According to a court brief I’ve just been emailed, a Pennsylvania court has allowed a lawsuit filed against Philip Rosedale and Linden Lab, makers of the virtual world of Second Life, to move forward despite Rosedale’s motion to dismiss the suit or have it arbitrated. The decision is significant in that the court has judged the SL Terms of Service to be insufficient to the job of adjudicating this particular dispute, and the judge in the case went so far as to characterize the ToS as a contract of adhesion — a contract that isn’t necessarily enforceable because it has more or less been forced on a party with weaker bargaining powers (i.e., the SL user) on a “take it or leave it” basis. The brief itself is linked from this Web page. The decision could have important ramifications for the way in which many virtual worlds come to be governed, possibly giving more rights to their residents than they have enjoyed before.
Pennsylvania lawyer Marc Bragg first filed suit against LL more than a year ago. The dispute has been a bit muddied by the fact that at least some of the assets in question — some virtual real estate that was confiscated from Bragg by LL — may have been acquired via an exploit. The brief refers specifically to a plot of land called “Taessot” (is there a Taessot sim? I can’t check at the moment), which Bragg acquired for US$300, and which LL later confiscated. Regardless of whether Taessot is eventually ruled to have been improperly acquired in the first place, this interim ruling sets an important precedent in the area of how and what the Terms of Service govern.
Linden Lab CEO Philip Rosedale, who is named as a defendant in the suit, had moved that claims against him be dismissed and that the dispute be heard in arbitration, since the LL Terms of Service seems to give the company that option. The court denied the motion for dismissal based on what seem standard legal grounds (though of course IANAL). But it also denied the motion to have the case arbitrated, and the reasons it gave could have broad ramifications for not just Second Life but for other virtual worlds and massively multiplayer online games.
The court filing is plain: “The TOS are a contract of adhesion,” it reads. A lawyer should certainly weigh in here on just what that means, but as far as I know — and I’ve looked into this somewhat while Peter Ludlow and I were writing our forthcoming book about virtual worlds — it at least means that LL can’t just point to the Terms of Service and claim that all SL users are unequivocally subject to its whims.
The court decision essentially holds LL to a higher standard than any virtual world company has been held before, as far as I know. In part, the decision grows out of the fact that real money is at play in Second Life, and out of LL’s and Rosedale’s relentless promotion of SL as a place where money can be earned. (I’m not speculating on this; it’s made explicit in the filing.) Essentially, what the court is saying is, “If you’re going to bill your world as an earning opportunity, you have to toe a more rigorous line in governing it” — which is exactly the argument Peter and I make in our book. To me, this looks like an important decision that could start to bring governance of virtual worlds up to the standard it needs to be — something more akin to the standards by which we govern the real world. At the very least, it’s nice to see a court take these issues seriously.