first off,
Quote:
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If a player shows his hand, it is declared a dead hand. Happens to be a standing rule of poker.
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absolutely wrong. not in my experience and not according to any cash game rulebook i have ever read.
as soon as the button shows her hand, the dealer should have quickly pointed out the fact that she hadn't acted yet and insisted that she do so immediately. hopefully, this would stop everyone else from turning over their hands. i would expect a reasonably skilled and attentive dealer to be able to do so. however, the more offensive gaffe by the dealer is to go so far as to award the pot to a hand that had not even acted. the dealer should probably be written up for this.
failing this, it is still the responsibility of the other players to protect their action and not turn over their own hands until they are satisfied that action is complete.
additionally, if it is determined based on past evidence that the button intentionally caused this situation as a potential angle, she should be dealt with appropriate progressive discipline.. e.g. warning, suspension, permanent barring. though, this certainly doesn't sound like the situation described.