A federal judge has said go to a putative class action by consumers accusing video game seller GameStop of misleading sales practices.
U.S. District Judge Robert Kugler in Camden refused to dismiss the suit, finding it sufficiently pleaded claims of unjust enrichment and violation of New Jersey's Consumer Fraud Act.
The plaintiffs in Farley v. GameStop, 12-cv-4734, claim the company fails to tell buyers of pre-owned games that they come without free downloadable extras available to those who buy the games new. The used games are sold in the original boxes, which prominently state that they come with the extra features.
But those extras — such as additional game characters, levels of play, maps, screens, weapons and scenarios — are accessed with a manufacturer's code that can only be used once, making it worthless to a subsequent purchaser.
Buyers of pre-owned games can buy the extras — a new access code — but that does not fix the problem. They have to shell out another $10 to $15, wiping out the $5 to $10 they saved by buying a used game, contrary to GameStop's assertions that they are saving money, according to the suit.
Secondhand buyers are also allegedly deprived of the opportunity for online play with multiple people in different locations.
GameStop's website, which sells new games alongside used ones, proclaimed that buying used "creates value for customers" and buyers of used games would get a receipt specifying the dollar amount saved, the complaint says.
The Fortune 500 company, headquartered in Grapevine, Texas, has more than 6,600 stores in 15 countries, with more than 100 locations in New Jersey, and revenues of nearly $9 billion for 2012.
The named plaintiffs are suing on behalf of buyers who bought pre-owned games from GameStop in New Jersey since June 12, 2006.
Plaintiffs John Farley, Jamar McGhee and Hakana Ozdincer contend that GameStop benefits from a higher profit margin on the sale of used games and that more than half of its overall profits are derived from selling used games.
Farley claims he bought a pre-owned copy of "Need for Speed: Hot Pursuit X" on Jan. 24, 2011, from a store in New Jersey and was handed a receipt stating he saved $12 by buying used. That statement was allegedly untrue because he was unable to play online with other gamers.
McGhee and Ozdincer claim they each paid $45 for a used version of "Madden 2010" and "FIFA Soccer 2010," respectively, and later spent another $15 for the downloadable extras. Thus, they paid more for used. The $60 total exceeded the $59.95 cost for a new game.
Kugler, in his ruling on Wednesday, found the plaintiffs made out a Consumer Fraud Act claim by alleging unlawful conduct in the form of a knowing omission; an ascertainable loss from the lost benefit of the bargain or the additional money spent for the extras; and a causal nexus between the alleged fraud and damages.
The unjust enrichment allegations were adequate because "they essentially charge Defendants with knowingly selling a defective product," he found.
Joseph Osefchen, of DeNittis Osefchen in Marlton, representing the plaintiffs, refers to them as "three guys in the ridiculous position of paying more for a used game than they would have paid for a new game in the package."
GameStop lawyer Jeffrey Greenbaum, of Sills Cummis & Gross in Newark, declines comment.
The company has faced one other suit over the issue, Collins v. GameStop, 10-cv-1210, in the U.S. District Court for the Northern District of California.
GameStop agreed to pay $15, part cash and part store credit, to California residents who, between March 23, 2006 and April 9, 2012, bought used games offering free downloadable content that was not available without paying more money.
On Sept. 17, 2012, U.S. District Judge Thelton Henderson approved the deal, which provided $250,000 in attorney fees to class counsel at Baron & Budd in Encino, Calif., and Initiative Legal Group APC in Los Angeles.
Baron & Budd's Mark Pifko says notice went out to the roughly 700,000 people who had signed up for a customer loyalty program but only a few hundred people applied for and received reimbursement.
The settlement also required GameStop to post in its California stores and on its website for two years a warning that "Certain Downloadable Content and Online Features May Require an Additional Purchase."
Osefchen says the warning might not be enough because even if buyers know they might have to pay an additional sum, they might still think they are saving money on used games.