2008 starts with two developments in the Florida-based federal class action lawsuit against virtual property dealer IGE. First, the court has granted (.pdf) plaintiff Hernandez’s motion (.pdf) to drop Hong Kong-based defendant Internet Gaming Entertainment Ltd. because plaintiff was not able to serve the complaint on that defendant in the allotted time (U.S.-based IGE U.S. LLC remains in the case). Second, in a virtual law first, the Florida Attorney General’s Office of Economic Crimes has opened an apparently related investigation regarding IGE’s business activity in Florida, and has subpoenaed extensive records regarding IGE’s sales of “virtual goods.”

For the full background of this case, see VB’s complete coverage. In brief, plaintiff is suing 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 World of Warcraft 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 EULA.

Hong Kong Defendant IGE Ltd. Dropped

Plaintiff Hernandez dropped his claims against Hong Kong-based defendant Internet Gaming Entertainment Ltd. because he was not able to serve process on IGE Ltd. within the 90 day extension period (.pdf) granted by the court last August 31. This is not terribly surprising; service via the Hague Convention frequently takes much longer than 90 days.

Florida Attorney General’s Office of Economic Crimes Opens Investigation

In regard to the investigation opened by the Florida Attorney General’s Office, the Newsome Law Firm (which is running the Hernandez case) reports that the Attorney General’s Office of Economic Crimes has issued an investigative subpoena (.pdf) to IGE U.S. for documents, “pursuant to the Florida Deceptive and Unfair Trade Practices Act in the course of an official investigation.”

The subpoena is the first formal document created as part of a U.S. governmental investigation that takes the existence of “virtual goods” as an accepted fact, even listing them in parallel with “goods” generally. Although it obviously has no formal value as “precedent,” it represents another instance of virtual property being recognized by a governmental body to which attorneys can refer in order to provide context.

The subpoena is extensive, seeking detailed information about IGE’s gold farming activity, business dealings in Florida, relationship with Affinity Media, and much more. Following are some key excerpts identifying categories of documents sought by the Office of Economic Crimes.

The Florida Attorney General’s Office of Economic Crimes seeks:

Documents showing IGE Ltd’s involvement in the development, manufacture, distribution, marketing and sales of the products, goods, virtual goods, virtual currency or services marketed and sold by IGE US or Affinity Media. [...]

Documents showing IGE’s financial relationships and contacts with U.S.-based commercial enterprises involving: the sales of IGE’s products or services, including but not limited to the sale of the World of Warcraft® gold to consumers in the State of Florida; VISA; Mastercard; PayPal; and and any commercial banks, lenders or other financial enterprises. [...]

For each present or former officer, director, employee or agent of your company involved at a managerial level in the distribution, marketing, promotion, pricing or sale of any of IGE’s products relating to the World of Warcraft®, all documents describing, evidencing, referring or relating to appointments and meetings conducted in the State of Florida. [...]

All documents that comprise, evidence, refer, or relate to any representations, whether written or oral, through print or other media, to Florida consumers of products sold by IGE relating to the World of Warcraft®. [...]

Documents sufficient to identify the following with respect to all World of Warcraft® accounts maintained by IGE and/or its agents or affiliates at any time: the IP addresses (Proxy/VPN services) that were used to create all such World of Warcraft® accounts; all World of Warcraft® accounts owned or used by IGE as part of its business operations; the IP addresses (Proxy/VPN services) that were used to log into the World of Warcraft® to distribute products sold by IGE; all World of Warcraft® accounts currently listed for sale on any website owned or controlled by IGE and/or its agents or affiliates; all World of Warcraft® accounts sold at any time on any website owned or controlled by IGE and/or its agents or affiliates; all World of Warcraft® accounts which have been power-leveled at any time through any website owned or controlled by IGE and/or its agents or affiliates.

Of note to people tracking IGE’s corporate structure, the subpoena seeks extensive documentation of IGE’s alleged ongoing relationship with Affinity Media, a relationship IGE has at times flatly denied.

Violation of the Florida Deceptive and Unfair Trade Practices Act is one of the counts Hernandez has alleged against IGE in his complaint. Besides forming the basis for a civil claim, alleged violations of the Act can also result in investigations like this one, which could ultimately result in separate proceedings brought by the Attorney General’s Office of Economic Crimes. Available remedies include injunctive relief (e.g. an order telling IGE to stop certain violative activities) and civil penalties of up to $10,000 per violation.

It seems likely that plaintiff and his lawyers brought the issue to the attention of the Attorney General’s Office, a fairly common practice when there is potential for a governmental investigation that would parallel a civil suit; the Office of Economic Crimes is authorized to open investigations on its own initiative as well. In any case, Hernandez will undoubtedly find a way to let the court in his civil case know that the Office of Economic Crimes has opened an investigation, particularly if IGE resurrects its recently-withdrawn motion to have the case stayed or dismissed in favor of arbitration or another venue.