaken lightly. It is particularly difficult to do so when attorneys of unblemished reputation and a distinguished law firm are among the sanctioned parties. But reluctance to enter sanctions cannot excuse a failure to impose them when they are warranted. If the filing of duplicative, vexatious litigation were allowed to escape sanction, the costs would exceed those imposed on the defendants here. Courts and other parties may be encouraged to undertake burdensome and duplicative litigation. The administration of justice would suffer.<\/em> \u2014 Judge Denise L. Cote<\/p>\n

Everyone knows that if mom tells you no, it\u2019s not acceptable \u2014 even if tempting \u2014 to try to get approval from dad. It doesn\u2019t get any smarter if you replace mom and dad with the Southern District of New York and the Eastern District of Virginia.<\/p>\n

Last February, Skadden client and mobile gaming outfit Papaya Gaming\u2019s counterclaims against Skillz Platform were dismissed in the Southern District. At that point, Papaya moved to amend those claims and filed an \u201cessentially identical\u201d suit in Virginia. The Virginia action found its way back to New York and an understandably peeved Judge Cote.<\/p>\n

Papaya Gaming operates in the \u201creal-money skill-based\u201d mobile gaming market \u2014 which is apparently a term of art \u2014 running multiplayer tournaments where players compete for cash prizes. Theoretically, users compete against people, but Papaya was deploying bots in some of these tournaments without telling anyone. On occasion, a single human player would be competing against an entire field of bots. Skillz, one of Papaya\u2019s competitors, sued in March 2024, asserting a false advertising claim under the Lanham Act. Papaya eventually admitted it had been using bots until 2024 \u2014 but not before first trying to resist discovery by claiming Israeli law prevented it from producing records. (That gambit also failed.)<\/p>\n

Papaya fired back with counterclaims alleging Skillz had created a \u201cfalse front\u201d organization called 4FairPlay, which maintained a website encouraging consumers to file complaints about Papaya with state attorneys general. Judge Cote dismissed Papaya\u2019s counterclaims about the 4FairPlay website in February 2025. Papaya attempted to amend, and that earned a dismissal a month later.<\/p>\n

BUT, after filing its motion to amend \u2014 though before the denial \u2014 Papaya filed a new lawsuit in the Eastern District of Virginia against 4FairPlay, its operators, and related entities as defendants, asserting claims under Virginia law. Papaya\u2019s counsel then \u201cscrubbed\u201d the Virginia complaint to remove references to Skillz\u2019s direct involvement and delete allegations about bots \u2014 in what Judge Cote described as \u201can apparent attempt to circumvent the preclusion doctrines that its adversaries had identified in correspondence threatening sanctions.\u201d<\/p>\n

Judge Nachmanoff in the Eastern District of Virginia didn\u2019t mince words when he transferred the case to New York, stating that Papaya \u201cblatantly attempted to get a second bite at the apple by pursuing different but clearly related defendants in a different forum after Judge Cote conclusively rejected Papaya\u2019s counterclaim and motion for leave to file a second amended counterclaim on virtually identical claims.\u201d<\/p>\n

Once the case came back to Judge Cote, the strategy of playing the parents against each other was already, inevitably cooked.<\/p>\n

Judge Cote found that Papaya and Skadden \u201coperated in bad faith in filing the Virginia Action.\u201d The evidence of bad faith included the \u201cineffective scrubbing\u201d of the Virginia complaint to make it appear less duplicative and the \u201cstrained arguments\u201d attempting to distinguish the two litigations. The court explicitly identified the strategy at work: Papaya was pursuing claims against Skillz affiliates \u201cto place pressure on Skillz and thereby unreasonably increased the cost of litigation.\u201d<\/p>\n

Because the underlying Lanham Act case is still ongoing, with Skillz seeking over $700 million in damages. While that\u2019s a significant chunk of change, as the court noted, \u201clarge potential damages figures cannot excuse litigation tactics that improperly and unfairly increase the burden of litigation.\u201d Trial is slated to begin in April.<\/p>\n

This is a rough outcome for Skadden. The court\u2019s finding of bad faith \u2014 not \u201coopsie\u201d level negligence \u2014 is about as bad as a sanctions opinion gets. The only way this week could get any worse for Skadden is if they found out they spinelessly gave away $100 million<\/a> for no good reason.<\/p>\n

Oh<\/a>. <\/p>\n

Well, maybe the DOJ will be able to convince a court to allow it to reverse its own position from 24 hours before<\/a>. Failing that\u2026 maybe the government can try filling essentially identical claims in another court? I wonder if they could find a firm to help them do that pro bono?<\/p>\n

(Check out the full opinion and order on the next page\u2026)<\/em><\/p>\n

\n

\"Headshot\"Joe Patrice<\/a>\u00a0is a senior editor at Above the Law and co-host of Thinking Like A Lawyer<\/a>. Feel free to\u00a0email<\/a> any tips, questions, or comments. Follow him on\u00a0Twitter<\/a>\u00a0or Bluesky<\/a> if you\u2019re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search<\/a>.<\/em><\/strong><\/p>\n

1<\/strong> 2<\/a>Next \u00bb<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Imposition of sanctions is not to be undertaken lightly. It is particularly difficult to do so when attorneys of unblemished reputation and a distinguished law firm are among the sanctioned parties. But reluctance to enter sanctions cannot excuse a failure to impose them when they are warranted. If the filing of duplicative, vexatious litigation were […]<\/p>\n","protected":false},"author":3,"featured_media":145305,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16],"tags":[],"class_list":["post-145325","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-above_the_law"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/xira.com\/p\/wp-content\/uploads\/2026\/03\/Headshot-300x200-KdB5Ev.jpg?fit=300%2C200&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/145325","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/comments?post=145325"}],"version-history":[{"count":0,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/145325\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media\/145305"}],"wp:attachment":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media?parent=145325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/categories?post=145325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/tags?post=145325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}