Last week, a B.C. man’s attempt to file a class action lawsuit against a prominent video game maker for its usage of “loot boxes” drew closer to fruition.
Justice Margot L. Fleming of the B.C. Supreme Court ruled on Tuesday that certain of the charges against Electronic Arts Inc. and its Canadian subsidiary Electronic Arts (Canada) Inc. established a sufficient “cause of action” for the case.
Fleming dismissed other claims in the complaint but allowed Mark Sutherland, the intended representative plaintiff, to alter his claim.
UNCONSCIONABILITY AND UNLAWFUL GAMING
Sutherland’s lawsuit further said that EA had participated in “unconscionable” conduct by breaking Criminal Code regulations pertaining to unlawful gambling.
This argument was refuted by Fleming for several reasons. In the context of British Columbia’s Business Practices and Consumer Protection Act, unconscionable actions and practices require the allegation of two elements: “a disparity of negotiating power and a resultant imprudent deal.”
According to the ruling, allegations that EA had breached the law did not illustrate either of these elements.
In addition, Fleming examined the accusation of “illegal gambling” under the Criminal Code and concluded that it lacked merit.
Sutherland contended that purchasing loot boxes satisfies the code’s “wagering” requirement, but the court disagreed, saying that since EA does not offer a mechanism to “cash out” in-game virtual money, purchasing a loot box is fundamentally different from laying a bet.
Fleming did not completely reject the unjustifiability argument, however. She highlighted that, if accurate, several of Sutherland’s allegations regarding EA’s conduct might constitute an imprudent deal based on an imbalance of negotiating power.
Judge gave Sutherland permission to alter his allegations based on unreasonableness, “putting the claim based on illegality aside.”
LITIGANTS REACT
Wednesday, the legal firm representing Sutherland and a plaintiff in a planned class action in Quebec, Slater Vecchio, released a statement in response to Fleming’s judgment.
Sam Jaworski, a partner at the company, said in a statement, “This judgment is the first step towards addressing the legal issue of loot boxes in video games and the harmful impact it may have on consumers.”
This is going to be a lengthy process, but we will continue to advocate for consumer interests.
EA also responded to the ruling, hailing the judge’s rejection of the Criminal Code charges as a victory.
The company’s statement states, “We are glad that the trial court dismissed as a matter of law the charges of illegal gaming.”
This further supports our stance that none of our games involve gambling. We think the other allegations lack validity and will continue to defend forcefully against this opportunistic lawsuit.”
REQUIREMENTS FOR CERTIFICATION
To qualify as a class action, a complaint must have pleadings that “disclose a cause of action” – essentially, a collection of asserted facts that, if found true, would lead a court to decide in favor of the plaintiff.
By concluding that Sutherland’s allegation that EA engaged in deceptive conduct is not doomed to fail, Fleming has found that the first prerequisite for a class action has been fulfilled.
In her conclusion, the judge did not weigh in on the other certification criteria because she offered both parties further time to submit additional arguments regarding the unconscionability portion of Sutherland’s claim.
After determining if the unconscionability claim reveals a cause of action, the court will examine four further factors before certifying the class action and permitting it to proceed.
Class actions need a class of at least two individuals. In Sutherland’s case, the proposed class includes all residents of British Columbia who have paid directly or indirectly for loot boxes in over 70 EA video games since 2008.
Moreover, to be certified, class actions must:
Raise topics that are shared by all class participants.
Should be preferred above individual instances for “the fair and efficient settlement of common concerns”
In addition, there must be a representative plaintiff who sufficiently represents the class, has a “workable” plan for the litigation, and whose interests do not clash with those of the other class members.
