Case 2:12-cv JCC Document 1 Filed 06/29/12 Page 1 of 15 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE NO.

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1 Case :-cv-0-jcc Document Filed 0// Page of 0 ANN TALYANCICH, individually and on behalf of all others similarly situated, Plaintiff, v. MICROSOFT CORPORATION, a Washington corporation, Defendant. UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE NO. Plaintiff Ann Talyancich, by her attorneys, makes the following allegations and claims for her complaint against Defendant Microsoft Corporation. This class action is brought by Plaintiff individually and on behalf of all others similarly situated who have had their Xbox console units excluded from the Xbox LIVE service by Defendant. The following allegations are made upon information and belief, except as to allegations specifically pertaining to Plaintiff, which are made upon knowledge. Plaintiff s information and belief is based, inter alia, on the investigation made by and through counsel. PARTIES. Plaintiff Ann Talyancich is a citizen of the State of California.. Defendant Microsoft Corporation is a Washington corporation with its principal place of business in Washington. A global provider of software and other computer products and services, Defendant does business throughout the United States of America. PAGE () -0

2 Case :-cv-0-jcc Document Filed 0// Page of 0 JURISDICTION AND VENUE. This Court has jurisdiction over the parties to and the subject matter of all causes of action asserted herein, pursuant to U.S.C. and under the Class Action Fairness Act.. Venue is proper in this Court because Defendant s headquarters is located in this District, and Defendant conducts substantial business in this District. STATEMENT OF FACTS. Defendant is the manufacturer and distributer of the Xbox 0 console and its predecessor, the Xbox console (collectively referred to herein as Xbox ).. The Xbox is a general purpose computer that is commonly used to access the Internet, play video games, and access and display movies.. Xbox console units currently sell from approximately $. for the Xbox 0 GB Console up to approximately $. for the Xbox 0 Limited Edition Kinect Star Wars Bundle.. To date, in excess of million Xbox console units have been sold since its release in 0.. Included with the purchase of an Xbox console unit is access to the Xbox LIVE service (Internet connection required). 0. Xbox LIVE is an online multiplayer gaming and digital media delivery service.. The Xbox LIVE service is currently available in three variations: Free (formerly known as Silver), Gold, and Family Pack (or Gold Family Pack).. The Xbox LIVE Free service includes the ability to chat and text with friends on Xbox LIVE, industry-leading, built-in Family Settings, the ability to create and customize your Avatar, the ability to download new games and game add-ons, the ability to watch HD movies and TV from Zune, and the ability to preview games with free demos. PAGE () -0

3 Case :-cv-0-jcc Document Filed 0// Page of 0. In addition to those benefits included with the Xbox LIVE Free service, the Xbox LIVE Gold service includes the ability to play Xbox 0 games online with friends, the ability to instantly watch HD movies from Netflix, the ability to instantly watch last night s TV today with Hulu Plus, the ability to view live sports from ESPN on Xbox LIVE, the ability to use Facebook and Twitter on your TV, and the ability to listen to personalized music from Zune and last.fm.. A one-month membership to Xbox LIVE Gold sells for approximately $., a three-month membership for approximately $., and a twelve-month membership for approximately $... In addition to those benefits included with the Xbox LIVE Gold service, the Xbox LIVE Family Pack service includes four Xbox LIVE Gold memberships for less than the price of two, the ability to manage your family s memberships and settings in the Family Center, the ability to view reports on your family s Xbox LIVE activities, the ability to gift Microsoft Points Allowances to your family, and exclusive discounts on family friendly games.. A twelve month membership to Xbox LIVE Family Pack sells for approximately $... There are currently approximately to million Xbox LIVE members.. Also available for purchase and use with the Xbox LIVE service are Microsoft Points (also known as Xbox LIVE Points and Xbox Points). Microsoft Points are the coin of the Xbox LIVE Marketplace realm and may be purchased directly from the Xbox LIVE Marketplace with a credit card or from brick and mortar retail locations.. 00 Microsoft Points may be purchased for approximately $.; 00 Microsoft Points may be purchased for approximately $.; 00 Microsoft Points may be purchased for approximately $.; 000 Microsoft Points may be purchased for PAGE () -0

4 Case :-cv-0-jcc Document Filed 0// Page of 0 approximately $.; and 000 Microsoft Points may be purchased for approximately $... Microsoft Points are a stored value system that may be used to buy games, add-ons, videos, TV shows, and more in the Xbox LIVE Marketplace.. The Entertainment and Devices Division of Defendant, which includes the Xbox 0 entertainment platform (along with Mediaroom and Windows Phone), had revenue for the twelve months ending June 0,, of $. billion with an operating income of $. billion.. Defendant regularly excludes Xbox console units from the Xbox LIVE service.. Xbox console units display the following message after being excluded from the Xbox LIVE service: This console has been banned for violations of the Terms of Use. To protect the Xbox LIVE service and its members, Microsoft does not provide details about console bans. There is no recourse for Terms of Use violations.. Defendant does not issue refunds or credits for time remaining on Xbox LIVE memberships associated with excluded Xbox console units.. Defendant does not issue refunds or credits for Microsoft Points associated with excluded Xbox console units.. Defendant does not issue refunds or credits for items purchased with Microsoft Points associated with excluded Xbox console units.. Plaintiff Ann Talyancich is the owner of an Xbox console unit ( Talyancich Unit ).. The Talyancich Unit was purchased new.. The Talyancich Unit s DVD drive subsequently failed and Plaintiff Ann Talyancich hired an independent local repairman to repair the unit by installing a new DVD drive. PAGE () -0

5 Case :-cv-0-jcc Document Filed 0// Page of 0 0. In approximately April, Plaintiff Ann Talyancich purchased a twelvemonth subscription to Xbox LIVE Gold that included one bonus month.. In approximately May, Defendant installed a software update on the Talyancich Unit.. After installation of the May update, and as a result of the May update, the Talyancich Unit was excluded from and unable to access the Xbox LIVE service.. Defendant has installed software on the Xbox console units of Plaintiff and members of the Class that has damaged the Xbox console units of Plaintiff and members of the Class by excluding the Xbox console units of Plaintiff and members of the Class from the Xbox LIVE service.. The exclusion of the Talyancich Unit from the Xbox LIVE service by Defendant was in reprisal for the DVD drive repair that was performed by someone other than Defendant.. Since Defendant excluded the Talyancich Unit from the Xbox LIVE service, the Talyancich Unit has been unable to access the Xbox LIVE Free service and the benefits included with that service.. Plaintiff Ann Talyancich had approximately months remaining on her Xbox LIVE Gold subscription when her Xbox console unit was excluded from the Xbox LIVE service.. Since Defendant excluded the Talyancich Unit from the Xbox LIVE service, the Talyancich Unit has been unable to access the Xbox LIVE Gold service and the benefits included with that service.. Defendant issued no refund or credit to Plaintiff Ann Talyancich for the time remaining on her Xbox LIVE Gold subscription.. Plaintiff Ann Talyancich purchased Microsoft Points for use with the Xbox LIVE Marketplace. PAGE () -0

6 Case :-cv-0-jcc Document Filed 0// Page of 0 0. Since Defendant excluded the Talyancich Unit from the Xbox LIVE service, the Talyancich Unit has been unable to access and use the Microsoft Points Plaintiff Ann Talyancich purchased for use with the Xbox LIVE Marketplace.. Since Defendant excluded the Talyancich Unit from the Xbox LIVE service, the Talyancich Unit has been unable to access and use the items purchased by Plaintiff Ann Talyancich from the Xbox LIVE Marketplace with Microsoft Points.. Defendant issued no refund or credit to Plaintiff Ann Talyancich for the remaining unused Microsoft Points she purchased for use with the Talyancich Unit in the Xbox LIVE Marketplace.. Defendant issued no refund or credit to Plaintiff Ann Talyancich for the items she purchased from the Xbox LIVE Marketplace for use with the Talyancich Unit. CLASS ACTION ALLEGATIONS. Plaintiff brings this action as a nationwide class on behalf of herself and a Class (the Class ) defined as follows: all persons in the United States of America and its Territories whose Xbox consoles have been excluded from the Xbox LIVE service.. Numerosity. Defendant has unlawfully excluded hundreds of thousands of Xbox console units from the Xbox LIVE service. As such, the Class consists of hundreds of thousands of individuals and other entities, making joinder impractical. In addition, the disposition of the Class members claims in a single action will provide substantial benefits to the parties and the Court.. Commonality. Defendant has acted and failed to act on grounds generally applicable to the Plaintiff and the other members of the Class by unlawfully excluding hundreds of thousands of Xbox console units from the Xbox LIVE service, requiring the Court s imposition of uniform relief to ensure compatible standards of conduct toward the members of the Class. PAGE () -0

7 Case :-cv-0-jcc Document Filed 0// Page of. There are many questions of law and fact common to the claims of Plaintiff and the other members of the Class, and those questions predominate over any questions that may affect individual members of the Class. Common questions for the Class include, but are not limited to, the following: 0 (a) (b) (c) (d) (e) (f) Has Defendant breached contracts with the Class members? Has Defendant been unjustly enriched at the expense of the Class members? Is Defendant subject to liability in restitution? Has Defendant intentionally and without justification interfered with the personal property of Plaintiff and members of the Class, thereby depriving Plaintiff and members of the Class of the possession and use of their personal property? Are the Class members entitled to treble damages based on the willfulness of Defendant s conduct? Are the Class members entitled to injunctive relief?. Typicality. The factual and legal bases of Defendant s liability to Plaintiff and to the other members of the Class are the same, resulting in injury to the Plaintiff and to all of the other members of the Class as a result of Defendant s conduct of unlawfully excluding hundreds of thousands of Xbox console units from the Xbox LIVE service. Plaintiff and the other Class members have all suffered harm and damages as a result of Defendant s unlawful and wrongful conduct as a result of unlawfully excluding hundreds of thousands of Xbox console units from the Xbox LIVE service.. Adequacy of Representation. Plaintiff will fairly and adequately represent and protect the interests of the other members of the Class. Plaintiff has retained counsel with substantial experience in prosecuting complex litigation and class actions. Plaintiff and her counsel are committed to vigorously prosecuting this action on behalf of the members of the PAGE () -0

8 Case :-cv-0-jcc Document Filed 0// Page of 0 Class, and have the financial resources to do so. Neither Plaintiff nor her counsel has any interest adverse to those of the other members of the Class. 0. Absent a class action, most members of the Class would find the cost of litigating their claims to be prohibitive, and will have no effective remedy. Class treatment of common questions of law and fact is also superior to multiple individual actions or piecemeal litigation in that it conserves the resources of the courts and the litigants, and promotes consistency and efficiency of adjudication. FIRST CAUSE OF ACTION Breach of Contract Xbox Console Units. Plaintiff incorporates by reference the foregoing allegations contained in paragraphs through as if fully set forth herein.. Plaintiff and members of the Class purchased their Xbox console units from Defendant (or Defendant s distributors, as the case may be).. Included with the sale of each Xbox console unit to Plaintiff and members of the Class was access to and use of the Free Xbox LIVE service (and the benefits included therewith).. Defendant excluded the Xbox console units of Plaintiff and members of the Class from the Free Xbox LIVE service (and the benefits included therewith) thereby breaching the Xbox console unit sale contracts between Defendant and Plaintiff and members of the Class.. Plaintiff and members of the Class have been damaged by Defendant s breach. SECOND CAUSE OF ACTION Breach of Contract Paid Xbox LIVE. Plaintiff incorporates by reference the foregoing allegations contained in paragraphs through as if fully set forth herein.. Plaintiff and members of the Class purchased access to and use of the Paid Xbox LIVE service (Xbox LIVE Gold service and/or Xbox LIVE Family Pack service) from PAGE () -0

9 Case :-cv-0-jcc Document Filed 0// Page of 0 Defendant (or Defendant s distributors, as the case may be) for use with their Xbox console units.. Defendant excluded the Xbox console units of Plaintiff and members of the Class from the Paid Xbox LIVE service, thereby preventing Plaintiff and the Class members from accessing and using the purchased Paid Xbox LIVE service (and the benefits included therewith) with their Xbox console units and thereby breaching the Paid Xbox LIVE service sale contracts between Defendant and Plaintiff and members of the Class.. Plaintiff and members of the Class have been damaged by Defendant s breach. THIRD CAUSE OF ACTION Breach of Contract Microsoft Points 0. Plaintiff incorporates by reference the foregoing allegations contained in paragraphs through 0 as if fully set forth herein.. Plaintiff and members of the Class purchased Microsoft Points from Defendant (or Defendant s distributors, as the case may be) for use with their Xbox console units.. Defendant excluded the Xbox console units of Plaintiff and members of the Class from the Xbox LIVE service, thereby preventing Plaintiff and the Class members from using the purchased Microsoft Points with their Xbox console units and thereby breaching the Microsoft Points sale contracts between Defendant and Plaintiff and members of the Class.. Plaintiff and members of the Class have been damaged by Defendant s breach. FOURTH CAUSE OF ACTION Unjust Enrichment, Restitution and/or Money Had and Received Xbox Console Units. Plaintiff incorporates by reference the foregoing allegations contained in paragraphs through as if fully set forth herein.. Plaintiff and members of the Class purchased their Xbox console units from Defendant (or Defendant s distributors, as the case may be). PAGE () -0

10 Case :-cv-0-jcc Document Filed 0// Page 0 of 0. Included with the sale of each Xbox console unit to Plaintiff and members of the Class was access to and use of the Free Xbox LIVE service and the benefits included with that service.. Defendant excluded the Xbox console units of Plaintiff and members of the Class from the Free Xbox LIVE service and the benefits included with that service.. As a result of Defendant s actions, Plaintiff and members of the Class have been unable to access and use the Free Xbox LIVE service (and the benefits included therewith) purchased with each Xbox console unit.. Defendant received money from Plaintiff and members of the Class in exchange for access to and use of the Free Xbox LIVE service (and the benefits included therewith) with each Xbox console unit and retained this money after excluding the Xbox console units of Plaintiff and members of the Class from the Free Xbox LIVE service. 0. Plaintiff and members of the Class have conferred a benefit to Defendant via the purchase of their Xbox console units from Defendant.. The benefit conferred to Defendant was at the expense of Plaintiff and members of the Class and Defendant has an appreciation or knowledge of the conferred benefit.. Because Defendant excluded the Xbox console units of Plaintiff and members of the Class from the Free Xbox LIVE service (and the benefits included therewith) it is unjust for Defendant to retain the benefit conferred to it by Plaintiff and members of the Class without payment or restitution from Defendant to Plaintiff and members of the Class.. Defendant has been unjustly enriched by excluding the Xbox console units of Plaintiff and members of the Class from the Free Xbox LIVE service (and the benefits included therewith) and Plaintiff and members of the Class are entitled to restitution. PAGE 0 () -0

11 Case :-cv-0-jcc Document Filed 0// Page of 0 FIFTH CAUSE OF ACTION Unjust Enrichment, Restitution and/or Money Had and Received Paid Xbox LIVE. Plaintiff incorporates by reference the foregoing allegations contained in paragraphs through as if fully set forth herein.. Plaintiff and members of the Class purchased their Xbox console units from Defendant (or Defendant s distributors, as the case may be).. Plaintiff and members of the Class purchased access to and use of the Paid Xbox LIVE service (Xbox LIVE Gold service and/or Xbox LIVE Family Pack service) from Defendant (or Defendant s distributors as the case may be) for use with their Xbox console units.. Defendant excluded the Xbox console units of Plaintiff and members of the Class from the Paid Xbox LIVE service and the benefits included with that service.. As a result of Defendant s actions, Plaintiff and members of the Class have been unable to access and use the Paid Xbox LIVE service (and the benefits included therewith) that they purchased.. Defendant received money from Plaintiff and members of the Class in exchange for access to and use of the Paid Xbox LIVE service (and the benefits included therewith) and retained this money after excluding the Xbox console units of Plaintiff and members of the Class from the Paid Xbox LIVE service. 0. Plaintiff and members of the Class have conferred a benefit to Defendant via the purchase of their Paid Xbox LIVE service from Defendant.. The benefit conferred to Defendant was at the expense of Plaintiff and members of the Class and Defendant has an appreciation or knowledge of the conferred benefit.. Because Defendant excluded the Xbox console units of Plaintiff and members of the Class from the Paid Xbox LIVE service (and the benefits included therewith) it is PAGE () -0

12 Case :-cv-0-jcc Document Filed 0// Page of 0 unjust for Defendant to retain the benefit conferred to it by Plaintiff and members of the Class without payment or restitution from Defendant to Plaintiff and members of the Class.. Defendant has been unjustly enriched by excluding the Xbox console units of Plaintiff and members of the Class from the Paid Xbox LIVE service (and the benefits included therewith) and Plaintiff and members of the Class are entitled to restitution. SIXTH CAUSE OF ACTION Unjust Enrichment, Restitution and/or Money Had and Received Microsoft Points. Plaintiff incorporates by reference the foregoing allegations contained in paragraphs through as if fully set forth herein.. Plaintiff and members of the Class purchased their Xbox console units from Defendant (or Defendant s distributors as the case may be).. Plaintiff and members of the Class purchased Microsoft Points from Defendant (or Defendant s distributors as the case may be) for use with their Xbox console units.. Defendant excluded the Xbox console units of Plaintiff and members of the Class from the Xbox LIVE service, thereby preventing Plaintiff and the Class members from using the purchased Microsoft Points with their Xbox console units.. As a result of Defendant s actions, Plaintiff and members of the Class have been unable to access and use their Microsoft Points.. Defendant received money from Plaintiff and members of the Class in exchange for the Microsoft Points and retained this money after excluding the Xbox console units of Plaintiff and members of the Class from the Xbox LIVE service. 0. Plaintiff and members of the Class have conferred a benefit to Defendant via the purchase of their Microsoft Points from Defendant.. The benefit conferred to Defendant was at the expense of Plaintiff and members of the Class and Defendant has an appreciation or knowledge of the conferred benefit. PAGE () -0

13 Case :-cv-0-jcc Document Filed 0// Page of 0. Because Defendant excluded the Xbox console units of Plaintiff and members of the Class from the Xbox LIVE service, thereby preventing Plaintiff and the Class members from using the purchased Microsoft Points with their Xbox console units, it is unjust for Defendant to retain the benefit conferred on it by Plaintiff and members of the Class without payment or restitution from Defendant to Plaintiff and members of the Class.. Defendant has been unjustly enriched by excluding the Xbox console units of Plaintiff and members of the Class from the Xbox LIVE service, thereby preventing Plaintiff and the Class members from using the purchased Microsoft Points with their Xbox console units and Plaintiff and members of the Class are entitled to restitution. SEVENTH CAUSE OF ACTION Trespass to Chattels. Plaintiff incorporates by reference the foregoing allegations contained in paragraphs through as if fully set forth herein.. The Xbox console units of Plaintiff and members of the Class are the personal property of Plaintiff and members of the Class.. Defendant intentionally and without justification interfered with the Xbox console units of Plaintiff and members of the Class by installing software on the Xbox console units of Plaintiff and members of the Class resulting in the exclusion of the Xbox console units of Plaintiff and members of the Class from accessing and using the Free Xbox LIVE service (and the benefits included therewith), from accessing and using the Paid Xbox LIVE service (and the benefits included therewith), and from accessing and using Microsoft Points, thereby depriving Plaintiff and members of the Class of the possession and use of their Xbox console units.. Defendant intentionally and without justification excluded Xbox console units of Plaintiff and members of the Class from accessing and using the Free Xbox LIVE service (and the benefits included therewith), from accessing and using the Paid Xbox LIVE service (and the benefits included therewith), and from accessing and using Microsoft Points, thereby PAGE () -0

14 Case :-cv-0-jcc Document Filed 0// Page of 0 depriving Plaintiff and members of the Class of the possession and use of their Xbox console units.. Defendant intentionally and without justification interfered with the Xbox console units of Plaintiff and members of the Class thereby depriving Plaintiff and members of the Class of the possession and use of their Xbox console units.. Plaintiff and members of the Class have been damaged by the actions of Defendant. PRAYER FOR RELIEF WHEREFORE, Plaintiff Ann Talyancich, on behalf of herself and the Class, prays for the following relief: A. An order certifying this case as a class action on behalf of the Class defined above, appointing Ann Talyancich as class representative, and appointing her counsel as class counsel; B. An award of actual damages; C. An award of restitution; D. An award of punitive damages where appropriate; E. An injunction requiring Defendant to cease excluding Xbox console units from accessing the Xbox LIVE service; F. An award of reasonable attorneys fees and costs; G. An award of pre- and post-judgment interest, to the extent allowable; and H. Such further and other relief the Court deems equitable and just. //// //// //// //// //// PAGE () -0

15 Case :-cv-0-jcc Document Filed 0// Page of 0 JURY DEMAND Plaintiff requests trial by jury of all claims, pursuant to LR (b). DATED this th day of June,. SKELLENGER BENDER, P.S. s/ Jeffrey C. Grant Jeffrey C. Grant, WSBA No. 0 jgrant@skellengerbender.com Attorneys for Ann Talyancich and the Putative Class William B. Federman Oklahoma Bar No. FEDERMAN & SHERWOOD 0 N. Pennsylvania Avenue Oklahoma City, Oklahoma (0) -0 (telephone) (0) - (facsimile) wbf@federmanlaw.com Cornelius P. Dukelow Oklahoma Bar No. 0 ABINGTON COLE South Boston Avenue, Suite 0 Tulsa, Oklahoma (telephone & facsimile) cdukelow@abingtonlaw.com PAGE () -0