There’s a lot of extra time to play video games. I think I have spent the past couple of days playing Super Smash Bros. . . in fact I am playing some right now. . .
Before quarantine I wasn’t familiar with Fornite, NBA 2k or any other video game. However, it might be the end of live sports games for a while so I figured I’d grab my own personal controller and see what things are all about.
At the intersection of law and this new found love entertainment comes an exciting case out of North Carolina.
U.S. District Judge Terrence W. Boyle of the Eastern Division of North Carolina held Michael Heidbreder must proceed his case by arbitration pursuant to the End User License Agreement (“EULA”) with Fornite developer, Epic Games.
Michael Heidbreder, a Missouri resident filed a punitive class action alleging Epic Games’ vulnerable security allowed hackers to charge fraudulent in-game purchases to his debit card between November 2018 and January 2019. Heidbreder brought both statutory and common law claims including negligence, breach of implied contract and violation of state consumer-protection and data-breach statutes.
In October, Epic Games moved to compel Heidbreder’s claims to arbitration, pursuant to the EULA. Features to the arbitration provision include: “ (1) an agreement to arbitrate on an individual basis only; (2) delegation clause granting the arbitrator the power to determine whether a specific dispute is governed by the arbitration clause; (3) a venue selection clause giving user the choice of venue between their home state or North Caroline; (4) Epic Games’ agreement to pay arbitration fees under $10,000, share costs after $10,00 and not seek attorney fee’s against users and (5) a 30 -day opt-out provision, giving users a 30 day window after agreeing to the End User License Agreement to opt out of arbitration provision.”
Heidbreder presented three compelling, yet unsuccessful arguments.
First, he asserts his minor son lacked contractual capacity to agree to the EULA. Judge Boyle rejected this argument noting “under the basic principles of principal-agent law” his son acted as Heidbreder’s agent giving him both actual and apparent authority to agree.
Second, Heidbreder argues privacy related matters are outside the scope of arbitration. According to common law, when the parties contract delegates the arbitrability question too an arbitrator, a court may not override the contract.” Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 529 (2019). Therefore, the arbitrator, rather than the court, determines the scope of these provisions.
Lastly, Heidbreder claims the class action waiver, arbitration clause and class action clause are unconscionable because Epic Games is applying the agreement retroactively. Judge Boyle acknowledges yet quibbles Heidbreder’s last argument noting the terms at issue “are common terms in modern contracts that have been recently sanctioned by the courts and can hardly be considered substantively unconscionable.”
This case appears to be successful for Epic Games. However, this “game” could face a turn for the worse if parents stop allowing their children to make in-game purchases using their credit card information. However, with extending stay-at-home orders and uncertainty about school returning in the fall, I highly doubt this would happen.
What’s your favorite video game during COVID-19?
Until next time,
Lauryn <3