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World of Warcraft player Antonio Hernandez filed a motion claiming he has settled his dispute with virtual property dealer Internet Gaming Entertainment and asking the court for permission to file the settlement “under seal” (.pdf), but Judge James I. Cohn of the United States District Court for the Southern District of Florida refused to allow the filing under seal (.pdf) unless the parties can demonstrate that there are “extraordinary circumstances.”  The judge left open the possibility that the settlement can be filed under seal, but has made it clear that he will not do so without good reason.  The public cannot access documents that are filed under seal.

Hernandez, readers will recall, was supposed to be the lead plaintiff in a class action lawsuit representing a class of millions of World of Warcraft players against IGE.  A motion for class certification was filed earlier this year, but the court had not yet ruled on that motion when the parties apparently reached an agreement to settle the case.  As I pointed out last month, settlement before class certification is decided raises questions, particularly if the value of the settlement exceeds the reasonable value of a named plaintiff’s individual claimed damages — here, a diminished World of Warcraft experience.

For the full background of this case, see VB’s complete coverage of Hernandez v. IGE. In brief, plaintiff sued IGE on behalf of essentially all World of Warcraft players on the grounds that IGE, by farming gold, spamming chat, camping spawns, and generally diminishing the game experience, allegedly prevented players from receiving the full benefits Blizzard intended them to receive as third party beneficiaries of Blizzard’s Terms of Use and End User License Agreement.

The court, in refusing to accept the filing under seal unless the parties can demonstrate “extraordinary circumstances,” commented as follows:

Plaintiff seeks permission to file a motion to enforce a settlement under seal, because “certain terms of the settlement are to remain confidential.” The motion is unopposed by Defendant. However, the Court has an obligation to consider the public interest before allowing an entire motion or settlement agreement to be sealed. “It is clear that the courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents.” Nixon v. Warner Communications, Inc., 435 U.S. 589, 597 (1978).  [...] [I]f a settlement agreement is filed with the court for approval or interpretation, then the parties must demonstrate extraordinary circumstances in order to deny the public access to the agreement. Brown v. Advantage Eng’g Inc., 960 F.2d 1013, 1016 (11th Cir. 1992).

The order leaves open the possibility that the parties could demonstrate “extraordinary circumstances” that would justify filing under seal, but the language of the order seems to limit that possibility, noting that “secrecy has been deemed compelling” in situations seemingly dissimilar to this case, such as “cases involving trade secrets, the privacy of children, the identify of informants, or when the information could be used for scandalous or libelous purposes.”  The court also noted that there is a “presumption of openness” that is “stronger for documents that directly affect an adjudication.”


I am very happy to see the court take this position, and I hope that the court subjects the parties’ likely forthcoming motion arguing that the settlement needs to remain secret to this high level of scrutiny.  I say this both as a writer and a lawyer; public access to court records is a cornerstone of the judicial system.  As the court noted, there are good reasons to seal some documents, but the parties here have not made any argument, let alone a compelling one, why the terms of their settlement ought not be made public.  Were this simply a case of a single plaintiff and defendant, no one would care, but it isn’t.  This case is styled as a class action, and the interest of a potential class of millions are at stake.  That is why the judge is being asked to approve this settlement in the first place, and why he was right to decline to seal it.

Notably, the parties’ proposed settlement agreement was not attached to Hernandez’s filing.  The filing appears to have been designed to test the waters on this issue without giving the court the opportunity to immediately make the settlement agreement public.

VB will be watching the next steps closely, and I suspect that public interest groups and larger media outlets (the traditional intervenors in this situation) may now start paying attention as well.

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2 Responses to “Hernandez v. IGE Settlement Watch – Parties Claim to Settle, Florida Court Declines to Seal Settlement Absent “Extraordinary Circumstances””

  1. on 08 Aug 2008 at 7:53 amMichael Donnelly

    Interesting stuff, Ben. I’m glad the judge is not going for it as well. Hammering out a settlement as an individual who’s going for class action doesn’t seem like it has many good outcomes, unless the settlement includes huge changes by IGE – otherwise, how can the “class” accept anything?

  2. on 08 Aug 2008 at 11:24 amPaks

    I’m no lawyer just a nerd with very firm stances on what I feel is right and wrong. This settlement and subsequent asking for the documents to be sealed bothers (even angers) me for a few reasons:

    1) As was mentioned above by Mr. Donnelly, they were going for a class action. Why now must everything be secret from the people they said they were trying to represent? Afraid of flak from friends and the WoW community, perhaps?

    2) When the Newsome firm had their website up, I think the name was MMO Citizen, they asked for the community to help out in gathering info about IGE. I know myself and a couple other friends sent in info about IGE we’d gathered by digging around the net. I don’t know if anyone else did, but we did this thinking the suit and the process was a community effort. Granted I probably would have shared any dirt I could find on IGE anyway, but my point is they portrayed this as a suit for the community and asked for community help, which was given. I guess it kinda makes sense that their website was taken down. Even so I still sent in info disputing the claim that IGE was no longer in the RMT business.

    3) While I understand Mr. Hernandez needs to do what’s best for him, the manner in which this all happened just stinks to hell for me. It makes me think he was in this for the money from the start as were his lawyers. Is that surprising? No, simply disappointing. If that’s what they were after just structure your actions accordingly from the start and I’d see no problem.

    Throughout this entire process it was made clear from the info that was revealed to the public that IGE and namely Mr Pierce uses money to solve all his underhanded and downright dirty issues and here they were able to do it again.

    As I understand it, the state of Florida is still investigating them so perhaps that process will bring about a bit of satisfaction for the gaming community.

    Outside of that, I hope Newsome took IGE and Pierce for as much as they could get. I wonder if now we’ll see even more individuals and companies filing suit over RMT issues? I for one hope so.

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