The Poké Balls are in your court

Sept. 29, 2016

By Andrew L. Rossow, Esq.

This article is a follow up to my earlier publication this summer, Gotta Catch a Lawsuit[1] addressing the class action lawsuits filed in federal court. From an intellectual property standpoint, the game has birthed an interactive and complex relationship between mobile game developers and the entanglement of cyberspace and real world property. The developers have successfully created an opening into augmented reality that forces the video game industry to strive for a similar, yet uniquely creative and competitive concept.


Niantic, Inc., a software development company headquartered in San Francisco, California, was formed back in 2002 under the name Niantic Labs, which was originally an internal startup company at Google, Inc[2]. However, it became its own independent entity back in October 2015[3]. As of today, Niantic is the developer and publisher of the hottest mobile game to come to the smartphone market, Pokémon Go. Niantic also receives a percentage of all revenues generated by the game.


The Pokémon Company, known for its marketing and licensing of the Pokémon franchise, is a joint venture by Nintendo and the two copyright holders to the franchise, GameFreak and Creatures, is headquartered in Tokyo, Japan[4].


Nintendo Co., Ltd., a multinational consumer and electronics software company, headquartered in Kyoto, Japan, was originally founded in 1889 as a playing card company, but found success in the 1970's when it entered into the video game industry[5]. Today, it is the world's largest video game company[6]. It is best known for its creative role behind the Pokémon video game series and its numerous characters such as The Mario Brothers. Nintendo receives a percentage of all revenues generated by the game[7] and holds a 32% ownership stake in Pokémon Company[8].


While the success of the game immediately took off, the number of complaints and legal actions grew as well. There are currently three pending class action suits filed in federal court, pursuant to the Class Action Fairness Act of 2005. On Feb. 18, 2005, Congress enacted the Class Action Fairness Act (CAFA), codified under 28 U.S.C. §1332(d). The result of its enactment was the expansion of federal diversity jurisdiction over most class actions[9]. Under the Act, a class action is defined as "any civil action filed under Rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action"[10]. The most notable feature of CAFTA is its expansion of the federal courts' discretion to exercise diversity jurisdiction over class actions[11]. Specifically, it increased the "amount in controversy" requirement from $75,000 to $5 million, but allowed that $5 million to represent the aggregate sum of each individual plaintiff's claims[12]. To qualify as a class action under CAFA, first, the amount in controversy must exceed the sum or value of $5 million, exclusive of interests and costs[13]. Second, the diversity requirement has been relaxed to now allow jurisdiction where at least one plaintiff is diverse from at least one defendant[14]. Since the game's initial launch on July 6, 2016, and the publication of my first article, there have been three class actions that have been filed in federal court in California, to which I will now address.

Jeffrey Marder v. Niantic, Inc., The Pokémon Company, and Nintendo Co. Ltd.

The leading class action case comes out of New Jersey. On July 29, 2016, Jeffrey Marder, a personal injury attorney, filed the very first class action lawsuit against Niantic, Inc., The Pokémon Company, and Nintendo Co. Ltd. ("Defendants") in the United States District Court, Northern District of California on two counts: (1) Nuisance[15] and (2) Unjust Enrichment[16].  It is also worth noting that Mr. Marder is seeking relief exceeding $5 million[17] pursuant to CAFTA's diversity requirement.


The Plaintiffs have first brought a claim of nuisance against Niantic, Inc. Under common law, nuisance is defined as the intentional invasion of another's use and enjoyment of their land on a repeated basis or long-term duration. Plaintiffs first argue that Niantic's intentional placement of Pokéstops and Poke-Gyms by using GPS coordinates on or near the properties was done without permission[18]. As a result, such placement has encouraged an increasing number of players to come onto Plaintiff's properties, restricting their use and enjoyment of it. Specifically, there have been kids knocking on doors trying to catch Pokémon on the property[19]. Indeed, Niantic has continued to designate GPS coordinates on or near the properties of Mr. Marder and other members of the proposed Class, as poke-stops and poke-gyms, without any recourse[20].


Plaintiffs also allege unjust enrichment against all the Defendants. Unjust enrichment is defined as the receipt of some benefit at the expense of another party, which results in an imbalance or unfairness. The argument is that as a result of the specific designation of GPS coordinates on or near these properties, the Defendants have created a "more immersive gaming experience", which has increased the game's popularity and revenue[21]. As mentioned earlier, the Defendants receive a percentage of all revenues generated by the game. This confers a huge benefit upon the Defendants, while leaving Plaintiffs with a headache of complaints. In addition to a jury demand[22], the Class is seeking the following forms of relief[23]:


  • Damages, Disgorgement, or other monetary/ equitable relief available
  • Enjoinment of Defendant's placement of GPS coordinates on or near these properties
  • Pre-Judgment and Post-Judgment interests
  • Reasonably Attorneys' Fees, Cost of Suit, including expert witness fees; and
  • Any other form of relief the Court may deem proper.


Currently, the case has been given class action status and the Management Scheduling Order Conference will take place on Dec. 8, 2016 at 1:30pm, with a Statement due by Dec. 1, 2016[24].

Scott Dodich and Jayme Gotts-Dodich v. Niantic, Inc., The Pokémon Company, and Nintendo Co. Ltd.

The second class action lawsuit comes out of Michigan. Scott Dodich and Jayme Gotts-Dodich ("Plaintiffs"), filed their class action lawsuit on Aug. 10, 2016[25]. Plaintiffs live in St. Clair Shores, Michigan, on a private cul-de-sac across from Wahby Park ("Park")[26]. Shortly after the game's release in July, the numbers of visitors to the Park increased significantly[27]. Despite the posted signs indicating the street was private property, players continued to trespass on Plaintiffs' lawns, trampling their landscape, and peering into their windows. At one point, Plaintiffs asked a player to leave, to which they were told, "shut up bitch, or else"[28]. Plaintiffs repeatedly requested through the Defendant's website that it remove the GPS coordinates placed near their home, to which they were given an automatic reply saying "thank you for reporting this Pokéstop/Gym. We will review and take appropriate action. You'll receive a follow-up email once your request has been reviewed[29]." The Plaintiffs have yet to receive a response from the Defendants[30].


Similar to Marder's class action, the Plaintiffs also alleged two counts of nuisance and unjust enrichment in their Complaint for the same reasoning. Defendants have continuously designated specific GPS coordinates on or near Plaintiff's property without permission and have continued to reap the benefits of increased traffic and popularity, which continues to generate increased revenue for it.  The Plaintiffs have sought the same relief as that sought in the Marder case.

The Villas of Positano Condominium Association, Inc. v. Niantic, Inc., The Pokémon Company, and Nintendo Co., Ltd.

The most recent member class-action case comes out of Hollywood, Florida. The Villas of Positano Condominium Association, Inc. ("Plaintiffs") is an oceanfront condominium complex, comprised of 62 residences, located near the Hollywood Beach Boardwalk[31]. The owners of the condominiums are all members of the Condominium Association, which governs the policies of the Villas and is responsible for its maintenance[32]. Shortly after the release of the game, residents became aware of hundreds of non-residents coming onto this private property at odd hours in the morning and evenings[33]. Defendant Niantic, Inc. designated the Villas as a Pokéstop labeled the "Greek Architect" because of the Villas' Mediterranean-influenced aesthetic[34]. Additionally, Niantic programmed the game to spawn certain rare Pokémon at the wee hours of the morning, which thereby resulted in increased traffic of non-residents on the property[35]. People would show up at early hours in the morning, park illegally, block driveways, and interacting at very high volumes that would prevent residents from getting to sleep at night[36]. The condition of the property also decreased as garbage was left out on the property and as a result of no public bathroom facilities, a few residents discovered non-residents using the property as their own private toilet late at night[37].


The Plaintiffs also contacted Niantic through its website, reporting it be removed as a Pokéstop in the game as a result of the trespassing of non-residents, the deteriorating conditions of the landscaping, and the inability to enjoy their property throughout the day and night[38].  As no surprise, this came with no success, just another automatic reply saying it would be looked into, yet, and it is still designated as a Pokéstop in the game[39]. Consequently, the Plaintiffs have hired off-duty police officers to patrol the property into early hours in the morning[40]. The Plaintiffs have also brought claims of nuisance and unjust enrichment against Niantic and all the Defendants, respectively.

 

Indeed, while these three lawsuits may differ in its particular facts, the result is the same as is the Defendants response. While these cases are still pending, how the Defendants respond to the Complaint and to the lawsuits themselves, will hopefully set a precedent moving forward in how the Courts address augmented reality and virtual reality. The poke-balls are in the Courts hands now.

 

This article in no way is intended to favor one party over another, but is an attempt to breakdown the pending lawsuits in federal court to show and emphasize the concerns Pokémon Go has created and continues to create until proper legal action is set forth to help address the concerns, while allowing the game to remain successful for its future evolution.


Endnotes

[1] https://www.ohiobar.org/NewsAndPublications/News/OSBANews/Pages/Gotta-catch-a-lawsuit-A-legal-insight-into-the-battlefield-Pokemon-Go-has-downloaded-onto-smartphones-and-properties.aspx

[2] Jeffrey Marder, Individually and on Behalf of All Others Similarly Situated, v. Niantic, Inc., The Pokémon Company, and Nintendo Co. Ltd., Case No. 4:16-cv-04300, Compl. ¶ 6-8.

[3] Compl. ¶ 7-8.

[4] Compl. ¶ 13.

[5] Compl. ¶ 19-20.

[6] Compl. ¶ 20-21.

[7] Compl. ¶ 23-24.

[8] Compl. ¶ 23.

[9] 28 U.S.C. §1332(d)

[10] 28 U.S.C. §1332(d)(1)(B); 28 U.S.C. §1711(2)

[11] Class Action Fairness Act of 2005 (CAFA): Overview, Practical Law Litigation with David J. Lender, Jared R. Friedmann and Jodi Barrow, Weil, Gotshal & Manges LLP and Jason B. Bonl, Kleinberg, Kaplan, Wolff & Cohen, P.C., 2013.

[12] 28 U.S.C. §1332(d)(2)/(6); see CAFA Overview.

[13] Id.

[14] Id.

[15] Compl. ¶ 18 at page 13.

[16] Compl. ¶ 18 at page 14.

[17] Compl. ¶ 21 at page 4.

[18] Compl. ¶ 1-6 at page 14.

[19] "The Hero Who's Taking Pokémon Go Fools to Court," David K. Li and Priscilla DeGregory, http://nypost.com/2016/08/02/the-hero-whos-taking-pokemon-go-fools-to-court/

[20] Compl. ¶ 11-13, at page 14.

[21] Compl. ¶ 26-28, at page 14; ¶ 1-2, at page 15.

[22] Compl. ¶ 2, at page 16.

[23] Compl. ¶ 11-24, at page 15

[24] Civil Docket for Case No. 3:16-cv-04300-JD; https://ecf.cand.uscourts.gov/cgi-bin/DKTRpt.pl?961356296072489-L_1_0-1

[25] Class Action Complaint, Scott Dodich and Jayme Gotts-Dodich, Individually and on Behalf of All Others Similarly Situated, v. Niantic, Inc., The Pokémon Company, and Nintendo Co., Ltd., Case No. 3:16-cv-04556

[26] Compl. ¶ 15, 16, at page 6; ¶ 3-4 at page 9.

[27] Compl.  ¶ 6-8, at page 9.

[28] Compl. ¶ 24-25, at page 10.

[29] Compl. ¶ 25-28, at page 11; ¶ 1-2, at page 12.

[30] Compl. ¶ 2-5, at page 14.

[31] Compl. ¶ 21-22, at page 3.

[32] Compl. ¶ 11-12, at page 6.

[33] Compl. ¶ 11-16, at page 10.

[34] Compl. ¶ 17-19, at page 9.

[35] Id.

[36] Id.

[37] Id.

[38] Compl. ¶ 12-20, at page 10.

[39] Compl. ¶ 24-25, at page 10.

[40] Compl. ¶26-28, at page 10; ¶ 1-2, at page 11.




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