Class Action Lawsuit Against Virtual Real Estate Scams

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The profile of CP Costello, owner of Second Life based real estate business CP Realty, was recently modified to announce incorporation in the 'real world'. While that isn't particularly significant, this shift seems to have motivated them to begin filing class-action lawsuits against those running virtual real estate scams.

[...] we will be hireing a legal team to pursue what we feel is unfair practice in game. First issue at hand will to aquire a court order for RW names of players that cut and ruin sims with adfarms for profit while damaging value of property owners.IF you have land that has been damaged ruined or devalued you need to contact My self in the next few days we will have a group in place for a future class action suit .

This not only has the potential to affect the smaller businesses around Second Life who fall victim to land extortionists, but large real-world companies like Coldwell Banker who have been accused of using extortionist tactics themselves. Anyone perusing the mainland for any amount of time has witnessed the phenomena of tiny 16m plots of land with spinning "For Sale" signs, available for purchase at a high rate. Between this and griefing, the mainland has been all but useless for larger business applications.

To find out more, I contacted CP Costello directly. When I asked about what court this was going to be filed in, he replied: "WE ARE STILL IN THE PROCESS OF GETTING REAL NAMES FROM LINDENS - when i am closer we will be searching out people to join." He declined to comment further.

Whether this class action lawsuit goes any further than a comment on someone's profile remains to be determined, but with the growing legitimacy of virtual worlds as business places, the numerous land scams that cover the surface of Second Life are bound to be prosecuted. We'll keep you posted if anything goes to court.

(via Your2ndPlace)

I hope this approach will gain some traction. I'd be happy to join such a suit against ad farmers.

The question is whether this would compel Linden Lab to change its practice of tolerating ad farms and devaluation of one's land through sign griefing and extortion. I imagine it will not.

The response from LL is likely to be: anyone can do what they want on their land if it has no covenant. If you don't want ad farms in the view, buy our islands.

That's essentially what they say right now.

Will being tied up with having to cooperate with dozens of lawsuits against ad-farmers and other blight-griefers force LL to start interpreting their TOS differently? It's always been my claim that they have the appropriate language and enablement, within the existing TOS, i.e. with the community standards notion of not interfering with the enjoyment of SL for another, or even the clauses about "spam" (ad farms are indeed like spam). Why is it not ok to unleash notecards with ad texts on one's fellow residents against their will, and face disciplinary action for coming into their personal view, but just fine to unleash ugly repetitive spam ads across the landscape, placed permanently in the view?

However, I suspect that the desire to reassure businesses that they can advertise however they like and more importantly, reassure their inner core that they have absolutely creative rights unimpeded by neighbours, will lead LL to say that they provide no guarantees of view to those who don't buy it.

While I would like to see a lot less spinning ads, I don't know that this would hold up in court. There are no zoning laws and I'm sure the ad farmers would argue that it is their right to place ads, just as they can place ads anywhere else on the internet.

I also would prefer LL to not start making any more judgment calls on what business can and cannot operate in SL. It's all fine and dandy to think they should shut down the business "everyone" wants shutdown, until suddenly its your business they target.

It would be nice to implement a feature that would allow a land owner to "block" unsightly structures that aren't on their land...

It is a reasonable suit. Not a slam dunk by any stretch, but definitely reasonable. Good enough that if I was practicing right now, I'd strongly consider filing it for them. The best theory here is probably breach of a third party beneficiary contract. The class would argue that by placing spinning signs up in violation of some provision of the terms of service designed to protect residents, the ad farmers have violated their agreement with LL. The interesting thing about this approach that this lets the class force a reinterpretation of the TOS via the courts without having to name Linden Lab in the suit. There are other causes of action that I'd plead here too, including interference with a business relationship and interference with contract.

Someone has tried this in a different context in WoW, suing IGE, a gold farming company, under these causes of action and a handful of others. All they've managed to do so far is get the complaint served via the IGE's , so there's no real progress, but the complaint it self is interesting. Here's a link to all the documents:

http://news.justia.com/cases/392882/

And this link will take you directly to the complaint, if you want to read more (pdf).

http://casedocs.justia.com/florida/flsdce/1:2007cv21403/296927/1/0.pdf

On second thought, what about LL implementing a community management feature for the mainland? Sort of like a RW neighborhood regulations (your house can't be more then 2 stories... must be bigger then XX square feet, lot lines and such). That way the majority of owners in a particular region could ban together and remove them from their area in a similar manner that can be done with islands and covenants.

[edit] found the feature request for the ability to block ads using "visibility mute" here

It's not businesses that they'd be thwarting, but bad business practices.

It is unethical to use extortion and griefing to force a sale, and a poor business practice. Advertising in real life is zone; you cannot place an ad up on a prime beachfront or right smack on the border of someone's residential property glaring up at them. No, the Lindens just aren't willing to move against content, ever, unless RL law finally impinges on their virtuality. And RL law doesn't just automagically "apply" -- it only applies when litigators make it apply, and get a lawsuit or threat of a lawsuit to stick.

The solution for your suggestion, Anthony is to either move to the islands, or get this group of people in advance in some sort of likeminded group, and have them buy, say, 4 sims off the auction, being willing to bid high. Then they can more or less control the view, but of course 16 would be ideal...and then there will always be trouble on the flanks somewhere.

I really don't like the idea of a group of smug fanboyz being able to vote me off land I paid a purchase price for and paid tier for -- I'm certain I speak for many people on that one! It's just not on. There just cannot be separation of a man and his property that he has paid and tiered -- that's simply an unacceptable abrogation of property rights.

In real life, neighbourhood associations can tell you not to paint your house purple, or tell you to have only a certain kind of siding, but you will have agreed to such a covenant or informal understanding when you purchased in that tract. In SL, if you were first to buy in a sim, why should people who come later, on parcels smaller than yours, be able to dictate to you?

No, that's not how I'd like to see this done. The Lindens, under pressure of the lawsuit, which invokes community standards language about spam, interference with enjoyment of second life, etc. decide that they can and should "for any reason or no reason" remove this content and make a GASP social policy -- just like they make other social policies, like *cough* the unsupportable and unjust concept of making people liable to discliplinary action for pasting an IM into chat.

Let them put their energies into really preserving value in SL, instead of taking it away.

Linden Lab wants to be a platform provider. They continue to be reluctant to get involved in the details of user created content except where they feel there is a legal liability for them. I think this is the right approach for them. I agree with Anthony Reisman above when he states that the business they target next could be your own. If they start down that path it becomes a very slippery slope and has no clear end point.
Recently, land adjacent to my own had an obnoxious spinning "For Sale" sign placed on it. My neighbor and I placed vertical prims on our property edge and textured them with landscapes. An imperfect solution to be sure, but it has helped to limit the eye sore. My sim does not have ad farms, happily, but an imperfect solution may be to construct a vertical structure with either a landscape or an office building or other texture that obscures the view of spinning signs and eliminates the effectiveness of the advertising.
I appreciate the frustration of land owners faced with these issues, but I believe that LL will continue to avoid involvement in these types of issues, and they should avoid involvement or they risk becoming sucked in to becoming the equivalent of the Government in RL. While some will say they already are, and to some degree it is true, every step they move forward down that path causes that sticky web to be more complex. The end result would mean more rules and restrictions for all of us.

Wow, I can't believe my eyes.... this is truly amazing.... and just so incredulous!

When I first joined Second Life, I bought my first piece of land in Bembecia. There was a small 16x16m2 piece that was craved out of the land immediatley next to mine. I wanted to buy tthat parcel, and when I contacted the owner to see if it was a mistake that the 16m2 square was not part of the sale of the whole, I was told very curtly, and actually a bit rudely, that it was intentional.

What amazes me is that the owner of that parcel was CP Costello.... and now he wants to start a class action suit against similair 16m2 parcel owners?

I can't agree that the fundamental legal basis for the suit is reasonable, or that it could withstand a motion to dismiss. There are no zoning rules in SL unless you impose them on your own land. From an equitable basis, how does CP Costello justify that he once carved out his own 16m2 parcel, and I was just a newbie then. And what class could be described? The entire class of land owners? Just the class that is immediately affected by the advertising, and thne how remote must an owner be to be "damaged", and how would you prove damage? Land price devaluation that somehow deviates from the existing trend?

Beauty is in the eye of the beholder..... I don't like billboards all around the RL roads and highways, theyr'e quite ugly. In SL, some are ugly, some are interesting, some are statements, opinions, and might even fall under the protection of free speech....

At the end of the day, anyone can buy a parcel, or sim, and there's no limitaiton on the number of them that can be added by the company. Isn't an endless world big enough where everybody can do anything they want? You don't have to go or look at a sim with 16m2 plots, there's lots of other places without them to go.... so a lawsuit to stop them? Why?

If CP Costello is the one charging this suit, and he's waiting for Linden to "give" him more information to get started, then shouldn't he put his own real name as a defendant that his corporation is suing? And "give", please..... did he mean issue a subpoena, or does he have some relationship wiih Linden that they will turn over private information / names of others just for asking?

I've searched, and can't find a class action filed anywhere by a CP Costello, but I could be wrong. Would really appreciate a link or reference if anybody's got one.... perhaps this is just a blunt attempt to dissuade someone near his land from putting up more 16m2 signs next to his own 16m2 parcels.

Marc