Thursday, June 27, 2013

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Class Action Lawsuit Against Linden Lab for Suspended Accounts Settled for $172,000 Paid in Linden Dollars UPDATE: Legal Expert Says "Looks like Linden Lab lost"

If you're a lawyer or another kind of expert in American legal practice and you have a subscription to American Lawyer magazine, I'd love your help. Thing is, I'm not a lawyer nor do I play one on the Internet, nor can I read in full The American Lawyer's article on the matter, since it's paywalled, but it looks like several Second Life landowners who lost their SL property after their accounts were suspended just accepted a class action settlement from Linden Lab. And the class action lawsuit was filed on behalf of 57,000+ SL users in a particular category of land owners. Specifically, as this 2012 class action granting decision designates:

Linden Lab class action settlement

The settlement amount paid by Linden is small, reported in a law blog as being paid to the defendants in Linden Dollars: 43 million L$, or USD $172,000. That it's being paid in Linden Dollars suggests it's being given to active SL users. Beyond that, I'm not going to speculate any further, but I'd love a legal expert to (carefully!) do so in Comments. Read the full class action decision here.

Update, 11:15AM SLT: Just got an e-mail from Agenda Faromet, avatar for an RL legal expert, who gave me the following quick-take analysis:

"Settlements like that are usually pretty hush-hush, neither side admitting any fault but both sides at least getting something. This one looks a lot like the Bragg settlement, which was a big loss for Linden, and it's a damn shame the class couldn't keep going long enough to get an actual decision. I would have loved to get the precedent... but I absolutely understand how expensive and emotionally draining a suit like this is to the plaintiffs.

"Short version: looks like Linden Lab lost, just like it did in Bragg. But it looks like the plaintiffs had a very hard time proving significant economic damages, so LL didn't lose much. I do wonder what else came out of the settlement other than the monetary damages."

I wonder too. More comments welcome in Comments below.

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Ghosty Kips

No legal expert needed to know what when those lindens are cashed out, LL will be taking it's cut.

Damien Fate

That's pretty funny, not only can LL basically PRINT that money, they stand to earn about $8k back when it's cashed out.


a casino giving back


This is the reason I left Second Life for good two years ago.

Wolf Baginski

It's tricky, but I would not be surprised to see a change in the wording of the TOS. I think the basic principle is likely common to Europe: if you deposit money with a company for future purchases, there are legal constraints on what they can do if they don't want you as a customer. At one extreme you are likely to be an unsecured creditor in bankruptcy proceedings, and get sod all. At the other, you get a refund.

What's different are the virtual goods, bought through Linden Labs but not from Linden Labs, and only usable in the Linden Labs sandbox.

The devil is in the details.

Arcadia Codesmith

It looks like a small victory for virtual property rights.

I guess I should join the class and get my $3 in tokens. That's adequate compensation... for about 3 minutes of the hundreds of hours I spent creating what was in my inventory when they wiped it.

David Cartier

My question would be: How do I join Subclass A? Linden Lab deleted my CHARTER membership and huge inventory because of some stupid billing error while I was away in Southeast Asia. I suppose I should be happy that I was able to get the name back. But I'm not.

Pussycat Catnap

I suspect what they got back was an estimate of the value of their holdings in SL when they were banned.

The precedent that would set IF it had been a trial verdict would be such bannings requiring buying out the person's inworld content.

So I suspect a TOS change to make sure no such payout is ever required. I think one already exists (not sure), and if so would imply these folks were banned before it came to be.

As a settlement it sets no precedent. But it can get your legal department to start looking over your terms sheet... :)

Connie Arida

I somehow doubt a TOS written by any company would override state statutes as regards consumer law.

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