Yesterday, May 8, 2019, Matt Wetherington, Esq., an attorney from the Atlanta, Georgia law firm “Werner Wetherington, P.C.” submitted a Reddit post on /r/MTGFINANCE detailing the firm’s recent class action filing against Wizards of the Coast and Hasbro. If you’ve ever seen my profile description when reading one of my deck write-ups, you’ll know that my full time job involves law practice. In this article I will attempt to provide an analysis of this potential class action lawsuit against the creators/owners of Magic the Gathering.
Throughout this article I will bold certain words such as “potential” and “alleged”. For purposes of this article, if something is potential, the meaning should be understood as something that has not yet happened, and is not certain to happen. Further, if something is alleged, the meaning should be understood to be argument not proven and only suggested.
It is important to note the above, as the subject Reddit posting was made by a firm that seeks to represent individuals in a potential lawsuit where, if successful, they would be paid from a percentage of monies received (either by Court determination or settlement).
2. RELEVANT FACTS IN THE POST
The prospective class members:
The firm's posting states that a “class action lawsuit” was filed by them against (1) Hasbro and (2) Wizards of the Coast. There, they defined the potential members of the class as:
1. United States citizens;
2. Who, “Placed an order for War of the Spark: Mythic Edition on eBay”;
3. Who, “Received a confirmation email from eBay”;
4. Who, “Had their order cancelled”; and
5. Who, “Have NOT authorized eBay to cancel the contract.”
The specific wording indicates that members of the class must meet all five of the aforementioned criteria.
The factual basis:
The firm then alleges that Hasbro/Wizards of the Coast breached a “legally binding contract” with potential class members (people that meet the five requirements above) by cancelling confirmed eBay purchase orders for “War of the Spark: Mythic Edition” (hereinafter, “Mythic Edition”). He proposes that the, “legally binding contract” is executed the moment a buyer “clicked the ‘Buy It Now’ button.”
The alleged damages:
The firm alleges that potential class members suffered monetary loss due to eBay order cancellations of “Mythic Edition”; the potential class members, as buyers, were unable to find a replacement Mythic Edition for the same price, as the “fair market value” of the item had increased due to product-scarcity. He submits that potential class members, “…are entitled to recover damages in an amount equal to the fair market value of their purchase.”
What may be construed as legal advice to potential class members:
The firm states, “It is our position that affected users currently have a binding contract for the sale of War of the Spark: Mythic Edition. If Hasbro and Wizards breach the contract, you may be entitled to monetary damages. If you consent to the cancellation, the contract will no longer be binding and you will not be entitled to participate in this lawsuit as a class member or otherwise be able to pursue damages in an individual action.”
The alleged Cause of Action is only for “Breach of Contract”:
The firm states, “No. This lawsuit is about a breach of contract claim only.” This means they are not suing under any theory of Fraud (including Consumer Fraud). Additionally, they are not seeking any form of declaratory or injunctive relief. They do not want specific performance of the alleged broken contract.
Potential class members are solicited:
Lastly, the post includes a solicitation of potential class members. It states, “If you are interested in joining the lawsuit as a class representative and meet all of the criteria above, please send my litigation team an email at [emails are removed].”
3. LEGAL ANALYSIS
Class actions, generally:
As the post is made on a public forum and solicits potential class members unrestrictive of geographic location, I assume the matter will proceed under federal jurisdiction. The potential action will have to exceed the jurisdictional amount of $75,000.00 in claimed damages.
Within federal jurisdiction, class action lawsuits are governed by Rule 23 of the Federal Rules of Civil Procedure. Subsection (a) sets forth the prerequisites for class actions:
(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.
Pursuant to FRCP Rule 23(c), a Class Action proceeds only after receiving class certification. In certifying a class action, the Court will appoint a class counsel. Class certification is not always provided, and if the class is not certified, the Court obviously does not appoint a class counsel.
The Rule also controls notice to potential class members. Per FRCP Rule 23(c)(2), “Notice” can be provided only to certified class, or upon an “ordering notice” under FRCP Rule 23(e)(1).
And, “The parties must provide the court with information sufficient to enable it to determine whether to give notice of the proposal to the class.” FRCP Rule 23(e)(1).
Breach of Contract requirements:
Generally, to be successful under a breach of contract theory, the following elements must be proved:
1. The formation of a contract between the plaintiff and the defendant;
2. Performance by the plaintiff;
3. Failure of performance by the defendant; and
4. Damages suffered by the plaintiff.
Ebay’s terms, conditions, and policies:
Let’s take a look at the alleged contract terms, which are located on eBay’s website.
Further, eBay’s policy on cancelled transactions allows for sellers to unilaterally cancel sales, “Tip: You can cancel a transaction up to 30 days after a sale, even if your buyer has already paid.” Additionally, “What happens after you cancel a transaction: If you're a managed payments seller, or if the buyer paid using PayPal, a full refund will be issued automatically. If the buyer used another payment method, they will be asked to confirm that they received their refund before the cancellation is complete. Once the buyer has been refunded, you'll receive a final value fee credit. If you'd like, you can learn more about how refunds work.
Now let’s look at Hasbro’s eBay store policies. Same is not specific as to cancellations by the seller, nor is there any reference to non-performance of sales. However, it does state, “The availability of any item we sell is subject to change. Hasbro is not responsible for shipping delays as a result of mechanical failure and/or weather.
All buyers agreed to the terms, conditions, and policies of eBay, which specifically permit cancellation of an item by the seller. While the buyer may be entitled to a refund of the money spent, damages of the type alleged in the Reddit post are flimsy, at best.
Furthermore, the firm specifically states that it is only proceeding under a breach of contract theory. This means claims involving consumer fraud are not being sought, which is probably because the factual basis here doesn’t lend itself to a viable consumer fraud claim.
Additionally, the Reddit post may have been premature. If the action was filed the same day as the post was made, then it is doubtful the class received either a certification or an “ordering notice”. It’s also unclear whether the firm that made the post has been appointed its class counsel, especially since the post contains legal advice for prospective class members.
Ultimately, the above is just my take on this matter and we’ll have to wait to see any (if any) developments.
Disclaimer: The information in this document is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in his post should be construed as legal advice from CaptainJamoke (“CaptainJamoke” being inclusive, but without reference, to CaptainJamoke’s legal name) or the individual author, or is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction. CaptainJamoke is not affiliated with any of the individuals, companies, parties, or people referenced in this article. This article is purely opinion, and should not be construed to have any legal effect, binding, persuasive, or otherwise.