Lawsuit Against IGE Founder Brock Pierce Alleges Underhanded Dealing at Virtual Property Company
January 30th, 2008 by Benjamin Duranske
Editor’s Note: At the request of Brock Pierce’s attorneys, this article has been edited to remove three passages summarizing portions of the now-sealed complaint. Although the complaint was filed June 11 and publicly available for more than three months before Pierce’s attorneys had it sealed, it was eventually sealed, and they have provided an order signed by the judge that establishes this.
Notably, a judicial order sealing a document is directed to the Clerk of the Court, and it merely prohibits further distribution — it has no direct impact at all on non-lawyer journalists, and it certainly does not stand as an order censoring news coverage if a reporter does manage to learn the contents of the document. That said, as an attorney, I am subject to professional standards that go beyond the responsibilities of non-attorney reporters, and I must respect those responsibilities.
I am working hard to bring readers coverage of the amended complaint and answer in the near future. That, frankly, will be a more interesting story anyway. The original article (with the three aforementioned edits and additional discussion of the sealing order) follows.
The Complaint in a lawsuit filed last summer in California against Brock Pierce, founder of virtual property company Internet Gaming Entertainment (IGE), recently surfaced on a new website managed by the consumer justice law firm behind the tangentially related Hernandez v. IGE class action lawsuit. The plaintiff in the California lawsuit against Pierce is Alan Debonneville, a Swiss citizen living in Hong Kong. Debonneville is identified in the Complaint as one of the co-founders of US IGE.
[DESCRIPTION OF THE COMPLAINT REMOVED AT THE REQUEST OF ATTORNEYS FOR BROCK PIERCE.]
The Complaint was first posted at a new site, MMO Citizen, which is managed by the Newsome Law Firm of Orlando Florida.
From the post at MMO Citizen:
Regardless of the merits of Debonneville’s claims, the complaint is an insider’s perspective of one of the largest, or at least best-known, RMT companies. For those who study virtual worlds and their economics – both virtual and real world – Debonneville’s complaint provides a detailed first-hand account from an insider’s perspective that reads like a novel.
[DESCRIPTION OF THE COMPLAINT REMOVED AT THE REQUEST OF ATTORNEYS FOR BROCK PIERCE.]
[The complaint was filed June 11, 2007, and was sealed over three months later, on September 17, 2007. Until that time it had been publicly available. It was sealed with one sentence near the end of a "proposed order" granting a motion to strike certain portions of the complaint. The order was apparently written by attorneys for Brock Pierce and presented to the judge, who scratched out the word "proposed" and signed the order without other modification. Although "proposed orders" are common in many situations, one does not typically request that documents be sealed by appending the request to another order in the Central District of California. This is at least partly because appending a request to seal to another order does not create a docket entry of an "Order to Seal" that the Clerk, journalists, and other interested parties can easily reference.]
Richard Newsome told VB that his understanding is that the document is public. “We got it from somebody who got it from the Clerk’s office,” said Newsome.
[DESCRIPTION OF THE COMPLAINT REMOVED AT THE REQUEST OF ATTORNEYS FOR BROCK PIERCE.]
It is clear from the docket that Pierce has answered the Complaint and filed counterclaims of his own, but these documents have not yet been made public. The lawsuit has progressed into the discovery phase, and the parties recently asked the court for an extension of time to complete discovery or settle. The case is scheduled to go to trial May 20, 2008.
Broken Toys (one of my favorite sites) got the story about the same time VB did, and has additional coverage of Debonneville v. Pierce, including some great excerpts from the complaint focusing on the alleged business shenanigans [but has removed its story at the request of Brock Pierce's attorneys, replacing it with a picture of a cute kitten.]
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28 Responses to “Lawsuit Against IGE Founder Brock Pierce Alleges Underhanded Dealing at Virtual Property Company”
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[...] I’m sure that as this hits the commentariat there will be more to be said. Oh, there will be more. [...]
This made my day. IGE is certainly not the only gold-retailing company, and they’ve plagued every virtual community I’ve tried. Their pollution of virtual worlds goes beyond enabling cheaters, destroying virtual economies, and breaking suspension of disbelief with their army of farm-bots with names like “EJUJRDJSK”. These companies have bot programs to hijack in-game broadcast message systems, spamming their advertisements over, and over, and over.
In the game I play, one of the few players who had managed to maintain a clean reputation and win widespread admiration for his solo feats of prowess, has now gone over to the dark side. This week he joined a guild of botters, just so he would have access to the best equipment and cutting edge maps of the game. He’s not even worried about being known as a Botter Groupie who has to lick up whatever crumbs he’s thrown (unless he starts botting himself). No one cares anymore because the reality is you get on the bot bandwagon or you’re the loser. Botters suffer nothing in terms of reputation, and get everything in terms of content (and a steady supply of ego-pumpers).
I guess it’s time for me to find a new MMORPG to try. The whole situation just annoys me because the exact same thing happened in the previous game I played, and whenever I give up it means losing my investment in effort and cash-bought virtual items.
I really hope raising awareness of these bottom-feeders that prey on weak egos and the desperate underclass of virtual communities are finally exposed as real world malefactors whose activities harm real people.
bet goldman sachs feels pretty stupid. they invested tens of millions of dollars in ige
Yesterday my game, Singapore Granado Espada once more crossed the fair gamesmanship and good taste line. They offered an event where players could bring in highly upgraded weapons (mostly botters or people who buy tons of booster and break-protection premium items) to be combined with more expensive premium item to get a “top level” 100 weapon.
I saw this coming a mile away, but I still can’t believe GE moved so fast to implement the ponzi scheme. The next event will require these level 100 weapons, perhaps upgraded (since this involves using a lot of premium items, for an even more powerful weapon. (Rendering the one people got from this event worthless).
The real money costs of these weapons will be hidden by dozens of indirect previous costs.
So, finally giving up, I decided to give another Asian MMORPG a test run last night. I chose the Malaysian version of Perfect World, since the game language is in English and its open to International Players.
One of the first things I noticed was Perfect World’s “Rewards” plan. Perfect World has implemented a multi-level marketing scheme where players are given game gold (which we all know has real world resale value) for recruiting new players, based on how much the new player “tops up” (pays real money for premium stufff).
The Rewards FAQ even uses the word “downline” repeatedly to describe all the newly recruited players!!!!!! This isn’t even disguised multi-level marketing (Tantra Philippines had this, where they rewarded players with levels instead of gold) – this is a blatant, explicit in-your-face multi-level marketing scam disguised as an MMORPG!!!!!
When I ran the Chinese-language intro page of another MMORPG I was interested in through Google Translate, I saw a reference to China having some “Internet Obsession” laws. Normally I’d be the first to cry “fascism!”, but it seems to me there’s an extreme predatory streak in Asian MMORPGs and very little consumer protection. As techniques for engineering obsession become more sophisticated, I can see how people can panic and demand protection without regard to future implications for future civil liberties.
Interestingly, the post where the Complaint first appeared, along with an earlier post seeking information about the lawsuit against Pierce, is now gone from MMO Citizen. I’m leaving the links live for now. I don’t have any information on why, but the rest of the site appears normally. Very curious. Could be a server reset, could just be that they want to keep that focused on the Hernandez suit and will post it elsewhere, or it could be something else — one suspects that neither Pierce’s nor Debonneville’s attorneys are exactly thrilled that the Complaint is out there. I’ll let you know if I figure it out, but in the meantime, the docs are available here.
Benjamin: Their entire domain was offline yesterday, reset to root. I don’t know, either, but I’m following this turn of events with interest.
Wonder if they got slapped with a C&D. Alternately, if they did, I wonder why they aren’t fighting it, considering they’re lawyers.
Thank you for housing the documents elsewhere, though. Hopefully it was just a server hiccup and Newsome will restore the post/documents.
I understand they’re in the process of migrating the domain name too, so it could well just be a hiccup. Will be interesting to see if they post them again.
Update – I contacted Newsome, who declined to comment.
[...] Curioser and Curioser The articles on mmocitizen.com and the complaint regarding IGE and Brock Pierce refererred to in an earlier post have all been removed from that site. They’re still mirrored on virtuallyblind.com. [...]
What will you do if faced with your own C&D for the mirrored materials?
The courts have a mixed record in regard to whether they see something posted on the web as public and freely repeatable. If they see it as “meant to be private”, a judge might just enforce a C&D against something already made public. (Unless the ACLU or the EFF get involved – they might in this case, but they hesitate if they think the media/public might turn against them for helping keep dangerous info/data in the wild).
What will you do if faced with your own C&D for the mirrored materials?
Unless there’s more behind the demand than I suspect there would be, I’d ignore it, and probably upload the letter too. A cease and desist letter doesn’t mean much unless it sets forth a good argument as to why you should cease and desist whatever you’re doing, and at least at this point, I don’t see such an argument regarding these documents.
I’m a member of the California bar, and that means I am an officer of the court. I follow the rules, so if there’s a good reason to take these down (for instance, if the Complaint was actually sealed when filed and was released by mistake) I’ll certainly do so, but at this point, I don’t see any reason to believe the Complaint is not a public document, and that means it stays up, unless someone can demonstrate otherwise. I also plan to keep the draft purchase agreement available on the site, as it is newsworthy and bears no confidentiality designation.
There are procedures for maintaining confidentiality of filings and discovery documents (filings can be “sealed” and discovery documents can be marked and treated as confidential by agreement) but there is no evidence that any of that has happened here, and since I feel these are newsworthy documents, I plan to keep them all available.
Ps. I made a comment under your China post that seems to have been slam filtered. There are links in it, but the links are to news articles (CNET and Canada.com). I don’t care if the comment gets posted, but I wanted to draw your attention because I think you’d be interested in the links.
*SPAM filtered.
lolcat >.<
@12 & 13 – I’ll find it and get it added.
[...] again RMT (Real Money Trading) is in the news. First the various lawsuits against IGE – one from a former director and one class action suit which are putting the squeeze on the world’s biggest RMT operator. [...]
[...] I’m sure that as this hits the commentariat there will be more to be said. Oh, there will be more. [...]
Earlier this week I removed links to the complaint at the request of the original poster.
Yesterday, attorneys for Brock Pierce asked me to remove this article as well because the complaint that it discusses it has been sealed.
While I intend to comply with any ethical obligations I have regarding this issue, Pierce’s attorneys have not, so far, pointed to any caselaw, ethical guideline, or statute requiring that I do this. At some point, the complaint was not sealed, and it is not at all clear to me that I have any obligation to remove discussion of it based on the letter I received.
There is also a significant question as to whether the document was appropriately sealed in the first place, as the standard for sealing complaints in the Central District of California is quite high, and appropriate procedures do not appear to have been followed.
In any case, I have invited Pierce’s attorneys to submit caselaw, an ethics decision or guideline, or statutory authority requiring the action they have requested. In the absence of them providing further information, however, I will not have a chance to evaluate their request until early next week, so the article will remain here for the time being.
[...] I’m sure that as this hits the commentariat there will be more to be said. Oh, there will be more. [...]
I hope you keep us posted on the status of your post with reference to the timeline of the sealed documents. I can’t remember the case, but there is a precedent where a letter wasn’t under seal for a very short time, and it was ruled “public” because of that (i.e., the opposing lawyer could make use of it).
However, in California, judges are developing really weird notions about what’s public and what isn’t. I had a discussion with a real superior court judge who claimed to me that information that “should have been private” (for instance private information accidentally posted on the Internet by a corporation) should be considered private: i.e., even though that info is out in public, possibly for years, anyone who links to, copies (or verbally repeats?) such information has committed some violation of privacy. I have wished ever since that I had the voice and means to vigorously contest the notion that a person can be punished for transmitting public info that “should have been” ( in God knows whose mind) private. It makes me furious that judges with very real power are even thinking in the direction. Can you imagine a jury being given discretion to go that way?
Just wondering if any of the recent actions of Pierce’s lawyer towards Broken Toys have changed your view of what is sealed and not sealed?
Has the C&D issued to Broken Toys changed anything?
I received a letter from Brock Pierce’s lawyers a few days ago with a copy of an order that seals the original complaint. As noted above, I was out of town over the weekend, and am just now getting to this.
The order that Pierce’s lawyers sent me shows that the complaint was sealed, but that it was only sealed after it had been publicly available for more than three months. In other words, had I received a copy of this complaint last summer and ran this article then, I be pretty comfortable leaving the coverage here as it was. However, I don’t have any way of knowing if the copy I received was released by the Clerk’s office in error after September 17, or released appropriately before that. Because, as a lawyer, I am an officer of the court, I have erred on the side of caution and removed three passages describing the contents of the complaint from this article.
There’s something really important for people to realize here though. An order sealing a document has no real impact on non-attorneys once the document is out there. If I wasn’t a lawyer, and I was hosting this on my website, I would feel comfortable that I was entirely within my rights to leave it up. However, I am a lawyer, and like I said in a comment above, I play by the rules.
In addition, whatever you may think of Brock Pierce and IGE, it is undeniable that some of the allegations contained in the original complaint had precious little to do with the lawsuit (which was at least partly why the judge struck them and sealed the complaint). If the rumors had stayed in the case, I’d have covered them, but I don’t have any desire at all to spread malicious rumors about somebody — particularly when a court has found the rumors irrelevant to the lawsuit I am covering at VB.
I’m now working to get copies of the rest of the documents in this case (none of which have been sealed) and I will run excerpts as soon as I do.
Just as a matter of interest, what hoops would a US lawyer have to jump through to enforce a take-down notice on a web site outside of the USA? Say, one hosted on a UK university campus?
Richard
@ Richard – I’m not sure offhand, but typically any step that involves a foreign court system dramatically increases the expense and hassle of bringing the action and stands as a fairly serious disincentive in a lot of situations.
My guess is that they would try to pressure the university to remove it, but again, an order sealing a document merely directs the clerk not to release any more copies of the document. It has absolutely no censoring effect on previously released copies, and absolutely does not stand as an order not to talk about the document that would impact a private citizen in the U.S., let alone a resident of another country. I’m just being particularly careful here because I am an attorney and at least arguably have a professional obligation to respect the spirit of this order (even if I do not think it should have issued) particularly because I cannot determine when the copy of the complaint I had downloaded from MMOCitizen was originally received from the clerk’s office.
[...] now I see some lawyering bully shit (that last link is to the firm that Pierce hired…) is being pulled. The Forge has a lot [...]
Hmm. So if a UK academic were so anal about virtual world research that (let’s say it’s a) he regularly, as a matter of course, downloaded important .pdfs from the Internet for research purposes, and then, in response to the surprise disappearance of one of said publicly-available .pdfs, were to replace it online at (let’s say) http://privatewww.essex.ac.uk/~rabartle/debonnevillecomplaint.pdf, then it would be very difficult for a US lawyer to get it removed? Especially if the university had its own law department specialising in international law that would happily ensure that any takedown notice would be laughed out of court?
I guess there’s only one way to find out…
Richard
Benjamin Duranske:
As an officer of the court, don’t you have an ethical obligation not only to obey the court’s order but also not to encourage or counsel others to violate the order?
If the content of that complaint is in fact defamatory, could people face tort liability for spreading it around? (I was wondering about that since the First Amendment does not necessarily protect defamatory speech, and jurisdiction for tort liability could extend across the pond.)
If someone like myself were to read your interpretation of the relevant law and then acted on it (for example by posting the offending material) BUT, hypothetically of course, it turned out that you were wrong on the law and that I could, in fact, face some sort of legal penalty/liability for my actions — I could not sue you for legal malpractice since you are not my attorney, right? Thus, I would be left to defend myself and pay any adverse judgment out of my own pocket.
Lastly, how come your perceived ethical obligation to remove the link to the complaint does not include removing Mr. Bartle’s post, which links to the offending material?
@26 – I’d normally respond to Candy’s questions offline (I try not to let the comments end up being about me) but in this case, it gives me a chance to talk a little bit about attorney professional responsibility, and I’m happy to do that.
First, it’s important to realize that I do not represent anyone involved in this, including Professor Bartle. I’m most definitely not qualified to give legal advice regarding how a U.K. court would address this. For that reason, among others (one of which is that I get paid to give advice when I am practicing) I’m very specifically not giving legal advice, but rather offering somewhat off-the-cuff analysis of a situation for a colleague who tracks virtual worlds.
On to Candy’s questions…
As an officer of the court, don’t you have an ethical obligation not only to obey the court’s order but also not to encourage or counsel others to violate the order?
The answer to that specific query is arguably yes — but I haven’t done that and don’t intend to. In spite of the implication in the letter from Mr. Pierce’s lawyers, the only person who could actually “violate the order” in this case is the Clerk of the Court for the Central District of California by distributing the document now, after it has been sealed. The order most definitely does not stand as a directive generally censoring or prohibiting coverage of these issues.
An order sealing a document may (with a lot of stress on “may”) imply an ethical obligation on an attorney not to host a version of that document (which could well have been acquired before it was sealed) on a private blog. Out of an abundance of caution, I have decided not to host it myself, but it seems far too great a stretch to say that this judicial action curtails my First Amendment right to discuss the fact that it was at one point available, and to discuss the possible ramifications of someone else hosting it now.
If the content of that complaint is in fact defamatory, could people face tort liability for spreading it around? (I was wondering about that since the First Amendment does not necessarily protect defamatory speech, and jurisdiction for tort liability could extend across the pond.)
I’m not an expert on defamation, and I’m digging back a few years here, but it strikes me that there are a number of defenses that would apply. The most solid, I think, is that statements made in open court and court documents are exempt from defamation claims, so quoting those documents and statements (particularly in context) would be too. I’m not sure how it plays in to this that the complaint was subsequently sealed, since it was out there and public for months. Anyone considering posting it should probably check with their lawyer.
If someone like myself were to read your interpretation of the relevant law and then acted on it (for example by posting the offending material) BUT, hypothetically of course, it turned out that you were wrong on the law and that I could, in fact, face some sort of legal penalty/liability for my actions — I could not sue you for legal malpractice since you are not my attorney, right? Thus, I would be left to defend myself and pay any adverse judgment out of my own pocket.
That’s probably right. I’m not practicing, and readers of this blog aren’t my clients. Legal advice costs money, this is free. I encourage anyone who is considering posting the complaint to check with his or her attorney and get advice as to whether doing so appears actionable in his or her jurisdiction. I’m most definitely not interpreting law for anyone’s consumption as legal advice here, as noted above. There are simply too many jurisdictional differences and subtleties involved in individual cases for me to do that. Professor Bartle mentioned his university’s legal staff, and I would recommend that he check with them if he has any concerns. He seems a fairly careful gentleman, and I suspect he has (or will) if he feels that is necessary.
Lastly, how come your perceived ethical obligation to remove the link to the complaint does not include removing Professor Bartle’s post, which links to the offending material?
Out of an abundance of caution — because I am an attorney and am making every effort to comply with relevant professional standards — I have chosen not to host the document at Virtually Blind myself, and I have even taken the truly extraordinary step of removing passages in the article above summarizing portions of the complaint, even though it had been publicly available for more than three months before it was sealed.
However, I have a policy of not editing comments on this site absent a request from the original poster. I just let my WordPress filters do their work, and whatever gets posted gets posted.
At some point, it is simply a question of practicality — I cannot do what I cannot do. I am not hosting the document. If I were to remove that comment at this point, though, I am certain that someone else will replace it with another. And another. And another. That, of course, is precisely the problem Mr. Pierce’s attorneys face on a larger scale, and it is a problem I decline to adopt.
Bluntly, I have gone well beyond what I feel I had to do here; I do not feel that my professional obligations extend to constantly policing other people’s comments on this website on behalf of Mr. Pierce’s attorneys. I’ve kept the lines of communication open, and they know that they can bring any fresh concerns to my attention. I will evaluate those concerns on a case by case basis. I have not heard from them regarding Professor Bartle’s comment.
I certainly understand Mr. Pierce’s desire to have this document disappear; it isn’t terribly flattering. But realistically, that just is not going to happen at this point. It is out there. The more his lawyers bash around with letters and vague threats the more attention people will pay to it.
And at bottom, like I said in the original piece, this is a one-sided court filing, and everyone who reads it knows that it’s one guy grinding an ax about another guy. Just like every civil filing, it is full of slanted interpretations and cherry-picked facts, and tells only part of a story. Readers, particularly readers at this site, know that.
In other news, I am making progress getting the amended complaint and answer in this case (this old complaint is the only document that has been sealed, the others are all public) and I look forward to bringing readers expanded coverage of these documents in the near future.
As I say on my blog (http://www.youhaventlived.com/qb…QBlog220208A.html), I don’t see this is being Brock Pierce’s doing, more his lawyers. Alan Debonneville looks worse for having said what he said than Brock looks for having had it said of him.
The reason I’ve placed a copy of the .pdf on my site is because it contains information useful to MMO researchers concerning the internal workings of gold-farm aggregators. The rather comical allegations made by Alan Debonneville are part of the context. Other MMO researchers who want to see how these companies operate (and, indeed, those who use their services) are being denied access to a public document by the zealousness of lawyers. Academics with a bona fide reason for seeing the material should have bona fide access to it. That’s why I’m making it available.
Should I receive a notice from an officer of the US courts or a law enforcement agent that I am in violation of some court order by hosting the doucment, then naturally I’ll comply with any instruction to remove it. Indeed, if I could find an email address for the clerk of the court in question, I’d get in touch directly and ask outright whether it’s OK for me to host it or not – I don’t hold the laws of the USA in contempt, and would not wish deliberately to defy them.
I’m pretty sure I’m not breaking the laws of England by making the document available, but again, would readily remove it were, say, a police officer to instruct me to do so.
Richard