Epic Games Data Breach Suit Sent to Arbitration

Epic Games, developer of the mega-popular video game Fortnite, has won a motion to compel arbitration in a case arising from a data breach. The judge ruled in favor of Epic after dismissing arguments that the plaintiff did not agree to the End User License Agreement that contained the arbitration clause, that the breach is out of the scope of the arbitration agreement, and that the agreement was unconscionable and thus unenforceable. The case is being heard in the Eastern District of North Carolina before Chief Judge Terrence Boyle.

The underlying class action complaint alleged that Epic negligently allowed for the exposure of their personally identifying information. The plaintiff, a parent of a minor who played Fortnite, alleged that fraudulent in-game purchases were made using their debit card between November 2018 and January 2019, when Epic disclosed the breach to the public. The complaint sought class certification for “All persons who registered for Epic Games accounts in the United States and whose PII was accessed, compromised, or stolen from Epic Games in the Data Breach …”

The judge rejected the argument that plaintiff Michael Heidbreder did not agree to the End User License Agreement himself because the plaintiff’s minor child was acting with actual and apparent authority as his agent in accepting the terms. The court declined to entertain questions as to the scope of the agreement, stating that those questions are subject to the agreement itself and thus must be resolved in arbitration. Finally, Chief Judge Boyle held that the plaintiffs did not sufficiently meet the standards to prove that the contract is unconscionable and thus unenforceable, adding that “plaintiff greatly exaggerates the lack of notice and choice users were given with respect to the arbitration provision at issue here….plaintiff could have exercised this opt-out right or, simply, stopped playing the game if he objected to arbitration.”

The ruling highlights the effect of arbitration agreements placed in terms of service, a common tool used to resolve disputes outside of court. The arbitration agreement, in this case, requires the plaintiff to arbitrate his claims individually, thus removing the possibility of a class action for now.

Epic Games is represented by attorneys from Williams Mullen and Drinker Biddle & Reath. Heidbreder is represented by attorneys from Franklin D. Azar and Cohen Milstein Sellers & Toll.