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Carl Evans, et al v. Linden Research

February 3, 2011

CARL EVANS, ET AL.,
PLAINTIFFS,
v.
LINDEN RESEARCH, INC., ET AL, DEFENDANTS.



The opinion of the court was delivered by: Eduardo C. Robreno, J.

MEMORANDUM

I. INTRODUCTION

Plaintiffs Carl Evans, Donald Spencer, Valerie Spencer, and Cindy Carter (collectively "Plaintiffs") initiated this contract and tort action against Defendants Linden Research, Inc. (the "Linden") and Philip Rosedale ("Rosedale"), (collectively "Defendants") on behalf of themselves and all others similarly situated.

Defendants bring three motions: (1) Motion to Dismiss Count I, arguing that Plaintiffs did not file their Complaint appropriately under the California Consumer Legal Remedies Act (CLRA);*fn1

(2) Motion to Dismiss Plaintiffs' Complaint in its entirety, arguing that the case must be brought in the Northern District of California pursuant to a mandatory forum selection clause in the relevant terms of service agreed to by the Plaintiffs; and (3) Motion to Transfer, arguing that if the Court does not dismiss Plaintiffs' Complaint, the case should be transferred to the Northern District of California as a more appropriate forum under 28 U.S.C. § 1404(a).*fn2

For the reasons set forth below, the Court finds that the mandatory forum selection clause included in Defendants' current Terms of Service applies. Thus, Defendants' Motion to Dismiss is granted in part and denied in part, and the case will be transferred to the Northern District of California.

II. BACKGROUND

Defendants are operators of Second Life, a virtual world, and Plaintiffs were participants. In this virtual world participants create avatars and their avatars have friendships, make contracts, etc. Participants were given the opportunity to buy and sell virtual goods including virtual land. Plaintiffs allege that Linden and Rosedale advertised the idea that the virtual property rights of participants were going to be protected. Plaintiffs contend that Defendants unlawfully confiscated their virtual property and denied them access to their virtual worlds.

Plaintiffs brought their complaint to this Court on April 15, 2010, and their amended complaint on June 16, 2010. Plaintiffs bring this action on behalf of themselves and all others similarly situated, seeking to establish a class action. Plaintiffs allege these counts: (1) violation of the California Consumer Legal Remedies Act, (2) violation of the California False Advertising Law (Cal. Bus. & Prof. Code § 17500), (3) violation of California Civil Code § 1812.600, (4) violation of the California Unfair Competition Law (Cal. Bus. & Prof. Code § 17200), (5) Fraud/Fraud in the Inducement, (6) Conversion, (7) Intentional Interference with Contractual Relations/Prospective Economic Advantage, (8) Unjust Enrichment, (9) Wrongful Expulsion.

On July 9, 2010, Defendants filed a Motion to Dismiss arguing that the forum selection clause of their terms of service require Plaintiffs to file in the Northern District of California. Simultaneously, Defendants filed an alternative Motion to Transfer arguing that this case should be transferred to the Northern District of California under 1404(a).

On July 30, 2010, Plaintiffs filed their opposition to Defendants' Motion to Dismiss and Motion to Transfer, simultaneously raising a Motion for Leave to Conduct Discovery. On September 2, 2010, Defendants filed a Motion for Leave to Reply Brief in Support of their Motions to Dismiss and Transfer.

On September 9, 2010, after a hearing on Defendants' Motion to Dismiss the Court ordered supplemental briefing requesting the following information for each of Plaintiffs' Second Life accounts: (1) when the account was opened; (2) what Terms of Service governed the account when it was opened; and (3) if and when the Plaintiff later agreed to updated Terms of Service. Defendants filed their supplemental briefing, providing the requested information, on September 30, 2010. Plaintiffs responded on October 11, 2010. Defendants and Plaintiffs filed reply briefs on October 13, 2010 and October 15, 2010, respectively.

III. DISCUSSION

Defendants' move to dismiss for improper venue. They argue that the only Plaintiff that resides within this Court's district is Carl Evans. Defendants argue that Carl Evans agreed to the newly revised Terms of Service (TOS) that included a forum selection clause, requiring Plaintiffs to bring suit in the Northern District of California. Defendants argue that the venue provision is valid and enforceable. Defendants argue that TOSs that are offered on a "take it or leave it basis" are not de facto unconscionable and that ...


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