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Maher v. Microsoft Corp.

United States District Court, N.D. Illinois, Eastern Division

March 29, 2018

JAMES MAHER, individually and on behalf of other persons similarly situated, Plaintiff,
v.
MICROSOFT CORPORATION, Defendant.

          MEMORANDUM OPINION AND ORDER

          Joan B. Gottschall United States District Judge

         Defendant Microsoft Corporation (“Microsoft”) operates a service called Xbox Live, which works in conjunction with its Xbox 360 video gaming console. The amended complaint (“AC”) describes Xbox Live as “an online multiplayer gaming and digital media delivery service.” AC ¶ 12, ECF No. 21. The plaintiff, James Maher, claims that he and other similarly situated individuals he would like to represent in a class action, see Fed. R. Civ. P. 23(b)(3), do not get their money's worth from Xbox Live because Microsoft cuts them off the service without refunding them for periods lasting between one and twenty-one days. Microsoft has filed a motion to compel Maher to arbitrate his individual claims under its Master Services Agreement (“MSA”). ECF. No. 24.

         After reviewing the parties' initial briefing, the court ordered them to answer four questions. ECF No. 35 at 1-3. The parties have supplemented the record with evidence and argument. For the reasons discussed below, the court grants the motion to compel arbitration.

         I. FACTUAL BACKGROUND

         While signing up for Xbox Live's Silver level is free, playing with others online and other premium features requires a prepaid Xbox Live Gold subscription. Decl. of A. Holbrook ¶ 2 (“Holbrook Decl.”), ECF No. 26. Microsoft sells Xbox Live Gold subscriptions for one-, three-, six-, and twelve-month terms. AC ¶¶ 14-15. People can sign up for Xbox Live Gold using a credit card, or they can buy a prepaid subscription card like the one at issue here. Holbrook Decl. ¶ 3. A consumer buys either a physical card or downloads one and then enters a 25-character “prepaid code” (a protective layer must be scratched off to reveal the code on physical cards) printed on the card into the Xbox 360 console, the Xbox.com website, or the Xbox Windows 10 app to redeem the subscription. See AC ¶¶ 16-18; Holbrook Decl. ¶¶ 3-4.

         The circumstances under which Maher purchased the subscription that is the subject of his claim were not initially clear. In supplemental briefing, Maher represents that in March 2016 he bought a twelve-month subscription card from a Best Buy store in the Chicago area. ECF No. 38 at 10. His son redeemed the card's code using his personal Xbox Live account, AC ¶ 22, but according to the complaint, Microsoft deliberately interrupted his Xbox Live service, effectively locking him out of it, on several occasions during the ensuing year, see AC ¶¶ 24, 33.

         Maher brings claims under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/1 et seq., for unjust enrichment, and for conversion. AC ¶¶ 47-68. He proposes to represent two classes of Illinois purchasers of Xbox Live subscription cards, one for his ICFA claim and one for his conversion and unjust enrichment claims. See Id. ¶¶ 36-37 (proposing class definitions).

         A. The Prepaid Subscription Card

         Maher set forth the full text of both sides of the prepaid subscription card, which he alleges is typical of Microsoft's cards, in his amended complaint. See AC ¶¶ 27-28 and the images therein. The card does not explicitly mention arbitration or the MSA. See Id. Leaving out system requirements and Microsoft's address, here is what the card's back says:

*Games and media content sold separately. Additional subscriptions and/or requirements apply for some features. Multiplayer between Xbox One and Xbox 360 not supported. For features requiring Gold, see xbox.com/goldfeatures. Free Games Offer: Paid Gold members only. Active Gold membership required to play redeemed Xbox One games. Kinect and/or hard drive required for some games. Some restrictions apply. See xbox.com/live.
TO REDEEM CODE ONLINE:
Have a Microsoft account or Xbox Live profile? Simply log in to your account on xbox.com/redeemcode and enter the 25-digit code.
Need an account? Go to xbox.com/live, follow the steps to create a new account, then enter the 25-digit code.
For more information on how to redeem codes on your Xbox console, visit xbox.com/howtoredeem-console.
CARD HAS NO VALUE UNTIL ACTIVATED AT ...

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