August 20th, 2007 by Benjamin Duranske
In the Bragg v. Linden Lab case (see VB’s previous coverage for background) defendants recently served interrogatories and document requests on plaintiff Marc Bragg. The interrogatories are available here, and the document requests are here (both of these documents are .pdf files). Linden Lab also recently filed amended counterclaims (available here (.pdf)) that shed more light on the mechanism Bragg allegedly used to buy land, and further explicate Linden Lab’s allegations of a fraudulent conspiracy between Bragg and other users.
Just as with Bragg’s last substantive filing against Linden Lab, I must point out that litigation documents put the side the drafted them (this time, Linden Lab) in the best possible light, and the other side in the worst. Litigation documents are, by their very nature, completely one-sided. So, as before, I must caution readers to avoid rushing to judgment based only on pleadings.
Incidentally, for non-litigators, “interrogatories” are questions that the recipient must (generally) answer, and “document requests” are formal requests for copies of electronic and paper documents that the recipient must (generally) comply with.
Highlights from these documents and limited commentary below.
Linden Lab’s Interrogatories and Document Requests to Bragg
As an initial matter, it is interesting that these are available to us at all. Few courts require that interrogatories or document requests be filed with the Court unless a dispute arises involving compliance, so they are not usually available to the public. Bragg has made Linden Lab’s requests available on his website, however. I hope that his responses, as well as any interrogatories sent by Bragg to Linden Lab, will also be posted.
Linden Lab asks Bragg to respond to eighteen seperate interrogatories. Most are fairly typical interrogatories that seek information that will give Linden Lab a clearer picture of Bragg’s case before motions for summary judgment and trial. One note that may provide a clue as to Linden Lab’s core strategy here: a high percentage of the requests are directed to the specific nuts-and-bolts basis for Bragg’s claim that Linden Lab fraudulently offered “ownership” of virtual land.
Here are a few of the more interesting interrogatories. Note that the words in all capital letters below have been specifically defined by Linden Lab in these interrogatories — in other words, Linden Lab isn’t doing it for emphasis, it’s a lawyer thing.
IDENTIFY with particularity all alleged misrepresentations by Defendants on which YOU personally and actually relied, and as a result of which YOU were damaged, as alleged in the COMPLAINT, stating the time, place, manner, and maker of each alleged misrepresentation.
For each alleged misrepresentation identified in YOUR response to the preceding interrogatory, state with particularity all facts supporting YOUR contention that the alleged misrepresentation was false or misleading at the time it was made.
For each alleged misrepresentation identified in YOUR response to Interrogatory No.1, state with particularity the circumstances of YOUR alleged reliance thereon, including without limitation when YOU became aware of the representation and what you did in reliance thereon.
For each alleged misrepresentation identified in YOUR response to Interrogatory No.1, state with particularity the circumstances under which YOU discovered that the alleged misrepresentation was false or misleading.
For each of the items of “virtual property” YOU acquired over the course of YOUR participation in Second Life as alleged in the COMPLAINT, state the purchase price YOU paid for each such item and the amount YOU realized upon the sale of each such item and, if appropriate) each separately-sold portion thereof.
Linden Lab also asks Bragg to provide documents responsive to twenty-five document requests. These, also, are fairly typical as document requests to, mainly seeking financial records regarding Bragg’s economic activity in Second Life, communications about Bragg’s allegations, and any documents Bragg is likely to rely on at trial. Here are a few examples:
Any accounting records, ledgers, spreadsheets) or other DOCUMENTS that refer to, reflect, mention, or discuss YOUR economic transactions in connection with Second Life.
For each item of YOUR ‘virtual property” YOU allege in Count 6 of the COMPLAINT was wrongfully converted by Defendants, DOCUMENTS supporting YOUR calculation of its value at the time of the alleged conversion, and the basis for YOUR valuation.
All DOCUMENTS that refer to, reflect, mention, discuss, or constitute COMMUNICATIONS between YOU and any third party regarding any complaints YOU made about Defendants or the Second Life service.
Linden Lab’s Amended Counterclaims
Linden Lab has also filed an amended set of counterclaims (the original is available here). Aside from cleaning up some typos and changing a few words here and there (e.g. “…to ensure that Bragg was appropriately punished and forever barred from Second Life,” becomes, “to ensure that Bragg was appropriately deterred and forever barred from Second Life,”) the big changes involve how the counterclaims address the way that Bragg bought land. Notably, this document appears to have been filed partially due to the positions taken in Bragg’s motion to dismiss the counterclaims.
On this one, there’s a lot of detail and more text than I want to burden readers with, so I urge interested readers to work through the original document (.pdf), paying particular attention to paragraphs 50 and above in the “Counterclaims” section, to get all the new information. That said, the paragraphs below nicely summarize the majority of the new material.
26. The requirements, procedures, policies, and regulations of Second Life included the information regarding the auction process for purchasing “virtual land” as set forth on the Auction FAQ page and the main auction or “Auction House” page on the Second Life website.
27. The Auction FAQ page explained that “The auctions are located at the Second Life Auction House” and provided a hyperlink to the main auction page on the Second Life website. The Auction FAQ page also explained that users can search for land they may wish to purchase within Second Life using the Second Life map, and that this map “includes land that is planned for auction as well as those parcels currently on the block.” Thus, using this map feature, users could preview the “virtual land” before they bid, and even before the auctions began.
28. The main auction page stated “Welcome to the Second Life auction block. The listings below let you know what land is currently on offer, and new auctions are added frequently.” The page also listed all the parcels that Linden had made available for bidding. Each of the parcels listed on the main auction page had a hyperlink to an “Auction Details” page where a user could make a bid. The Auction Details page would display any other bids that had been made for the parcel.
29. The only way Linden authorized users to bid on parcels of “virtual land” it had offered for sale by auction was by entering a bid on the Auction Details page for a parcel listed on the main auction page.
30. As such, any means of obtaining parcels of “virtual land” to be offered by Linden by auction other than by entering a bid on the Auction Details page for a parcel listed on the main auction page was a violation of section 5.2 of the Terms of Service and contrary to the Auction FAQs, and therefore not authorized by Linden.
Linden Lab also provides more details from chat logs between Bragg and a user it identifies as “User M.S.” (another person involved is referred to below as “User M.S.2″) regarding Linden Lab’s claim that Bragg was involved in a fraudulent conspiracy to buy virtal land using unauthorized means.
52. User M.S. then instructed Bragg and User D.S. that there were “2 rules” to the scheme, namely, “do NOT ge[t] greedy” and “keep prices low so everyone can have a piece” and Bragg agreed, saying “so we don’t bid against you” and “we’ll keep land prices low.” Bragg and User M.S. both acknowledged the need to keep their unauthorized activity quiet, so that Linden would not shut down the exploit and terminate their accounts. Bragg and User M.S. further discussed the possibility of Bragg’s acquiring some of the parcels that User M.S. and User M.S.2 had already acquired using the scheme.
53. In their online chat on April 29, 2006, User M.S. also discussed how the parcels acquired in the scheme would be liquidated. Bragg asked User M.S. “how much do you and [User M.S.2] want for” the “sim,” and User M.S. stated “we’re asking a few of the [other Second Life users] for just under $900 us… they still think they go 4 $1000US.”
54. On information and belief, based on the statements he made during the abovereferenced communications with User M.S. and User D.S. on April 29, 2006, Bragg knew that
the scheme User M.S. had introduced to him would harm Linden, by enabling the participants to acquire “sims” for far below U.S. $1,000.00, which Bragg knew was the minimum opening bid
for auctions. On information and belief, based on the statements he made during the abovereferenced communications with User M.S. on April 29, 2006, Bragg agreed with User M.S. that
the above-alleged wrongful acts be committed, and Bragg further gave his cooperation and assistance to the scheme by, among other things:
(a) Offering to purchase parcels User M.S. and User M.S.2 acquired in the scheme,
(b) Agreeing not to bid against User M.S. and User M.S.2,
(c) Entering a bid as instructed by User M.S. for the Mul “sim,”
(d) Agreeing not to tell others about the scheme,
(e) Agreeing not to “get greedy” (in order to minimize the chance that Linden would shut down the scheme and take disciplinary action), and
(f) Agreeing to keep prices low so that all of the conspirators could profit.
55. Accordingly, on this basis, on April 29, 2006 Bragg joined an existing conspiracy between User M.S. and User M.S.2 to obtain something of value from Linden by fraud.
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