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TexLaw, Attorney
Category: Legal
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Experience:  Lead trial/International commercial attorney licensed 11 yrs
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Regarding virtual item trading. On 5/15/2012 a PC game

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Regarding virtual item trading.

On 5/15/2012 a PC game called "Diablo 3" was released by Blizzard Entertainment. The game is priced at $59.99 for regular edition, and $99.99 for collector's edition. The game requires no additional fee to play, however, it does require internet connection and the player has to be online to play. On 6/12/2012, Blizzard Entertainment introduced a new feature called "Real Money Auction House" in the game. This feature allows players to list anything their characters picked up in game for auction, and other players can use U.S. dollars to purchase that item for their characters to use. Blizzard Entertainment will charge 15% transaction fee of the final earnings from any item that is sold in the Real Money Auction House.

Since launch, players across the nation have been experiencing various issues, including accounts hacked and connection issues generated from Blizzard Entertainment's game hosting servers incapability of handling heavy traffic and provide secure environment. Players have not been able to play the game the way they wanted to, and are unable to claim refund from Blizzard Entertainment.

As for the Real Money Auction House, players have been experiencing issues regarding won items not being delivered within a reasonable timeframe after the fee is charged. Furthermore, Blizzard Entertainment has intentionally "downgraded" or "devalued" a certain range of items that were sold in the Real Money Auction House. Blizzard Entertainment issued no refund policy for the items affected, and gave no warning before performing the downgrade.

I would like to ask an attorney if Blizzard Entertainment is qualified for fraudulent business practice, or in violation of any consumer law.

I would also like to know if a case can be built to sue Blizzard Entertainment and its affiliation for deliberately wasting Diablo 3 players' time and effort, and fails to provide a confident and trustworthy environment to its customers.

Thank you!!
Are the items which are sold through Real Money Auction House virtual items to be used by players characters in the game?
Customer: replied 5 years ago.
Yes. The virtual items that are sold through Real Money Auction House are to be used by players' characters in the game.
This is extremely interesting. . The fact that the game is played over the internet and goes beyond US borders creates jurisdictional issues. However, one could assume there is a class action possible for users in the United States. You are located in California, which is one of the easier places to start a class action (mind you, its not ever that easy...but California at least allows them to go forward more often than other states).

There are three different scenarios here which lead to legal claims:

The first the failure of Blizzard Entertainment to provide the network capacity to handle the heavy traffic of the game resulting in the users not being able to play the game as promised. This would trigger claims under the California Business and Professionals Code, the for consumer misrepresentations regarding the quality and quantity of the service offered. In other words, Blizzard Entertainment represented that it would provide access to a functioning gaming system. It was aware of the amount of people that purchased the game and should have had the network capacity to handle the traffic generated by the game offered to the public. Its failure to offer what was promised was an actionable misrepresentation. There would also be a state law claim for breach of implied warranty of merchantability, i.e., the product doesn't work as it was promised.

The failure to provide a gaming network that functions as expected potentially breaches an implied warranty under the Magnuson Moss Warranty-Federal Trade Commission Improvements Act (15 U.S.C. §§ 2301-2312). This is a federal claim in addition to the state claim above.

The failure of Blizzard Entertainment to protect the financial information of its users is also potentially something one can base a claim on. Blizzard Entertainment created an online market place and thus took on a duty to create a secure one. If it was negligent in its design and implementation of this market place, i.e., it did not do something that it should have to provide security, then it would be liable for damages caused as a result. This would be a much harder claim to bring as a class action as there is no uniformity in the damages caused under the fact scenario presented. Nevertheless, it is potentially a claim one could bring should one experience a devastating loss of financial information.

The most interesting claim to me is the one that comes from Blizzard Entertainment's downgrading of items in the game that had a previous market value assigned to them and were traded for money through Real Money Auction House ("RMAH"). Blizzard takes a cut of every item sold, so by unilaterally changing the value of the items in an arbitrary manner it can falsely influence the market. This violates consumer protection laws and might even violated federal trade commission laws.

As the claim is interesting, you might think of approaching some plaintiffs attorneys in CA to see if anyone is interested.

Please respond back with any further questions or if you need clarification on any of these points.

Best Regards,
Zachary D. Norris
Customer: replied 5 years ago.

How would I start a class action against Blizzard Entertainment in CA?

Assuming I were to start a class action against the company on their violation to the consumer protection laws and the federal trade commission laws (changing to value of the items and falsely influence the market), how do I begin and what would be the process? Please be as detail as possible, thanks!!

To start a class action, you need to hire a class action attorney, which should be easy to find in California. However, in order to get their attention, then you need to be able to talk to them about the size of the damages. You need to be able to see if you can find out how many people use RMAH, how many people are playing Diablo, etc.

You also need to take a look at what the average transaction is over RMAH so you can talk about that to the attorneys.

The reason this is important is that a class action requires being able to identify potential members of the class who suffered a loss because of the actions by Blizzard Entertainment. You will also have to hire experts (likely in computer science and accounting) to make a prima facie case on how the misdeeds of Blizzard Entertainment damaged the class. In short, starting a class action takes a lot of money. So you would need to be able to show the lawyers that are handling the case that there is potential for a lot of money to be made so that they will invest the time and their own money into the case to get it certified.

You are asking that I provide details into how to start a class action. However, this is an extremely complicated legal procedure which requires the expertise of a lawyer. It is the brain surgery of law. So, before I launch into an explanation of the basics of starting a class action, I caution you that this is not something you can do on your own.

Class certification is the starting point. This requires meeting the burdens of Federal Rule of Civil Procedure 23:

(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:

(1) the class is so numerous that joinder of all members is impracticable;

(2) there are questions of law or fact common to the class;

(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and

(4) the representative parties will fairly and adequately protect the interests of the class.

(b) Types of Class Actions. A class action may be maintained if Rule 23(a) is satisfied and if:

(1) prosecuting separate actions by or against individual class members would create a risk of:

(A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; or

(B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests;

(2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; or

(3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include:

(A) the class members’ interests in individually controlling the prosecution or defense of separate actions;

(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and

(D) the likely difficulties in managing a class action.

If you can meet these requirements, then you can get a class certified in federal court in California.

Please remember to only rate my answer once you are 100% satisfied. If you feel the need to click either "Helped a little" or "I expected more," please stop and reply to me via the REPLY or CONTINUE CONVERSATION button with the issue you have. I will be happy to continue further and do everything I can to provide you with the service you seek.

Best regards,
Zachary D. Norris
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