Continuing our ongoing coverage of the Bragg vs Linden Lab filings, we move on to Robreno's 30 May orders, denying Rosedale's Motion to Dismiss, and Linden Lab's Motion to Compel Arbitration. Judge Eduardo Robreno, you may recall, is the federal court judge who has been assigned to this case.

Along the way Robreno declares the Second Life Terms of Service invalid, and indirectly, it would appear, the Terms of Service of most or all other Virtual Worlds and MMO's by precedent.

Robreno's decision to consider the Second Life Terms of Service as an unenforceable contract of adhesion seems to largely invalidate similar Terms of Service/End User License Agreements, like those of Blizzard, NCsoft, Microsoft and others. Most of these use essentially the same boilerplate terms with individualistic flourishes.

Most of them contain all the points of determination that Robreno uses to determine adhesion, and consequent unenforceability, and on the surface of them you could make a case that they fail to meet each of the tests Robreno applies.

Robreno holds the position that even if the Terms of Service comprises a contract of adhesion, they would still be valid and enforceable if there were any competitors.

Basically, Second Life is the only one that provides these facilities. Without an alternative or competitor that provides substantively the same facilities under alternative Terms of Service, Linden Lab cannot require a user to adhere to the Terms of Service on a take-it-or-leave-it basis, according to Robreno.

The arbitration clause in the Terms of Service is particular poison, and ultimately taints the whole agreement. It is is found to be unbalanced, burdensome and unilateral. Linden Lab cannot compel compliance with the Terms of Service (and, it would seem, nor can any other MMO whose Terms fail similar tests).

Robreno denies the motion to compel arbitration.

On to Philip Rosedale and whether the court has jurisdiction over him.

Bragg alleges that Rosedale's representations, being as they are at odds with Linden Lab's actual operation are fraudulent. That's more or less what this whole case is about. It's not about virtual property or money, it's about whether or not fraud is taking place.

Contacts with the state of Pennsylvania? Robreno says,

First, Bragg has provided evidence that Rosedale helped orchestrate a campaign at the national level to induce persons, including Bragg, to purchase virtual land and property on Second Life. As part of the national campaign, Bragg made representations that were distributed nationally, including in Pennsylvania. ... Rosedale's representations constitute part of the alleged fraudulent and deceptive conduct at the heart of Bragg's claims in this case.

Interactive contact with Bragg? Philip's past availability in Second Life nails him on that score. Robreno:

Significantly, participants could even interact with Rosedale's avatar on Second Life during town hall meetings that he held on the topic of virtual property. Viewed in context, Rosedale's marketing efforts in this case are more "interactive" rather than "passive."

But Rosedale is an employee of the company acting on its behalf, surely that takes away personal liability? No, says Robreno. While there's still a little doubt, Robreno feels the situation is clear enough:

It doesn't matter if you're acting on behalf of a company or not, you still have personal liability if you're doing the wrong thing. It's not yet been established that Rosedale has in fact done the wrong thing, of course - the purpose of this case is to determine that one way or another - but there is a case, and Rosedale's position as an employee does not shield him from being a defendant in this case.

In your own jurisdictions your legal mileage may vary. In some legal jurisdictions around the world, the executive officers and board of directors are personally liable for a wide variety of things ("individually and severally" as the phrase goes), in some cases extended to line-managers. Some legal systems feel hold this conveys a more immediate sense of responsibility to directors and officers.

Accordingly, Robreno denies the motion to remove Rosedale as a defendant in this case. You can read the whole order here (PDF 126Kbytes).