Judge Rejects Forced Arbitration for Video Game Addiction Lawsuits

Ruling forces major game developers to face video game addiction lawsuit alleging their products were designed to encourage compulsive play in court.

Microsoft, Roblox and Epic Games cannot require a Pennsylvania family to resolve a video game addiction lawsuit through arbitration, after a federal judge found that state law allows minors to reject contracts entered into while they were children.

The lawsuit was filed by Dany Mercado on behalf of a Pennsylvania teenager identified as S.S.M., who is now 16 and allegedly began playing Roblox, Fortnite and Minecraft when he was about 7 years old.

According to the complaint (PDF), his family claims features built into those games encouraged excessive and compulsive play, eventually contributing to serious mental health problems.

Video Game Addiction Risks

Video game addiction, sometimes referred to as internet gaming disorder, involves excessive or uncontrolled gaming that begins to interfere with school, relationships, family life or other everyday activities.

Those struggling with problematic gaming may have difficulty cutting back, become increasingly focused on playing, lose interest in other activities or continue gaming even when it is causing problems in their lives. Excessive gaming has also been associated with poor school performance, social isolation, strained relationships and emotional difficulties.

Concerns about these risks have led families across the country to file video game addiction lawsuits against major game developers.

The lawsuits allege popular games like Fortnite, Roblox and Minecraft use reward systems, repeated challenges and other features designed to keep children and teenagers playing for longer periods of time and spending more money in the games, without adequately warning families about the potential risks of compulsive use.

Video Game Addiction Lawsuit Arbitration

In the case of S.S.M., the three defendants filed motions in the U.S. District Court for the Eastern District of Pennsylvania seeking to enforce arbitration clauses contained in the games’ terms of use. Arbitration is an independent process for resolving disputes and determining liability and damages outside the court system. Critics argue the process can unfairly favor powerful corporations.

The game developers argued that the court should ignore Pennsylvania laws that declare minors are not competent to contract under the law in order to protect them from exploitation. Instead, the companies said the court should force S.S.M. into arbitration whether he understood that contract or not, as well as Mercado, the boy’s mother, who never saw nor read the contract her son needed to sign to be able to play the games. The arbitration clause was in Terms of Use and End User License Agreements (EULA).

In September 25 rulings issued to Epic (PDF), Microsoft (PDF) and Roblox (PDF), U.S. District Judge Mia Roberts Perez denied the defendants’ motion, saying that while the arbitration clause was appropriately placed and clear, a minor under Pennsylvania law can later disaffirm they were competent to sign a contract, which nullifies the ability to enforce that contract.

The judge noted that it did not matter whether the arbitration clause was unconscionable or whether S.S.M. was competent when he agreed to the contracts. Those factors did not matter in the face of Pennsylvania law, she declared.

“The Court cannot resolve the dispute as to whether S.S.M. was sufficiently on notice of the EULA on this record. Nonetheless, even if S.S.M. was on notice of the EULA and its arbitration clause, they have disaffirmed the agreement and cannot be bound by any provision therein.”

– U.S. District Judge Mia Roberts Perez

The ruling represents an early procedural victory for the family, allowing the video game addiction claims to remain in federal court rather than being sent to private arbitration. However, Judge Perez did not rule on whether the companies are ultimately liable for S.S.M.’s alleged injuries.

The case can now move forward through the normal litigation process, including discovery and further challenges to the claims, as the family seeks to hold Microsoft, Roblox and Epic Games responsible for allegedly designing their games in ways that encouraged compulsive use by children.

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