Despite having been an attorney for a number of years and been involved in and litigated many cases, I never cease to marvel at the economic incentives that drive the tremendous amount of economic waste that has permeated our legal system.
Linden Labs filed a Motion to Dismiss (click to download) the class action complaint in the Evans, et al v. Linden Labs, et al., virtual land dispute currently pending in the Eastern District of Pennsylvania. Before looking at the substance of the motion itself, it is overly common and I believe an abused procedural tool to exercise the right to file a motion to dismiss as a routine legal tactic. I cannot recall a case where one was not filed and it seems to have become, but was not intended to be, a standard responses just in case the judge might decide to terminate the matter at a very early procedural stage, i.e., before the parties' claims can be fully heard. Without getting totally into the boring technicalities, the standard of review a judge applies to a review of such motions in deciding whether to grant and terminate the case, or deny / dismiss it and allow the case to proceed, as consumers (as opposed to the judge), we should read such a motion in light of the obvious economic and professional incentives that might motivate such a filing.
The first motivation is somewhat obvious, legal fees. These motions generally require a great deal of time and consequent legal expense i.e., fee income to the attorneys that file them if those attorneys are working on an hourly basis. Arguably, if granted, that up front investment is tremendous leverage, because compared to the cost of an entire lawsuit through to jury verdict, the cost of such a motion is minimal, but if the case is not terminated, or not likely to terminate as a result of the motion, then the cost is one component that increases the entire cost of the lawsuit, the time and cost burden on our legal system, and serves only to justify the position that only the wealthy can truly afford their day(s) in court and a slice of justice. Remembering that the american civil legal system is just as much a resource / wealth shifting mechanism as it is a venue to vent / define our rights, a more thorough economic analysis may result in other conclusions.
The second biggest motivation I've noticed for the use of these motions, which is really a subpart of the first motivation, is to cause delay / harass or impose additional burdens on a smaller party up front in the litigation in an effort to intimidate or deter further concentrated efforts because the costs become too great.
A less obvious motivation is for the lawyer to protect him / herself against later malpractice suits from a client who later, after having spent many thousands in litigation might otherwise claim against his attorney that he / she should have filed a motion to dismiss early on and saved his client the extraordinary costs that were ultimately endured. Consumers often chant that lawyers make all our lives more difficult, and while maybe partially true, lawyers must have clients to proceed into court and so we as clients should share some of the accountability for the position in which we find ourselves. It is interesting that the majority of us feel that we do not want others, especially the government, deciding our choices for us, i.e, we want to self-govern to the fullest extent possible. Then, when numerous ridiculous matters are filed in court by lawyers representing clients who have decided that they want to pursue the american dream, protect and enforce their rights, or have those rights better defined for themselves and others, we collectively blame the lawyers / legal profession for pursuing that which forms a profound fundamental component of our democratic society.
Regardless of motivation, however, any attorney may file such a motion provided they believe the position has legal and factual merit without regard to the chance of success and this point is important to our way of life. As a society our majority policy seems to be that we would prefer that the legal system's resources be stretched to the point of breaking rather than the courts intimidating lawyers into reducing their number of motion and the consequent chilling effect such deterrence could have on our civil and constitutional rights.. but I digress....
Linden and Rosedale's Motion to Dismiss first requests the matter be dismissed, for reasons discussed below, but if not dismissed, they ask the Court in Pennsylvania to transfer the matter to California. Motions are often postured with the ultimate request, a gift of sorts if granted, but knowing that to be unlikely, make an alternative request believed to be more probable. Burden on defendants to litigate in a state different that where its business is located is usually a legitimate request and must be balanced with the burden imposed on the plaintiffs, the court, and the interests of justice.
Clearly, for Linden to litigate in California would save them some time and expense since all their records are presumably located there as are their offices and personnel that might have to participate in depositions and court proceedings; however, from articles about the company, the servers and virtual items / land are located in other states around the country so retrieval and access to evidence for litigation in this digital age is not burdensome for them, one would think, especially for such a large company like Linden, to participate in any court in the country... especially as they sell their services and provide the same information that would be collected for use in such a lawsuit, to all their users in every state in the union as part of their individual user / avatar accounts on a persistent and concurrent basis. Clearly, as well, the named plaintiffs appear from the Complaint to have little by comparison to Linden in the way of resources and it would be far more difficult to require them to participate in depositions and court proceedings in California than it would in Pennsyvlania, or along the eastern seaboard. It seems a bit unfair, if you accept the plaintiffs' claims as true (which the judge must do for purposes of deciding a motion to dismiss), to ask the plaintiffs whose resources, land and virtual items, and money were taken, to require them to incur a greater burden and go to California to get back what Linden said was their's because it makes it easier for Linden to defend itself, again, when Linden had no problem selling those items and services to the plaintiffs on the east coast.
Linden has put forth their Terms of Service agreement as the basis for moving the case to California, but of course, the TOS they put forward seems to be the most current. This issue of the TOS and its enforceability will always seems to me, be a point of obstruction for Linden's future growth. Critical factual and legal issues must be resolved before the transfer issue can be decided. For example, are the plaintiffs who were terminated before the current TOS was instituted required to comply with the current version to assert their state rights? If not terminated during the old versions of the TOS, then are they automatically bound by the new TOS even though they had no opportunity to negotiate its terms when it was unilaterally changed by Linden after those plaintiffs had invested their time and money in reliance on the terms of the old TOS and the only option was to walk away from the property they were told they owned? Is the TOS enforceable under California law, and if only parts are, which parts of which versions and to whom do the enforceable parts apply? Is there a shortcut resolution to all of this convolution that Linden's public promises and later unilateral modifications to the terms of the TOS appear to create?
Linden contends it is reasonable to require a complainant to go to California to pursue a claim despite that most claims might average less than $50 perhaps? and the cost to do so would be in the thousands. Participation in a binding arbitration over the phone as an alternative, though less expensive, doesn't really seem reasonable since it's an "option" that is really not an option given the cost to travel to California. Couple the above with the fact that since Linden requires the arbitration to be binding means users give up their very important appeal rights. Lastly, Linden also states if you lose, you could have to pay them $1,000 for counsel fees or some such thing, all of which rings unreasonably and fundamentally unfair. California courts look at these situations and leave to the judge whether the "option" or methodology dictated by the company is reasonable or fundamentally fair, and leading courts in California seem to agree it is not.
For example, in a Paypal case: "The record in this case shows that PayPal serves millions of
customers across the United States and that the amount of the average
transaction through PayPal is $55.00. Although
PayPal cites to
unpublished or out-of-state authority holding that such facts do not warrant a
finding of unconscionability, PayPal cites no California
authority holding that it is reasonable for individual consumers from throughout
the country to travel to one locale to arbitrate claims involving such minimal
sums. Limiting venue to PayPal's backyard appears to
be yet one more means by which the arbitration clause serves to shield PayPal from liability
instead of providing a neutral forum in which to arbitrate disputes. See, e.g., Bolter, 87 Cal.App.4th at 909, 104 Cal.Rptr.2d 888 (finding that enforcement of forum
selection clause providing that claims are arbitrated exclusively in Utah would
be cost prohibitive in light of fact that the potential claimants located around
the country would be required to retain counsel familiar with Utah law)".
And in an Earthlink case: "The California Court of Appeals for the Second Appellate District found that the forum selection clause in defendant EarthLink, Inc.’s (“EarthLink”) membership contract, which would have required consumers (in this case, putative class plaintiff California residents), to travel 2,000 miles to Georgia in order to recover claims of $40 to $50, is unenforceable because it is unreasonable as a matter of law. Additionally, the Court held that the contract’s class action waiver was procedurally unconscionable because it took the form of an adhesion contract with no opportunity to opt out, and also substantively unconscionable, because, if the allegations were found to be true, EarthLink would have been cheating numerous customers out of small sums of money."
The Motion then immediately goes into a tirade of alleged statements by Mr. Evans, a plaintiff. containing a lot of explicatives. Besides the bold nature of the prose quoted without any redaction or apology to the Court for repeating only the basest of comments purportedly by Mr. Evans, Linden does not tell us how these statements have any impact on the legal issues raised by the motion. They appear to presented for the purpose of shocking the court. It is even more interesting to realize that all conversations in this "private virtual world" are in fact not private, but appear to be reviewed by Linden employees. Now, we all know that any computer system can be designed so that such language / words can be automatically redacted by the system without exposing any other users, so one must ask, why didn't Linden do so if such language is inconsistent with their company or business ethics? And if they did not, and they know that Mr. Evans was fraudulently creating numerous accounts under different names, why didn't they ban his computer's mac address so that no log ins from that particular computer, or any computer identified as associated with him was precluded from logging in. This begs the question then that if they did not prevent him from participating, why accuse him now of bad language via use of an avatar to the court when they chose not to cut off his human participation permanently prior to the lawsuit being filed.
Here are some of the quotes. One has to wonder whether the axiom that any news, even bad news, is good for business because it generates curiosity and in this case that could translate to new users signing up to see what all the noise is about?
"... you fucking whore your mother and father should burn in hell you rat cunt if I could get near you I wold spit in your skank mouth and shove a bat up your filth ass you little cry baby bith [sic]" at page 13 of the Motion to Dismiss. No explanation or history of what may have provoked this alleged outburst is provided by Linden.
"... good morning you rat cunt i started this account just to fucking rip your head off you worthless piece of shit you supposed to mentor not men whore you ratted on my man i wish i could get may handn around your thoart [sic]" Same lack of additional history or context, unfortunately.
..... more to come as I get through the pleading and its exhibits.