Epic Games Wins Arbitration Bid for Fortnite Breach Lawsuit (1)

Feb. 4, 2020, 6:44 PMUpdated: Feb. 4, 2020, 9:59 PM

A Fortnite user suing over a 2019 breach said to potentially expose the information of 200 million users must arbitrate his allegations of lax company data security, a federal judge in North Carolina ruled.

Epic Games Inc. argued that plaintiffs agreed to arbitrate such claims when they assented to the terms of service of the Fortnite product.

Judge Terrence Boyle of the U.S. District Court for the Eastern District of North Carolina agreed. He stayed the case Feb. 1 while the parties try to resolve it.

Businesses such as Epic Games seek arbitration because the procedure likely takes the chance of a jury trial off the table and shields any negative information from becoming public through court filings.

Nick Chester, spokesman for Epic Games, said the company doesn’t comment on pending litigation. Counsel for the plaintiff didn’t immediately respond to requests for comment.

Plaintiff Michael Heidbreder filed suit in August 2019 alleging that the breach harmed him by exposing his credit card data, and that Epic Games had faulty data security.

Heidbreder tried to keep the case before a federal judge, saying his minor child signed the terms of service and lacked the legal ability to agree to arbitrate.

Boyle disagreed, saying Heidbreder gave permission for his child to play Fortnite. The child “would have reasonably believed he had the authority to click ‘agree’” to the terms of service, Boyle said.

“Users had meaningful choice over the arbitration provision,” Boyle said. The company gave them 30 days after accepting the terms of service to opt-out of alternative dispute resolution, he said.

Williams Mullen and Drinker Biddle & Reath LLP represented Epic Games. Franklin D. Azar & Associates PC and Cohen Milstein Sellers & Toll Pllc represented the plaintiff.

The case is Heidbreder v. Epic Games, Inc., 2020 BL 36567, E.D.N.C., No, 19-CV-348-BO, order 2/1/20.

(Adds company spokesman in fifth paragraph.)

To contact the reporter on this story: Daniel R. Stoller in Washington at dstoller@bloomberglaw.com

To contact the editor responsible for this story: John Hughes at jhughes@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com

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