Bragg v. Linden Research Inc.

Linden Research Inc. (Linden) (defendant) was the operator of an online role-playing game called Second Life. Second Life is a virtual world wherein players use avatars to interact with other players. Using their avatars, players can form business ventures and use virtual Second Life currency to buy and sell property. Players pay taxes on virtual property in real money to Linden. In order to play Second Life, players must agree to its Terms of Service. To do so, players click a button to accept the terms. If players do not click the button, they cannot participate in Second Life. Second Life’s Terms of Service contained an arbitration clause hidden in its “General Provisions.” The arbitration clause required disputes to be arbitrated in San Francisco, and permitted Linden to modify the clause. Additionally, the arbitration clause required complainants to share the arbitration fees, and to keep arbitrations confidential. Generally, the Terms of Service permitted Linden at its discretion to suspend a player’s account, to refuse to allow a player to participate in Second Life, and to withhold players’ money. March Bragg (plaintiff) played Second Life and purchased virtual properties. Bragg purchased a parcel of land called “Taessot” for $300. Linden believed that Bragg had purchased Taessot improperly, and took Taessot away from Bragg. Further, Linden froze Bragg’s Second Life account, in effect confiscating Bragg’s other virtual properties and his virtual currency. Bragg sued Linden in Pennsylvania. Linden moved to compel Bragg to arbitrate in California pursuant to the arbitration clause in Second Life’s Terms of Service.