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Makers of Second Life Face Class Action Over Virtual Real Estate

Philadelphia, PA: The makers of the massively popular virtual reality game Second Life are facing a potential federal class action lawsuit brought by four members who allege that Linden Research induced thousands of people to invest as much as $100 million of real money in virtual properties, then reclaimed those virtual properties from the purchasers without compensation.

The plaintiffs, Carl Evans, Donald Spencer, Valerie Spencer and Cindy Carter, claim that during the early 2000s Linden Research and its founder Phillip Rosedale promoted commerce and virtual property ownership within Second Life, using press releases and media interviews. The suit further alleges that the company claimed it would protect members rights to their virtual property, and that those properties could be used as a source of revenue for the owners. However, the plaintiffs contend that instead they were increasing the value of Linden Research in advance of an initial public offering or sale of Second Life. And, Linden Labs, at no time, made any attempt to compensate an estimated 50,000 participants who purchased virtual real estate based upon the company's promises.

The suit seeks declaratory and injunctive relief, compensatory and punitive damages on claims of fraud, conversion, intentional interference with contractual relations, unjust enrichment, wrongful expulsion, and violations of California's Consumer Legal Remedies Act, False Advertising Law and Unfair Competition Law.

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Last updated on Apr-22-10