Linden Research, Inc., operates a multiplayer role-playing game in the virtual world known as “Second Life” at secondlife.com. Participants create avatars to represent themselves on the site. In 2003, Second Life became the only virtual world to recognize participants’ rights to buy, own, and sell digital content—virtual property, including “land.” Linden’s chief executive officer, Philip Rosedale, joined efforts to publicize this recognition and these rights in the real world media. Rosedale also created an avatar to tout the rights in Second Life town meetings. March Bragg, an experienced Pennsylvania attorney, was a Second Life participant whose avatar attended the meetings, after which Bragg began to invest in Second Life’s virtual property. In April 2006, Bragg bought “Taessot,” a parcel of virtual land. Linden decided that the purchase was improper, however, and took Taessot from Bragg. Linden also froze Bragg’s account, effectively confiscating all of his virtual property and currency. Bragg filed a suit against Linden and Rosedale, claiming that the defendants acted unlawfully.
(a) In the federal district court in Pennsylvania that was hearing the suit, Rosedale, who lives in California, filed a motion to dismiss the claim against him for lack of personal jurisdiction. On what basis could the court deny this motion and assert jurisdiction? Is it fair to require Rosedale to appear in a court in a distant location? Explain.
(b) To access Second Life, a participant must accept its “Terms of Service” (TOS) by clicking an “accept” button. Under the TOS, Linden has the right “at any time for any reason or no reason to suspend or terminate your Account,” to refuse to return a participant’s money, and to amend the terms at its discretion. The terms also stipulate that any dispute be resolved by binding arbitration in California. Is there anything unfair about the TOS? Should the court compel Bragg to arbitrate this dispute? Discuss.