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Judge Dismisses Battlefield 4 Class Action Lawsuit

by Matthew Kato on Oct 22, 2014 at 05:35 AM

U.S. District Judge Susan Illston issued a ruling this week in favor of Electronic Arts in a class action suit with EA investors over the disappointing performance of Battlefield 4.

The judge said that statements by EA executives before the game's release for last-gen systems on October 29, 2013 were not made to artificially inflate the company's stock price and did not constitute securities fraud as the lawsuit claims. Instead, the judge said they were "puffery" not meant to mislead investors, but rather statements of opinion and corporate optimism.

Included in the class action's list of deceptions were media statements and awards lauding the game at E3 and other conferences where the game was shown. The complaint also relied on statements from developer DICE in the fall before launch citing the difficulties the company was having developing and testing the game.

"Defendant Gibeau's [EA Labels president Frank Gibeau - Ed.] May 7, 2013 statement that EA was in a 'much better state' for the next-generation transition and that Frostbite 3 had 'largely been de-risked' is a non-actionable vague expression of corporate optimism and puffery upon which no reasonable investor would rely." Judge Illston's ruling read. Gibeau's comment was one of eight statements that the complaint deemed were "materially false or misleading."

Despite this dismissal, the judge allowed the plaintiffs to amend the dates in the lawsuit during which stock was purchased. Five of the eight statements by EA executives occurred after the lead plaintiffs purchased their stock on October 16. The complaint can also be amended to include new lead plaintiffs who purchased stock after all the statements were made. An amended complaint must be filed on or before November 3, 2014.

[Source: Gamasutra via Courthouse News]


Our Take:
The lawsuit is an interesting one since as gamers we often hear similar statements of optimism from developers and executives. It remains to be seen whether EA's leadership or those of any other company will temper their statements in the future to avoid similar lawsuits.

I'm certainly not a lawyer [big disclaimer!], but even if a new lawsuit occurs with different dates during which a lead plaintiff purchased stock, I imagine Judge Illston's ruling that the statements themselves were not misleading would continue to protect EA. We'll see.