Virtual Land Dispute Spills Over Into Real World (player sues LindenLab)

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-08-2006/0004356685&EDATE=

awsuit filed in Pennsylvania seeks to collect damages from gaming company
on virtual land purchase

WEST CHESTER, Pa., May 8 /PRNewswire/ -- On May 1st, 2006, a possible
first-of-its-kind lawsuit was filed in local district justice court to seek
remedy for a virtual land deal gone sour. The suit seeks financial damages
in the thousands, in part for a breach of a virtual land auction contract
and for violation of the Pennsylvania Unfair Trade Practices and Consumer
Protection Law. This suit is unique because the land doesn't actually
exist.
Marc Woebegone, known in the real word as Marc Bragg, has filed suit in
the local district justice court in West Chester, Pennsylvania, a small
town located 25 miles west of Philadelphia, PA. Bragg purchased virtual
land, known in Second Life as "sims," using real US currency. Bragg learned
of a way to purchase virtual land significantly below market values, and
invested thousands of US dollars purchasing land in an attempt to resell
this land at a profit. Bragg claims that employees of Linden Research,
Inc., the company who creates, manages and maintains this online world,
allowed the auction to be created, and after Bragg paid US dollars for the
land, terminated Bragg's account, without explanation, without citing any
violation of community policy, and have since refused offer a credit or a
refund. Bragg's calls to customer service and Linden Lab's legal counsel
have gone unanswered. Bragg's final option? Seek relief in a real world
court.
Second Life is one of the many real-life Internet gaming phenomena to
hit the market in recent years. This game allows players to gamble, have
adult encounters, and buy and sell real estate, all inside a virtual world.
Some players have turned their virtual endeavors into real-world incomes by
creating virtual clothing stores, dance bars, and adult night clubs. It has
been speculated that there are in-world players who are collecting
six-figure real-world incomes from their virtual entrepreneurial efforts.
"This is probably the first dispute of its kind," says Bragg, an
attorney licensed in Pennsylvania, New Jersey, and California. "This suit
challenges the legitimacy of a virtual intangible purchase of an asset."
Bragg notes that this lawsuit brings to light some of the issues that have
not been addressed in the real world about these popular sites. Because
this Internet game uses real US currency and its in-game currency can be
converted back to US currency, Bragg questions how items like gambling
revenues, income from virtual land sales, and other legal issues
surrounding virtual purchases will be addressed by Linden Lab and other
companies like it who establish and control these gaming web sites.
Second Life's creator, Linden Lab (Linden Research, Inc.), a San
Francisco, CA-based company, was founded in 1999. Second Life has since
grown with a population of over 200,000 residents with an economy claimed
to be worth over US $60M per year. The game facilitates an average of US
$250,000 daily from its users that are used for purchases of virtual items
like cars, homes, clothing, and land. These monies are converted into
Lindens, the Second Life form of currency, which operates on its own
exchange. The company has attracted over $11M in venture capital, and has
backing from some high- profile players like Jeff Bezos, founder of
Amazon.com.
Bragg hopes that this dispute will be resolved quickly so he can go
back to his real-world life. "These games are like the virtual Wild West,"
Bragg states, "but Linden Lab is still obligated to honor real-world
contract law and consumer law, even if their world doesn't really exist."
MORE INFORMATION:

Marc Bragg:
[email]msb@lawy-ers.com[/email]
http://www.chescolawyers.com
1-484-631-0092

Linden Labs & Second Life:
http://www.LindenLab.com
http://www.SecondLife.com


SOURCE Law Offices of Marc S. Bragg
Web Site: http://www.LindenLab.com http://www.SecondLife.com
http://www.chescolawyers.com

I think he's representing himself. It appears that he is an attorney. If that's the case, he won't spend too much more than his time. He's suing them in PA though. I wonder what it will cost LL to defend themselves.

I'm really interested to know the details.

Did the offender offer to pay LL the difference, does LL hold a bunch of the hackers linden in suspension.

was the offender suspended or permabanned? etc...

but i want all the details.

instead it'll prolyl be settle and i'll never know

I know I'd rather settle for $20.00 or something than defend myself on the other side of the country.

Milk LL to the bone... File the lawsuit in Federal Court too... That'll get'm...

Hmmm, I suspect he might have to pay court costs if he loses.

LL has reason to persue this as a warning to anyone else who tries to exploit loopholes in the system.

However, I do not know all the facts so it's hard to say how this will proceed or whether it should (or should not).

Probably next to nothing.

Most companies have a statement buried down there somewhere that all claims brought against them must be done in their own state - making it a tossout case.

Seeing some of the arguments stated in forums here, I have some sense of how well this is going to go over in a courtroom.

The articles says that Bragg is "an attorney licensed in Pennsylvania, New Jersey, and California." My understanding is that Linden Labs are a Californian company.

I presume that Marc Bragg has therefore chosen to bring his action in Pennsylvania for some tactical reason that is slightly more complex than the fact he hasn't read the small print.

As for the accusatioins that he is an idiot: he may well be, but it might also suit him professionally to try to establish himself as an expert in a new and untried area of law. Not because he needs his $20 back but because this is an area of law that is going to get very big very soon. Check out the number of threads here about using the DMCA to stop people stealing other people's work; the worries over using RL logos, etc.

If LL succeed in their aim of geting a million members by 2010 (and personally I hope they do) then sooner or later there are going to be RL legal questions about how "virtual" the gambling in SL is, and how taxable users' income is, among many other things.

At that point quite a few people are likely to find themselves looking for "expert" legal advice.

We know very little about the specific facts of this case (how much is owed, why the account was terminated, what the hack was, and so on) so it is impossible to say, on current evidence, whether or not Marc Bragg has a real case or not.

But a lawyer seeking to open up a new area of law? Sounds like a scary kind of career advancement to me

With claims like that this should end up being fun.

As to what LL can do. LL can countersue and seek damages for the hacking. All work related to fixing the outcome of the hacks he did can be attributed to him and they can easily start of with quite liberal figures.

If the last three days data can be extrapolated (always very risky) than I have SL exceeding a million members by the end of 2008.

On the basis that the link to the news article is genuine (no disrespect intended) I respect his right to seek legal recourse via the Court system. On that basis alone I believe we should all stand up and appluade him.


Of course the rights and wrongs of the case will be decided by due legal process. But for too long now virtual reality worlds have assumed they are beyond the law. This action will clearly establish they are not, win or loose

Regards

Paul

But that, I'm afraid, is why many suits get filed. Too many.

Like most if not all of us, I haven't what I'd call the comprehensive facts either.
But:
To my understanding, when one uses a systems flaws in place to unfairly gain an asset at an obscene fraction it's true value against the accepted practices of that system and claims foul when that system catches up to his methods, does not have the right to seek damages when the leveraged loophole exploitation doesn't work out.
Freezing his SL account was always, and has always been up to LL as clearly outlined per TOS.




Refunding of his money is a question for the courts, no doubt. But further damages? as:The "in part" shouldn't be glossed over--for nowhere is it in this text (or others found) outline what the rest of that implication denotes in clear and present terms. Further, it could be argued it implies he is perhaps entitled to more and may reseverve the right to seek further damages as a seperate action. My sense is he's not after his money alone--I agree, some things like "ground-breaking" law in the same breath as your name remain priceless in the law firm's conference rooms, regardless of actual outcome.

One thing that I can't get out of my head: You don't spend that many years preparing to be a lawyer (or anything else for that matter, in that many states, no less) and suddenly stop thinking like one when you pick up the credit card. No. If anything, it goes into overdrive: CYA ad nauseum. Especially with one's own money...
As a lawyer himself, I doubt that he'd risk dollar-one on a method that he believed himself of having little legal standing to defend if caught using it.

Right is right, wrong is wrong.
It takes no more legalese to render clearer.
The simple question I find myself repeatedly asking is:
Which contract was breached first--the auction, or the TOS?
I await the facts that answer this, as I believe we all are.

I propose he breached his TOS the moment he failed to UPHOLD the very practices, policies and yes, Laws in place IN and AROUND the TOS (including the consumer law and perhaps even the very Pennsylvania Unfair Trade Practices, above) and report the method used to LL in good faith.
but He didn't.
Instead, he risked money in it to gain more money at the unfair advantage he had to work in deliberate fashion to find, and then act accordingly to leverage.

But Paulismyname is right--it does call the question of Virtual Law, though the effectiveness of his endeavour has yet to be decided. In those terms, if that's all the plaintiff sought--he won the battle.
The war, however, isn't up to either LL or him now but the due process of law.
For that, I am grateful.

It has been said of great lawyers that they regard the spirit of it's intent, and uphold and defend it regardless of any audience, whether or not it is specificly provided against, or how it may profit them or thier clients handsomely not to.
This is the bond of trust with the public they should be held to, for it is the very loom on which we weave true and fair laws for everyone, that apply to anyone, everytime.
Is that an unrealistic or naive view? Perhaps. But then, all leaps of faith seem insane to someone, do they not?

Personally I don't expect this to break new ground. LL does not need to do anything special to defend themself. He used hacking which makes any claims of a contract ridiculous.

If LL wanted to, they'd just invoke the recently enacted computer hacking laws and put HIM behind bars. Especially if he circumvented their system, which is seems like he did. No different than me going to a bank website, exploiting some .asp hole, and making off with a bunch of loot.

We will see though, for all we know this guy is angling to get more business, and this is only the shot across the bow - he may totally expect to lose, but he is probably loving the free publicity (other than paying for the original PR Newswire story himself.)

I still maintain this guy is a jackass.

Maxx, earlier on in this dispute I used the argument that in real life a trader on the Japan stock market sold off by error a large number of shares. That caused markets to react worldwide. Once you enter into a share transaction with a stockbroker the deal is done, right or wrong and cannot be undone, including errors in all normal circumstances.

I accepted the view from another land trader here that if that was enforced in Second Life it would cause problems, but nevertheless the auction process is a type of traded bargain process, akin to share trading.

I think that needs to be clarified legally and by real life law, not Linden TOS. After all the money risked had fungible value unlike Lindon Dollars, another fraught issue which may well come back to haunt them

I believe we will all potentially gain from "due process". One of the grips of dealing in Second Life is the issue of contract enforcement, if this case proceeds it will demonstrate due process applies here, and rightfully so in my not so humble opinion

I do not personally wish now to take sides on the legal process, that hopefully will be decided by more qualified people than myself (in US law) but I am very pleased it is happening

Hey this guy lives just a few miles from me. Maybe I'll have to go lay RL eyeballs on him.

Lindens are fungible, and have value because they are people willing to exchange my lindens for other items of value (such as US dollers)

I don't have anything actually useful to add to this thread, I just feel pedantic tonight.

I will freely admit I know nothing about any part of US law in any detail. Any result is possible as far as I can judge the merits of the case - simply because I just can't judge them.

But I'm irresistably reminded of the quote about the person in court who represents themselves...

I don't this guy from Adam IRL or SL, but I'll wait to hear the outcome and see if he really does have a fool for client.

As far as what happened to his account...

Apparently he was turned into an "unperson".

Marc had purchased one of my products, and when I went to send out bugfix updates, I couldn't find him at all. He's not in find people, he's just gone.

Why don't you lay RL fists on him too... the dipsh*t.

P2

as most people said yes they could 1 turn computing laws on him and put him behind bars... they could also on top of it or just add in a counter suite due to the methodology of which he bought the land..... All in all if this guy actually makes it to trial he will either end up paying LL what he should of starters which if it was thousands bought at small 3-5 dolalr intervals and he spent actual thousands then he's looking at mabye 200K in charges as far as what he owes LL. Even suing in PA if this makes it to court he will end up screwed badly and im laughing my ass off in my chair right now this is quite funny lol....

Pardon moi?

As a journalist you are supposed to report the news, not make it or for that matter offer violence -

under msot of the contractual things you accept when you sign up for virtual worlds prevents most legal issues to even be taken against virtual companies they are allowed to terminate your service at any time they feel like and its stipulated that they can. you can try to prove otherwise but it'd cost alot to do it and be stupid . If in fact he hacked the system he screwed himself and now owe's LL a bit of money because of it on top of legal fee's and court costs on his end bringing the suite would be costly to him and may end up with him behind bars as well.

He is trying to work the system to make money and its obvious ultimately if it gets to court he'll get in alottttttt of trouble. On top of all this he may find himself in recourse under his profession as far as keeping it as a profession because if he in fact hacked the system and loses he go bye bye as a lawyer lol.

Sadly we got alot of halfwits out there that pull this BS and its funny to some degree to see what they do. I dont think it will make it to court officially but we'll see...

Lina. I have a two monitor computer. I am here and also via another site looking ast the markets. Dow is up as I type 31.06 at 11615, the Fed chairman may signal an end to the run of interest rate rises tommorrow, that may push the Dow to highs beyond that of 1999. FT100 is up 39 points at 6106, natural resources are doing well, from Anglo American to Xstrata, well they are all up again and the collectives I monitor, First State Global Resources, J P MOrgan Natural resources, are pushing all time highs. Rab Capital surprised the city when it disclosed it had doubled its assets to more than £4 billion, not surprising when most of its hedge fund activity is in the AIM mining stocks, a wirlpool of bidding frenzy.........

Now which world is real to YOU. I know one thing, law applies in the virtual world I have discribed above. I personally think that is good because law is about the emergence of civilisation and the ability to rub alone together in relative peace knowing what to broadly expect