New York litigation boutique Shalov Stone Bonner & Rocco recently filed a class action lawsuit against NVIDIA Corporation for alleged securities fraud. The complaint alleges that NVIDIA lost more than $3 billion in market value due to a “series of misrepresentations and omissions that actively concealed and failed to disclose the unusually high failure rates of Nvidia’s mobile video adapters.” The class action covers November 8, 2007 through July 2, 2008 and names NVIDIA Corporation, CEO Jen-Hsun Hunag, and CFO Marvin Burkett as defendants.

Hewlett Packard and Dell previously acknowledged the problems with the NVIDIA cards in 2007 and began offering BIOS workarounds, however it took NVIDIA until July 2, 2008 to institute a nearly $200 million warranty and repair program for the defective chips. Apple recently acknowledged the problem with NVIDIA chips in their previous MacBook Pro line and is offering to reimburse customers that have already paid for a fix.

You can download the full complaint here.

[via cnet]

It’s no secret that Microsoft has had it’s share of problems with the Xbox 360 console. At launch, the biggest problem was console availability. However, Microsoft has faced a number of hardware issues since launch, most notably the “Red Ring of Death“. Despite numerous other Xbox 360-related lawsuits, Microsoft — perhaps to its own surprise — has yet to face any litigation related to the Red Ring issue.

That has recently changed. A class action lawsuit was recently filed in Sacramento Superior Court on behalf of all Xbox 360 purchasers and owners that experienced hardware malfunction, often accompanied by the “Red Ring of Death”. The complaint alleges that Microsoft engaged in unfair business practices by selling inherently defective consoles that are “unreasonably prone to malfunction”. The complaint further alleges that Microsoft concealed knowledge of the defects and otherwise engaged in fraudulent business acts.

The complaint seeks, among other things, equitable and injunctive relief in the form of an order requiring Microsoft to publicly announce and implement a program to refund the price of malfunctioning Xbox 360 consoles; restitution, disgorgement, and/or a constructive trust on profits attributable to any unjust enrichment; and any interest and related costs.

The full complaint can be downloaded from Laws of Play here.

[via DailyGamesNews.com]

If there exists a segment of the population more vocal and protective of their hobby than gamers, I would love to meet them. No longer content with complaining on forums and signing meaningless Internet petitions, Antonio Hernandez, a former Orlando-area video game store assistant manager, has taken his grievances to court.

Hernandez, an avid World of Warcraft player, has filed suit against Internet Gaming Entertainment, Ltd. (“IGE”) in Fort Lauderdale, FL.  Hernandez claims that IGE’s practice of gold farming diminishes the enjoyment and satisfaction of consumers and violates the World of Warcraft Terms of Service.  Hernandez ultimately argues that gold farmers damage the game’s economy by forcing legitimate players to spend more time earning the virtual currency that is necessary to improve their in-game personas.   Hernandez’s suit claims that “[t]his loss of time, conservatively, amounts to hundreds of thousands of hours of subscriber time and causes the irreparable harm of driving subscribers away from ‘World of Warcraft’ . . . .  The economic harm incurred by this loss of time is in the millions of dollars.”

In response, IGE claims that:

Hernandez and other players have no standing to sue because they have no ownership or property rights within “World of Warcraft.” Hernandez’s lawsuit fails to show how he suffered actual damages[.]

Interestingly, if IGE is correct and World of Warcraft players have no ownership or property rights within World of Warcraft, one must wonder how IGE is able to sell in-game assets for real-world currency in the first place.

What makes this case interesting is that it’s the first time a player has filed a lawsuit in response to “real money trading” in a virtual world.  Hernandz also hopes to make this the first class-action lawsuit involving online role-playing games.

When asked about the litigation, Paul Sams, Blizzard Entertainment’s Chief Operating Officer, commented:

We believe that shutting down gold farming and real-money transfer is in the interest of all ‘World of Warcraft’ players and that a victory in this case would have a positive long-term effect on the online gaming industry as a whole.

For more about this pending litigation:

Sarasota HeraldTribune
Justia

In August of 2007, a Georgia man filed suit in state court claiming that Microsoft broke Georgia law by allowing his son, a minor, to use his debit card to sign up for Xbox Live and further violated Georgia consumer regulations by renewing the service contract without written authorization.  In response, Microsoft recently filed a motion to have the case transferred to federal court.

As a result of Microsoft’s alleged “fraudulent induc[tion of] a contractual relationship for Xbox Live services,” the Georgia man, Francisco Garcia, was assessed a $35 overdraft penalty by his bank.  While Microsoft refunded the Xbox Live subscription fee, the overdraft fee was left to Garcia.

Garcia is seeking unspecified damages and has asked the court to incorporate a class of all Xbox Live customers in Georgia faced with similar problems.  In response, Microsoft has motioned to dismiss the case, citing that Garcia’s son misrepresented his age when registering for the Xbox Live service.

For more info, see: Information Week
Destructoid

Take 2 Interactive recently announced that a settlement has been reached in the Hot Coffee Mod class action. Pending final approval from the US Dictrict Court for the Southern District of New York, members of the class will be entitled to exchange their game disc for a new disc without the offending content or recover $35 if they meet several criteria.¹

According to the press release, Take 2 has agreed to spend at least $1.025 million on settlement benefits, and the settlement generally caps the defendants’ out-of-pocket costs at no more than $2.75 million, in addition to the costs of providing notice to class members and paying a fee to plaintiffs’ counsel.

Take 2 CEO, Ben Feder, also commented on the settlement in the press release:

If the case had continued, we believe the court would have agreed that Take-Two was not liable for consumers acting independently to modify their games with third-party hardware and software to access normally inaccessible content… Nonetheless, we believe it is in the best interest of the Company to avoid protracted and costly litigation to prove our case and to finally put this matter behind us.

For the full press release: Take 2 Games

1. The members of the class must swear that they (1) bought a copy of Grand Theft Auto: San Andreas before July 20, 2005, (2) were offended and upset by the ability of consumers to modify and alter the game’s content using the third-party Hot Coffee modification, (3) would not have bought the game had they known that consumers could modify and alter the game’s content using the third-party Hot Coffee modification, and (4) would have returned the game, upon learning the game could be modified and altered, if they thought this possible.

Finally, finally, finally the original law evading celebrity (“LEC”), O.J. Simpson, is back in the news and, refreshingly, this time it’s not in his favor. Reuters is reporting that the ex-football star will have to turn over any money he has obtained through royalties from Take-Two’s All-Pro Football 2K8 which uses his likeness as one of it’s players in order “to satisfy a $33.5 million judgment won against Simpson.”

Simpson, who has maintained his innocence from the get go, was found not-guilty of the murder of Ron Goldman and his ex-wife, Nicole Brown Simpson in 1995. But, in a civil suit brought forward by the Goldman family two years later, he was found legally responsible for their deaths. Yes, the world of law is a strange place. Simpson has refused to voluntarily pay any of the money the suit says he owes, but that doesn’t mean that the courts can’t drag it out of him. Los Angeles County Superior Court Judge Gerald Rosenberg ordered Simpson to turn over payments that “have been paid, are due or may be due in the future.” Simpson was also ordered to release all contracts and paperwork affiliated with Take-Two to the court.

Reuters, in what appears to be an attempt to extend the length of their story, also drew a connection between the fact that All-Pro Football 2K8 has a team called the Assassins and that said team’s mascot is a hooded man with a stabbing knife. Reuters then decided to watch a video of the game and found Simpson playing as an Assassin:

As previewed on a Web site for video game promotional trailers, the team mascot is a hooded figure who makes stabbing motions with a large knife in the end zone when the Assassins score. Simpson does not have to be assigned to that team, but he was in a clip shown on the Game Trailers Web site.

Way to make video games the bad guy in an article about O.J. Simpson, Reuters. Bravo… bravo. Like Take-Two needed more bad press. Take-Two, which doesn’t seem to care where its money is going as long as their not-so-good name isn’t tarnished further, has responded to the game bashing with a standard PR quote:

[The Assassin mascot is] not specifically associated with O.J. Simpson, and the game does not promote any such connection.

According to the Seattle Post-Intelligencer, Microsoft has recently settled the dispute of Kevin Ray v. Microsoft Corp. The case, originally filed as a proposed class action, was settled as an individual action.

In the case, Ray alleged that the Fall 2006 Xbox 360 Update caused his Xbox 360 to malfunction, rendering it useless. Following Ray’s initial complaint, Microsoft motioned for summary judgment and argued that it has since extended the Xbox 360 warranty and replaced Ray’s Xbox 360 free of charge.

The terms of the settlement were kept private, but I can’t imagine Ray made off with much considering Microsoft’s free console replacement and numerous warranty extensions.

For the full report, and a copy of Microsoft’s summary judgment motion, see: Seattle P-I

Hot off Microsoft’s announcement that a 3-year warranty program would be put in place to alleviate consumer complaints about ”general defects” in the Xbox 360 console, a Florida man, Jorge Brouwer, has filed a class action lawsuit against Microsoft claiming that the Xbox 360 was “negligently designed and manufactured” and, as a result, causes “destructive scratches” to discs placed in the system.

The “destructive scratch[ing],” pictured above, occurs when an Xbox 360 console playing a disc is turned from the horizontal to vertical standing position.  Mr. Brouwer’s attorney, Jeffrey M. Ostrow, claimes that “[Microsoft doesn't] tell you not to move the tower.”  While this defect was discovered not long after the launch of the Xbox 360, this is the first lawsuit filed in regard to the defect.

Microsoft’s extended warranty program, estimated to cost the company over $1 billion, does not cover the defect described by Mr. Brouwer.

According to the Miami Herald, Microsoft officials released the following statement:

We’ve only just learned of this lawsuit, so we haven’t had time to evaluate it. However, out of the millions of Xbox consoles in use, Microsoft has not received any widespread reports of Xbox 360s scratching disks.

It seems to me that there are several flaws or, atleast, miscommunications on the side of each party.

For one, Mr. Ostrow’s claim that Microst doesn’t inform customers not to move the tower is false.  Shortly after the problem with scratched discs was first uncovered, Microsoft began affixing a label to the DVD drive of new Xbox 360 consoles that warns not to move the system while in use.

For two, Microsoft’s claim that they have not received any widespread reports of Xbox 360s scratching discs is clearly false.  Microsoft has had a program in place offering repairs on discs that are scratched by the Xbox 360 and even went so far as to offer free replacement games published by Microsoft Games Studio.

Have any readers had issues with scratched discs?

For more info, see: The Miami Herald

A federal securities fraud suit filed in the United States District Court for the Northern District of Illinois alleges that Midway Games Inc., creators of Ms. Pac-Man and Mortal Kombat, misled their investors about the company’s financial condition and violated the Securities Exchange Act of 1934. The lawsuit, filed on behalf of shareholders who purchased stock between August 4, 2005 and May 24, 2006, alleges that Midway’s top officers and directors made false statements about Midway’s fourth quarter 2005 performance and sold off over $14 million worth of shares on the open market before announcing the decision to sell $75 million in convertible notes. This flood of notes diluted current shareholders’ stock and caused a 67% decline in share price.

In addition to Midway Games, Chief Executive Officer David Zucker, Chief Financial Officer Thomas Powell and numerous other executives were named in the suit. The suit is being handled by Amelia Newton of Chicago law firm Lasky & Rifkind.

[Update July 16, 2007] – This suit is now being taken over by Darren J. Check and Richard A. Maniskas of Schiffrin Barroway Topaz & Kessler.

For more info, see: The Chicago Tribune