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Debonneville v. Pierce CaptionAccording to minutes (.pdf) obtained from the court, a recent settlement conference in Debonneville v. Pierce — a lawsuit between two founders of virtual property company Internet Gaming Entertainment (IGE) — has resulted in a tentative settlement agreement.

At the settlement conference where the tentative agreement was reached, the Honorable Margaret A. Nagle ordered the parties to finalize the agreement and file a stipulation of dismissal by April 14. Although nothing has yet been filed, both parties have signed a Memorandum of Settlement, indicating that they are in agreement on all key terms. The details of the agreement are confidential and neither Pierce’s nor Debonneville’s attorneys responded to requests for comment.

The case, which was filed in the United States District Court for the Central District of California, caught the attention of the gaming press both because IGE is widely reviled by players and designers, and because Pierce and Debonneville accused each other of lengthy dirty-laundry lists of business, ethical, and personal failings.

For example, Debonneville’s Amended Complaint (.pdf) claims that Pierce failed to pay Spanish taxes, used corporate funds for personal expenses, falsely told Debonneville another IGE executive was blackmailing Pierce, and partnered with a third party, Jonathan Yantis, to exploit bugs in game software to make unauthorized duplicates of in-game items and currency to offer for sale via IGE. For his part, Pierce’s Counterclaims (.pdf) accuse Debonneville of overpaying certain clients for virtual goods with IGE’s money ā€” including one of the lawyers who now represents Debonneville on this case ā€” in order to secure favor and personal benefits. For the whole tawdry story, see VB’s earlier coverage.


It is not particularly surprising that the case appears to be ending in settlement. As VB noted last month, business disputes like this frequently settle at this stage — particularly when valuation is straightforward and both parties want to avoid negative publicity.

What does this mean? Probably that Pierce (or more realistically, IGE’s insurance company) is going to be writing a big check to Debonneville. It will be considerably less than the $40 million that the complaint implies he ought to get, but it won’t be nothing either. With motion practice leading up to trial, the cost of defense in a case like this could easily push into the millions, and that’s a lot of motivation to settle.

From a virtual law perspective, I’d been hoping against hope that these two charming gentlemen would continue knocking their heads together for another couple of months, and that the judge would accidentally say something meaningful about virtual property while trying to sort out their nonsense, but that doesn’t appear likely now.

You never know though; if the parties are unable to finalize their agreement (unlikely, but always a possibility when there’s as much bad blood as there appears to be here) a jury trial is still scheduled for May 20 in Los Angeles.

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5 Responses to “Settlement Imminent in Suit Alleging Underhanded Dealing at Virtual Property Dealer IGE”

  1. on 09 Apr 2008 at 1:46 pmAll’s Well That Ends « Broken Toys

    [...] Well That Ends Debonneville v. Pierce to, unsurprisingly, settle out of court. Not much to add beyond Duranske’s note: From a virtual law perspective, Iā€™d been hoping [...]

  2. on 09 Apr 2008 at 3:09 pmJulynn Lilliehook

    When I think of all the money attorneys earn in not defining virtual law with these settlements it makes me angry. If I could get my hands on one of these cases, I’d ride it out and get it before a jury or at least past summary judgment.

    Hint, hint…..

  3. on 09 Apr 2008 at 3:55 pmlarryr

    so after all the “new shiny” of virtual law, it continues to be good old law buisness- settle if you can- that continues to prevail….

    and i still dont see any property issues that require new “virtual laws” just better fairer applications of justice on laws that arent created by suspect special interest means….

    im still unconvinced that the thoughts behind the current moniker of “virtual laws” are just as suspect as special interest laws made during the “non virtual”? lol past.

    soon the need to say “all owned objects/expressions” are equal will resound in a country that will find it’s only exportable valueble in the world is digital pictures/models of Britney’s crotch, or our commentary about them.

    “virtual ” liberty?– no REAL liberty at last! welcome the singularity!…


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  5. on 13 Apr 2008 at 2:16 pmDoubledown Tandino

    All I really have to say about this is WOW

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