Where can a game developer get sued in the U.S.?

There are a lot of ways that things can go wrong during game development that can open the developer up to liability, either to a customer, a contractor or a publisher. Beyond just using methods to limit liability for these actions, it is instructive to know just where in the country a U.S.-based developer can be sued. I’m not going to touch on foreign entities in this post; maybe we’ll get to that in the future.

This is going to be a two-parter. The next post (next Monday) will deal with contractual clauses that govern jurisdiction, like in a website’s Terms of Service.

A personal jurisdiction primer:

When there is no agreement that dictates jurisdiction, the court that someone can be sued in is governed by the rules of personal jurisdiction. As usual, there are a ton of cases that govern this and it can get really complicated really quickly.

I’ll try to give you the short version.

Internet personal jurisdiction is a relatively new phenomenon that began when (you guessed it) people began suing the people and entities that run websites. The non-Internet rule is that the dispute must arise out of the defendant’s contacts in the forum state.

For example, if you live in California and buy a car from a Detroit auto manufacturer that explodes, can you sue them in California? Yes, since they are selling lots of cars in California. This meets the “minimum contacts” test that gives California courts personal jurisdiction over them. An example that has a connection to game development is the Washington State lawsuit against the company running a Kickstarter campaign.

What about when the “product” is a website or a game, and not a physical thing?

Courts look at whether the defendant (the developer or site owner) has “purposefully availed themselves of the privileges of conducting activities within the forum state.” In an Internet context, a court would look at the degree of commercial activity that the site has in that state. If a service provider is “clearly doing business through its web site in the forum state,” and the dispute is connected to that service, then they can rightfully be sued there.

Let’s look at a game development example:

You are selling in-app purchases for your game (again, assuming there is no contractual agreement governing the person’s use of the game) and someone buys $2,000 in virtual currency. Suppose that there is some kind of wild server error that erases that currency or some other craziness that results in them essentially being out $2,000. If they live across the country, they will obviously want to sue you there to recover their money. Since you offer the app for sale in every state, and most likely there have been a certain number of purchasers in this user’s state, you will probably be subject to personal jurisdiction there. This means that, to defend against the lawsuit, you will have to appear in court there. No one wants to deal with that kind of hassle.

What’s the point? Mainly that, if you’re not using a Terms of Service to govern jurisdiction, you could be opening yourself up to being sued all over the place. There is a point to having those, after all!

We’ll see how easy this is in next week’s post. Stay tuned!

photo credit: Jeffrey via photopin cc