Arbitration Clause in Second Life TOS Found Unconscionable

http://bnablog.bna.com/techlaw/2007/06/arbitration_cla.html

Does this mean LL can no longer close down accounts for any reason they like?

No it means it has to be fair about the thing. A lot of companies say "i'm the boss and my tos say so" and you must bend over backwards to accomodate my methods to get into the good books with me again. IN other words they are asking them to operate fairly. They can ban/suspend accounts etc they just can't make you pay to outrageous costs like flying from another country to meet LL on its turf etc. Arbitration and mediation typically is supposed to take part on "neutral ground" and in a place both parties can agree to blah blah blah.

Anyhow I was wondering when someone would challenge LL TOS because in all honesy most TOS in most cases are pretty badly written and not particularly fair or legal, but the only way it gets sorted is when someone actually is put in a position of challenging them. Its also rarely done which is why TOS stand as they do regardless of how bad they are because face it how many people want to spend crazy amounts of money to prove that they are not properly done.

This kind of stuff will happen more and more often though as the net matures its all relatively new still and there is a long way to go before people start treating SL and the internet like the rest of the world. Even though the case itself was kinda sucky I think that the meaning of what happened in the end is not and its going to set a precident.

old news

Many thanks for the link.

I am so going to create an alt account called Arbitration Clause now

I'll AR you so you don't feel unloved. Which flavor of broadly offensive do you prefer? Would you like ice cream or pie with that?

LOL LOL

Wilhelm pretty well covered it accurately. I will add that in most jurisdictions in the US low cost mediation or arbitration is often offered through the courts, once the case is in litigation. In Los angeles County, CA, it is FREE!! To expect people to travel to San francisco and then pay for 3 high priced arbitrators is truly unconscionable. Its not meant to encourage settlement of cases but to create expensive hoops for people to jump through before they even get to the courthouse. this practice is WRONG and just plain shabby. As the judge quite correctly pointed out, the cost of arbitration the LL way would be in excess of the probable litigation costs.

If you must AR that account, AR her for being unconscionable.

It sounds like he probably was using a landbot.

Not a landbot. He found a glitch in the Land Auction system to win land at very low bidding prices (and apparently exploited it several times) and was banned for it.

The text of the Reuters story can be found here:

http://secondlife.reuters.com/stories/2007/05/31/judge-rules-against-one-sided-tos-in-bragg-lawsuit/

Well sadly then both LL and Bragg must be at fault. LL for their "we will win not matter what" policy and Bragg's cheating.

I think he did this to challenge the TOS hehe the court case is not of any consequence really he will loose and badly and he likely knows it. However the TOS is another issue

The reason its important to many is because its shapping how online contracts are being done. (actually a lot of offline contracts suck just as much and have to constantly be challenged) . The thing is this exposure says two things

1) second life is not a game (I have no idea what to call it so i will call it that because its just an easy word to type ^^)

2) even though second life is unique they still can't create terms of service which are almost impossible to meet and are one sided.

The actual court case and reason for this guy going to court will loose and I bet even he knows it. The fact of the matter though that if someone is saying its cheaper to go to court then to go through an arbitration process (which in my country is free for the little guy) means there is a problem.


thats the only thing "remarkable" about this case otherwise its just a bunch of hogwash. A lot of people including me have been waiting to see the TOS challenged (strange curiosity i guess hehe) and extremely curious to see what would happen. Well now we know. ^^

LOL

Nope. He was using the masterful exploit of "typing a URL by hand".

He found the auction ID numbers of publicly advertised land for auction ("About Land", and entered those ID numbers into the auction page URL (as all auction URLs ended with the auction ID number). That took him to a public page ready to accept bids for land. He bid and won. LL charged his credit card and delivered the land. Then they felt stupid over the complete lack of security and totally overreacted.

And here we are...

Personally, if I had been asked by LL back then, I'd have told them to take it on the chin, let him have that land, and tighten up security so it can't possily happen again.

The court's decision was that enforcing the arbitration clause against Bragg, based upon the particular facts of his case, would be unconscionable. It is not a blanket ruling that the arbitration clause is unenforceable in every case. On the other hand, I don't think it would be terribly hard for most Second Life users to show facts similar to Bragg's if they were to sue.

The decision also has precendential value only in that particular trial court. It wouldn't have have precedential value on the trial court in the next county over. I don't know much about Pennsylvania's court system, but I think an opinion would have to be delivered on the Superior Court level (a court of appeals) before it would have any precedential value on Pennsylvania courts as a whole.

A state case from Pennsylvania has no precedential value over any other state. Enough states creating similar precedents starts to become persuasive on other states considering the issue.

The Pennsylvania court was interpreting California law. California law would be precendential upon the Pennsylvania court in the particular context; however, a foreign court's interpretation of California law would not be precedential for a California court.

If I remember correctly, among the fifty states, California is one of the most liberal there is when it comes to the unconsionability doctrine.

What that means is this: It's a favorable decision for Second Life customers, unfavorable for Linden Labs, but does not spell the death of the arbitration clause in the Terms of Service yet. It will take more than one court decision to do that. The Bragg case may provide a blueprint for defeating the arbitration clause, but that has yet to be seen.

Thank you thank you THANK YOU for explaining the way all this works!

Nothing like shining a little light on something to put it in proper perspective.