Linden Lab Caves to Aggressive Lawsuit

I'm totally dismayed to see this outcome of the Bragg lawsuit -- a settlement, with restoration of Bragg to Second Life with "full privileges," a characterization of the entire affair as a "misunderstanding," and horrible moral and legal consequences for the entire community of Second Life that evidently neither party cares enough about to pursue this differently.

Because the terms are confidential, we will never know if the Lindens got to keep the sim that was taken from them at a lesser price, or if any legal fees were compensated on their side.

Linden Lab caved, merely to solve what could have been an expensive and timely lawsuit, that would have highlighted two features of their service that would have likely remained controversial and prone to lawsuits: 1) their claim that their emulation of land ownership, which is actually the rental of server space under their restrictive TOS, has to be backed up by really treating this land as real property; and 2) their long-term preservation of extensive chat logs, that raise questions about their respect of their customers privacy.

And Bragg settled, likely because something persuasive was put before him -- and we can't know what that is, and even to speculate about it is to invite the sort of malicious and vindictive lawsuit for libel that he threatened me and also the Lindens, too and anyone else who criticized him. That's just an awful chill on the origins of the Metaverse -- awful, awful.

Meanwhile, most residents of Second Life who have used the auctions know that in fact a wrong was committed -- an exploit indeed was used, deliberately, to get land cheaper than the stated auction opening bid. Calling that "legal" or "settling" on the matter, doesn't take away the immorality of it. We all know that, and our knowledge and conviction cannot be removed. You cannot shake conviction from people about what they believe to be true by trying to club them over the head with threat of a lawsuit.

Bragg has attempted to circumvent that knowledge and conviction by bullying bloggers like me with threats of libel suits, but to no avail: you cannot bully people's knowledge of the truth and willingness to express it.

Linden Lab harms the community, too, by refusing to concede this truth, which they know to be true as well -- that a URL to their auction was jimmied to grant someone a far cheaper price than everyone else.

To characterize the exploit of a URL as "a miscommunication" of how the product can be used strikes me as setting them up for endless malicious and spiteful lawsuits for the future, where every single exploit, wrongful reverse engineering, fraud, and any kind of misconduct can be attributed to "not understanding the law or the product as it wasn't communicated properly." And by settling, the Lindens imply that others can make aggressive bids for turning the tables on LL -- and get something out of it.

When two parties come to an agreement like this, they pride themselves with having used arbitration to resolve a business matter, and they pride themselves on having saved legal fees. It's a selfish, temporal approach without any concession to larger issues.

But when a wrong is committed, one party is indeed injured, and the other has indeed committed an offense, even if for whatever pragmatic business reasons, the two parties come to a settlement. And in this case, the wrong wasn't committed just to LL, but to all those who paid the normal price.

It won't be the first time that the community of Second Life pays the price for LL and those it decides to settle with.

Comments

[jake reitveld]

As they say in my business: "pricipals are expensive hobbies." Morally, you may be right, but legaly, Bragg may well have had a leg to stand on, not much of a leg, but a skinny little possibility of a leg. The evaluation is simple: this case goes to a jury. Twelve Housewives and retirees hear the case and decide the issue. I once prosecuted someone for armed robbery, and got my conviction, despite huge evidentiary problems, because the jury thought the defendant's witnesses pants were too baggy. Juries are random.

So LL takes a case that has some potential pitfalls and says-"We should win, and when we win, justice will be served, it will be a legal and moral victory."

A lawyer, paid to think of the downside, says "what if you lose? If you lose, not only will you have to reinstage Bragg, and pay him damages, but you may have to restore everyone you have banned, and return property, and accept exposure to potential claims with less merit in the future. Bad cases make bad precedent, don't let this go to trial."

LL says, OK.

We are at a good grounds for settlement even before you have discussed what Bragg was willing to settle vs. what high powered attorneys would charge LL to take a case to trial. Bragg is not paying for his legal services, I would assume. I know I could cost LL upwards of half a million to take a slam dunk case to trial. A more complicated and questionable one like this, with a high powered firm? Not worth it. And the principal is not worth standing on.

I saw this one coming a long way off, and really, being pragmatic, LL did the right thing.

[Levi Anansi]

Wow, figures. Just when I was starting to have a little faith in the ol' Lee again they go corporate and settle something as ethically easy to argue as this. I wonder what on the green earth convinced them to settle the case with Bragg? Is he as good at being an attorney as he is exploiting the vulnerabilities of SL? This is clearly a hit to the authority of Linden over their own domain. The next time I get banned for something as paltry as defending my own land, remind me to call Bragg and Associates. Perhaps I could profit from my loss of enjoyment in the metaverse. If I tip him enough he might just give me a strategy than might make money out of my part-time fun, and I won't need to do a thing!! What a great guy.

[Cherowolf Redgrave]

To quote one of my favorite sayings, "didn't see that one coming." I am shocked and saddened by this decision. I truly thought that LL would win this one hands down. Guess I was wrong. We now have a new word. When you cheat, brag about it and get away with it, you have BRAGGED someone. Wait. Can I say that and not get slapped with a libel suit? Damn. My backspace button seems to not be working today.

[jake reitveld]

Look, there probably is a teeny little hole in the TOS, there is a question as to whether Braggs actions were illegal or in violation of the TOS, LL already took a hit with the choice of law clause. So ethically easy to argue yes. But Legaly? Maybe not. This is a settlement not a precedent, and that is a good thing.

[Cherowolf Redgrave]

My backspace button is working now. Must have spilled something on the keyboard. Can I retract my previous comment so as to not get either of us in trouble? And here I thought the scariest news this week was that K-Fed got custody of the kids. What was I thinking?

[Levi Anansi]

Wow, figures. Just when I was starting to have a little faith in the ol' Lee again they go corporate and settle something as ethically easy to argue as this. I wonder what on the green earth convinced them to settle the case with Bragg? Is he as good at being an attorney as he is exploiting the vulnerabilities of SL? This is clearly a hit to the authority of Linden over their own domain. The next time I get banned for something as paltry as defending my own land, remind me to call Bragg and Associates. Perhaps I could profit from my loss of enjoyment in the metaverse. If I tip him enough he might just give me a strategy than might make money out of my part-time fun, and I won't need to do a thing!! What a great guy.

[Prokofy Neva]

Jake, uh, could you explain what that teeny little hole in the TOS *is*??

[Han Fei]

Well, there's not much we as individuals can do...except putting the Marc Woebegone account that LL welcomed back on every ban list to which we have access. The readers of this blog probably control several hundred ban lists among them, so this person may be back, but he'll have a hell of a time flying anywhere.

[Prokofy Neva]

Han Fei,

I like that idea, and I endorse it. It's a chore, but I'll get to work doing this ban manually on all my sims. I hope this idea catches on.

Prokofy

[jake reitveld]

In truth, Prokofy, I am not sure. I'm not paid to sit and analyze it, so i haven't. On the other hand, I can speculate that LL's pennsylvania attorney did, and likely found a term inconsistent with pennsylvania law. Since the choice of law clause was ruled to be an adhesion contract, LL might have drafted in a way that was allowed under california law, or not under pennsylvania law.

Or, perhaps more likely, the lawyers pointed out that what bragg did was not, in fact, illegal, and was an innocent exploitation of a gap in the coding. Bragg did not, perhaps know he was exploiting a bug in violation of the TOS, and since a contract is construed against the drafting party, LL erred in suspending his account and taking his virtual property.

This is the trouble with contract, very often if an action does not break the specific terms of an agreement, it must be allowed no matter how reprehensible.

Bragg did not break the law (a violation of the TOS) so ultimately, this could be seen as big bad LL stomping hard on a user for doing something he did not know was wrong.

That sort of logic will play to a jury.

[Prokofy]

>Bragg did not, perhaps know he was exploiting a bug in violation of the TOS, and since a contract is construed against the drafting party, LL erred in suspending his account and taking his virtual property.

I guess you didn't read the chat logs, Jake. They were published.

[Prokofy]

http://lawy-ers.com/bragg-amendedcounterclaim.pdf

[Prokofy]

Just in case Duranske or Bragg erase this material here:
http://virtuallyblind.com/2007/08/20/bragg-update-linden-lab-serves-rogs/

from here:
http://lawy-ers.com/bragg-amendedcounterclaim.pdf

Here's the relevant conversation:
52. User M.S. then instructed Bragg and User D.S. that there were “2 rules” to the scheme, namely, “do NOT ge[t] greedy” and “keep prices low so everyone can have a piece” and Bragg agreed, saying “so we don’t bid against you” and “we’ll keep land prices low.” Bragg and User M.S. both acknowledged the need to keep their unauthorized activity quiet, so that Linden would not shut down the exploit and terminate their accounts. Bragg and User M.S. further discussed the possibility of Bragg’s acquiring some of the parcels that User M.S. and User M.S.2 had already acquired using the scheme.

53. In their online chat on April 29, 2006, User M.S. also discussed how the parcels acquired in the scheme would be liquidated. Bragg asked User M.S. “how much do you and [User M.S.2] want for” the “sim,” and User M.S. stated “we’re asking a few of the [other Second Life users] for just under $900 us… they still think they go 4 $1000US.”

54. On information and belief, based on the statements he made during the abovereferenced communications with User M.S. and User D.S. on April 29, 2006, Bragg knew that
the scheme User M.S. had introduced to him would harm Linden, by enabling the participants to acquire “sims” for far below U.S. $1,000.00, which Bragg knew was the minimum opening bid
for auctions. On information and belief, based on the statements he made during the abovereferenced communications with User M.S. on April 29, 2006, Bragg agreed with User M.S. that
the above-alleged wrongful acts be committed, and Bragg further gave his cooperation and assistance to the scheme by, among other things:
(a) Offering to purchase parcels User M.S. and User M.S.2 acquired in the scheme,
(b) Agreeing not to bid against User M.S. and User M.S.2,
(c) Entering a bid as instructed by User M.S. for the Mul “sim,”
(d) Agreeing not to tell others about the scheme,
(e) Agreeing not to “get greedy” (in order to minimize the chance that Linden would shut down the scheme and take disciplinary action), and
(f) Agreeing to keep prices low so that all of the conspirators could profit.

55. Accordingly, on this basis, on April 29, 2006 Bragg joined an existing conspiracy between User M.S. and User M.S.2 to obtain something of value from Linden by fraud.

[katykiwi moonflower]

While it is better when parties can reach a settlement in a civil matter rather than handing the resolution over to strangers, I wish that this case had proceeded to judgment. There were some interesting legal issues that arose from this kind of case such as the application of consumer protection laws and commercial codes to virtual property transactions. In the end though, the practical consideration of of litigation cost won out.

Concerning the threat to bring a libel suit, under Pennsylvania law the plaintiff would have to prove malicious or negligent intent, which would mean publication of the statement would have had to be made knowing it was false or with serious doubts of its truth. In this case where chat logs were published and made part of court documents, it was reasonable to believe that the facts were as alleged. In addition, since the statement(s) published were already made part of the public record with the filing of the court documents, consent could be imputed.

Finally, PA case law allows the reporting of official proceedings, such as this lawsuit, even when the reporting includes defamatory statements as long as the reporting does not carry a greater punch than the original documents, which in this case would include court filings alleging misconduct and chat logs.

I am surprised however that Bragg focused on this blog to demand retraction and threaten suit but overlooked the vicious personal attacks repeatedly made against him on other sites.

[Simondo Nebestanka]

Wow good info Prokofy.

[Simondo Nebestanka]

Reading the counter claim, I feel a tremendous sadness that LL were unable to defend their position in court. I can definitely see the point that if LL were to fail in court, the effect would be worse than the current situation. And being such a peculiar, new medium, it's possible that Bragg's position could have easily confused a judge or jury enough to rule in his favour.

But I think the court of public opinion, those who understand the mechanics involved to some degree, can clearly discern what has taken place here.

And yes this is really quite a sad outcome in those respects.

In the recent SL Herald article, Cocoanut Koala said to Bragg, "I wish you had never come into SL". Bragg of course countered with something along the lines of "who are you to say?" Well my thought is, Coco's statement was a heartfelt reaction by a community member entitled to speak up, when it becomes evident that the community has been infiltrated by a malicious, calculating, devious and corrupt element.

Thank you Prokofy and many, many others for pursuing this.

[Prokofy]

Simondo,

Actually, I differ from Cocoanut on this in that I would never say to someone, "I wish you had never come to SL" or "I wish you'd be banished from SL". I simply don't think that's right. There are few things in my view that would warrant permabanning from SL -- it would have to be something like grossly crashing the whole grid or large parts of it repeatedly.

I also don't think that there is such a thing as the "community" in any real sense, although, sure, we can invoke a sort of general, public-interest concept of "the community" and what is broadly in its interests (and in this case, I think it's fair to say that most people would find the impunity for an exploiter who undermines the economy not to be in the public interest).

Because of course the community and what is broadly offensive to it is in the eye of the beholder. There's people who say I'm the one who is malicious, calculating, blah blah blah. Of course, I insist they're wrong, and they'r lying, but it's their right to say that, and perhaps some sincerely believe it (I actually think they aren't sincere at all, but one can posit a theoretical sincerity and leave the free space for it).

However, what I do insist on is the right to be able to make judgements and make public calls about this. Without this freedom, the society has no self-correcting mechanisms, no feedback. If you don't have the right to call someone malicious and corrupt, you cannot in fact get rid of malice and corruption, or at least, stop it from impacting people or deter and mitigate it. That's just fundamental to a free society.

What's wrong with Second Life is that these little cabals of people believe they can decide that something that we all know to be malicious and conniving isn't that, and play Eddie Haskell til the cows come home. Or they can brand something as malicious which isn't at all that. And so on -- the tremendous act of bad faith and the Big Lie.

I'm so glad that after reading this material, you got what the problem is. And you're right, because the technology is new, you couldn't necessarily rely on a jury or the media or the general public to get this.

I guess I have way more confidence in the media and the jury system. The state has to make its case to a randomly selected, not expert, and probably poor prepared entity called a jury. That's ok. That's a good thing to make states do, in my view. And in this case, I think the state and the prosecution can make the case, it really isn't that hard to do, with all the analogies brought forward like changing the stickers in a store, etc.

So, yes it's sad, very sad.

Thanks so much for your remarks, katykiwi, I think it would have been good to see judgement as well.

[Lem Skall]

Simondo, if you want information without bias then go to those other sites where Prok got the information from himself.

Prok, pah-leaze, stop with the self-serving, self-praising comments depicting yourself as a champion of freedom and as a victim of evil.

[Prokofy]

That's the sort of thing that needs to be said to you, Lem, as you imagine yourself the saviour of babies in the Third World. Try saving a baby closer to home.

[Lem Skall]

"you imagine yourself the saviour of babies in the Third World"

Whaaa? Maybe you're thinking of Angelina Jolie, but I never had that image of myself.

[Cocoanut Koala]

Well, I wouldn't say I wish he would be banned from SL, either.

In fact, I DON'T think he should be banned from SL.

But I do wish he had never come into SL. And I wish he weren't here now.

AND - I hope he's miserable here.

But he'll be happy as a clam, turning to his next victim to sue.

Because that is what makes him tick.

coco

[jumpman lane]

Linden Labs CAVES on everything. to remain free (gambling, agepaly bans) and avoid the loss of money (from fines, lawyers fees, and lost revenue). All that is understandible. What sux is the mealy-mouthed lipservice too all "goodness" these tards make to "fairness", "tolerance", "right" etc while proceeding to do their pragmatic best to cave and cave and cave. LL is left lookin smarmy as a result. Or more to the point their EMPLOYEES do.

[jake reitveld]

Well I take everything contained in a complaint or counter claim with a grain of salt, unless they are verified. These are documents that are designed to get you into court, ultimately they bear little resemblance to what actually happened, and perhaps less so to what can be proved.

LL's counterclaim makes the inference from the conversations that these people knew they were violating the TOS and were being hush hush. Thats an argument, to be sure, but then it is equally possible to convince the jury that the secrecy was about keeping other users from finding out, and not from keeping LL off the trail.

Its not just about trial costs, if it were simply about trial costs, LL would have jumped at the chance to set precedent. Their lawyers would have made a lot of money and tier would go up.

my guess is that discovery showed LL something that might have been persuasive, and in an abundance of caution, they settled, rather than establish a bad precedent.

[Prokofy Neva]

Oh, I think it's the opposite. Discovery showed Bragg something persuasive, and finally beaten at his own game, he withdrew. That's the only explanation there can be, frankly, when you realize that his entire gambit of the lawsuit was launched the minute they caught him with the exploit, so as to serve as a grand distraction and to sap their strength. He pursued it very aggressively, and then suddenly out of the blue stopped short. His purpose was never to settle but to hammer on what he felt were their weaknesses, the inadmissibility of calling virtual land "real estate".

Trial truth is not truth. Settlement lies are for settling.

[Cocoanut Koala]

Jake, of COURSE he knew what he was doing. You'd have to be in a paper bag to not know what sims went for.

And you'd have to be deluded to think that going in via a back door to get them for far less than intended was in ANY way how the thing was supposed to work.

You might as well try to convince people that a guy who found the back door to Macy's open and went in and helped himself to the merchandise was acting in innocent good faith.

coco