Epic Games can’t force minor into arbitration, US judge says

So long as he keeps his hands off "Fortnite," Epic Games can't force a minor leading a putative class action against them into arbitration.

Given the many references in the complaint to the game's particular popularity among children and its addictive design, giving up the game will likely be no easy ask for a minor plaintiff suing the game's makers for unjust enrichment and false advertising. But a federal judge found that's the price he'd have to pay to avoid binding himself to an arbitration clause now found in the game's End User License Agreement.

The game earned $2.4 billion in 2018, according to the complaint filed in February. The plaintiff contends that windfall is largely the result of the game's progression system, which preys on the addictive tendencies of its young audience to induce them to gamble using actual currency. Players can earn in-game items at a glacial pace by playing the game. But they're given an opportunity to seek the items through purchasing "lootboxes" with "V-bucks," a virtual currency purchased using real-world money. The company uses "V-bucks" to obfuscate the fact players are paying large sums of actual money for virtual items, according to the plaintiff's attorney, Daniel L. Warshaw of Pearson, Simon & Warshaw LLP.

"Plaintiff believes younger players have difficulty conceptualizing how much actual money is spent on these in-game purchases with V-bucks," Warshaw wrote. "By only allowing V-bucks to be bought in currency packs and setting the prices of items at odd amounts, defendant induces players to need more currency to buy them."

Players have been required to accept the company's license agreement in order to play Fortnite since the game's October 2017 launch. But language binding players to arbitration was only added in March 2019, a month after the plaintiff filed suit.

In spite of his apparent grievances with the game, attorneys for Epic Games said their records showed the plaintiff continued playing the game after filing suit. As he'd played the game post filing and agreed to its updated license agreement in March, attorneys for Epic Games argued he bound himself to the newly added arbitration clause.

Though California law allows minors to contract "in the same manner as an adult," U.S. District Judge George Wu wrote in an order rejecting the arbitration request last week, those contracts are subject to disaffirmation. A doctrine that protects a minor "against himself and his indiscretions and immaturity as well as against machinations of other people," disaffirmation was properly invoked by the plaintiff through a notice filed in July, Wu found.

As records show he hasn't played the game since, which would require him to once again agree to the new licesen agreement, Wu said he couldn't compel arbitration. But since disaffirmation of a contract is an all-or-nothing deal, the plaintiff will likely have to keep his hands off the joystick for years to come if he wants to litigate his claims.

While ruling the plaintiff wasn't bound by the new language, Wu found he was obligated by a clause included in the initial license agreement granting Epic Games choice of venue. He approved Epic's request to move the case to North Carolina, where the company is headquartered.