''Bragg v. Linden Research, Inc.'', 487 F. Supp. 2d 593 (E.D. Pa. 2007), was a ruling at the

United States District Court for the Eastern District of Pennsylvania The United States District Court for the Eastern District of Pennsylvania (in case citations, E.D. Pa.) is one of the original 13 federal judiciary districts created by the Judiciary Act of 1789. It originally sat in Independence Hall in Phil ...

. The case resulted in an important early ruling on the enforceability of an online

End User License Agreement An end-user license agreement or EULA () is a legal contract between a software supplier and a customer or end-user, generally made available to the customer via a retailer acting as an intermediary. A EULA specifies in detail the rights and restr ...

(EULA) under American contract law, though it did not ultimately gain influence as a precedent. The ruling also clarified the matter of

personal jurisdiction Personal jurisdiction is a court's jurisdiction over the ''parties'', as determined by the facts in evidence, which bind the parties to a lawsuit, as opposed to subject-matter jurisdiction, which is jurisdiction over the ''law'' involved in the ...

for a dispute involving a user of a website that originates in a different region.''Bragg v. Linden Research, Inc.''
487 F. Supp. 2d 593
(E.D.Penn. 2007).

Background

Linden Lab Linden Research, Inc., doing business as Linden Lab, is an American technology company that is best known as the creator of ''Second Life''. The company's head office is in San Francisco, with additional offices in Boston, Seattle, Virginia a ...

(owned by the corporate entity Linden Research, Inc.), an online

virtual world A virtual world (also called a virtual space) is a computer-simulated environment which may be populated by many users who can create a personal avatar, and simultaneously and independently explore the virtual world, participate in its activities ...

service provider known for the popular ''

Second Life ''Second Life'' is an online multimedia platform that allows people to create an avatar for themselves and then interact with other users and user created content within a multi player online virtual world. Developed and owned by the San Fra ...

'', terminated the account of user Marc Bragg when it discovered that Bragg had found a way to acquire land in the virtual world at a lower-than-market price by manipulating in-game auctions.Tateru Nino,
Bragg vs Linden Lab - The Story So Far
', Second Life Insider (Jan. 27, 2007). This was deemed an act of hacking that violated the ''Second Life''

. Linden Lab conducted an investigation and then closed Bragg's account completely. In the process, Bragg's virtual assets within the game were dissolved; Bragg claimed that those assets were worth between US $4,000 and $6,000. Bragg filed suit, originally at the West Chester District Court in Pennsylvania in 2006.''Bragg v. Linden Research, Inc.'
Complaint
(Oct. 4, 2006).Law Offices of Marc S. Bragg,
Virtual Land Dispute Spills Over Into Real World
', PR Newswire (May 8, 2006). Linden Lab argued that the case should be removed to federal court due to the facts of the case,''Bragg v. Linden Research, Inc.'
Notice of Removal
(Nov. 7, 2006). and claimed that courts in Pennsylvania lacked

because Linden Lab was headquartered in California.''Bragg v. Linden Research, Inc.'
Rosedale's Motion to Dismiss for Lack of Jurisdiction
(Nov. 14, 2006). Linden Lab also claimed that the dispute should not be heard in court at all but should go to arbitration, due to the

arbitration clause An arbitration clause is a clause in a contract that requires the parties to resolve their disputes through an arbitration process. Although such a clause may or may not specify that arbitration occur within a specific jurisdiction, it always bind ...

found in the ''Second Life'' EULA.''Bragg v. Linden Research, Inc.'
Linden's Motion to Compel Arbitration
(Nov. 14, 2006). Bragg's efforts to resist the move to federal court were unsuccessful.''Bragg v. Linden Research, Inc.'
Bragg's Motion to Remand
(Nov. 20, 2006).

District court proceedings

In May 2007, Judge

Eduardo C. Robreno Eduardo C. Robreno (born 1945) is a former United States federal judge, United States district judge of the United States District Court for the Eastern District of Pennsylvania and the first Cuban-American to be appointed as a federal judge. Edu ...

of the

rejected Linden Lab's argument that his court and others in Pennsylvania lacked

in the dispute, because the company had engaged in nationwide marketing efforts to publicize ''Second Life'' and the virtual world was available to customers in Pennsylvania. This satisfied the

minimum contacts Minimum contacts is a term used in the United States law of civil procedure to determine when it is appropriate for a court in one state to assert personal jurisdiction over a defendant from another state. The United States Supreme Court has decide ...

that are necessary for personal jurisdiction. Having thus determined that his court had jurisdiction, Robreno then denied Linden Lab's attempt to force the dispute into arbitration, finding that the

EULA An end-user license agreement or EULA () is a legal contract between a software supplier and a customer or end-user, generally made available to the customer via a retailer acting as an intermediary. A EULA specifies in detail the rights and restr ...

containing this requirement had been constructed as a

contract of adhesion A standard form contract (sometimes referred to as a ''contract of adhesion,'' a ''leonine contract'', a ''take-it-or-leave-it contract'', or a '' boilerplate contract'') is a contract between two parties, where the terms and conditions of the co ...

for which users like Bragg were given no opportunity to negotiate.Benjamin Duranske,
Bragg v. Linden Update: Defendants' Motions to Dismiss and Compel Arbitration Denied
', Virtually Blind (Jun. 1, 2007). Bragg had argued that the

in the EULA was "both procedurally and substantively

unconscionable Unconscionability (sometimes known as unconscionable dealing/conduct in Australia) is a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining ...

and is itself evidence of defendants' scheme to deprive Plaintiff (and others) of both their money and their day in court." Robreno agreed, noting that the terms of service were presented by Linden Lab on a "take-it-or-leave-it-basis." However, he limited this holding by noting that a claim of unconscionability for a contract will only succeed if there are no "reasonably available market alternatives" available to the weaker party. This worked in Bragg's favor in the present case. Although there were numerous other online

virtual worlds A virtual world (also called a virtual space) is a computer-simulated environment which may be populated by many users who can create a personal avatar, and simultaneously and independently explore the virtual world, participate in its activities ...

available to Bragg at the time, Judge Robreno noted that ''Second Life'' was unique in that it allowed participants to retain property rights in virtual land. Thus, the ''Second Life'' EULA was found to be unenforceable under

contract law A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...

due to its unconscionable provisions.

Impact and subsequent developments

Bragg and Linden Lab later reached an

out of court settlement In law, a settlement is a resolution between disputing parties about a legal case, reached either before or after court action begins. A collective settlement is a settlement of multiple similar legal cases. The term also has other meanings in t ...

in which Bragg's full "privileges and responsibilities to the ''Second Life'' community" were restored. At the time of the district court ruling, some commentators believed that it could become an important precedent on arbitration clauses and other

provisions that are forced upon Internet users by the operators of online games and platforms. However, the ruling turned out to be an outlier because later court disputes over objectionable EULAs were almost uniformly ruled in favor of Internet firms as long as users had a chance to read the terms of service with an obvious opportunity to accept or reject the terms before continuing to use the site or software. On the other hand, this ruling is often cited in later cases involving specific disputes within

platforms in which property can be bought and sold.

References

{{Second Life 2007 in United States case law United States arbitration case law United States personal jurisdiction case law Second Life