Star Citizen Kickstarter backer loses lawsuit pursuing $4,500 refund

Star Citizen's Kickstarter raised over $2.1 million in 2012. Some of that was chipped in by Ken Lord, who was eager to play a successor to Wing Commander, a space combat sim by Chris Roberts, the designer leading Star Citizen's development. That was over five years ago. Today, not only is Star Citizen still in development (its Kickstarter delivery date originally suggested a late-2014 release), it's become a radically different game. Lord didn't like the direction the game was headed and was disappointed to see it go unfinished for so long, so he tried to get his Kickstarter pledge refunded.

As Lord told Motherboard, first he sent a series of messages to developer Roberts Space Industries (RSI) requesting a refund. He was denied on the grounds that he was outside the 14-day timeframe for Kickstarter refunds, which is a common hurdle for backers seeking a refund but also one other backers have cleared in past cases. Next, he sent a five-page letter to RSI explaining his case, again requesting a refund, and promising legal action if he was ignored. Part of Lord's claim was that, due to having multiple sclerosis, a disease which affects nerves and muscle control, he will not physically be able to play the first-person shooter segments added to the Squadron 42 campaign. 

"My hands shake badly," Lord told Motherboard. "I have tremors… They just recently confirmed that you have to do the first-person shooter thing to get through Squadron 42. I can’t do that, I just can’t do that. So my money’s stuck in a game I can’t possibly play."

(Image: © Mr.Hasgaha)

Nevertheless, Lord's letter was ignored, so he took RSI to small-claims court. The court dismissed the case, citing an arbitration clause in the game's terms of service which protects RSI from such lawsuits. 

The clause in question reads: "If you and RSI are unable to resolve a Dispute through informal negotiations, either you or RSI may elect to have the Dispute (except those Disputes expressly excluded below) finally and exclusively resolved by binding arbitration. Any election to arbitrate by one party shall be final and binding on the other. YOU UNDERSTAND AND HEREBY AGREE THAT YOU HEREBY WAIVE THE RIGHT TO SUE IN COURT AND HAVE A JURY TRIAL." 

Notably, these terms have been updated four times in the past six years, and this clause was not in the terms of service in 2012 when Lord backed Star Citizen's Kickstarter. It was added in 2013. Additionally, the top line of the current draft of the terms of service clearly states: "These Terms of Service (TOS) do not affect any transactions made before its effective date. All prior transactions are governed by the TOS in effect on the date of such transactions."

So why was Lord's lawsuit dismissed? In a post on Reddit, Lord said that "despite the top sentence on the TOS, CIG/RSI successfully argued that the arbitration clause should be applied to transactions even before the clause existed."

However, according to RSI, only a portion of the $4,500 Lord pledged to Star Citizen was pledged under the old terms of service. Lord told Kotaku his pledge consisted of multiple installments made over several years. As RSI said in a statement to Kotaku, "a huge majority" of his later pledges fell under the updated terms of service. "His pledges with new money on top of his earlier pledges required him to accept the new Terms of Service," RSI said.

The Star Citizen Terms of Service have changed substantially over the years. For example, under Commercial Terms, the original 2012 draft says (bolding is ours to emphasize changes between versions): 

"CIG agrees to use its good faith business efforts to deliver to you the pledge items and the Game on or before the estimated delivery date. However, you acknowledge and agree that delivery as of such date is not a promise by CIG since unforeseen events may extend the development and/or production time.  Accordingly, you agree that any unearned portion of the deposit shall not be refundable until and unless CIG has not delivered the pledge items and/or the Game to you within 12 months after the estimated delivery date." 

Compare that to the 2015 draft, which, under Fundraising & Pledges, reads: 

"RSI agrees to use its good faith business efforts to deliver to you the pledge items and the Game on or before the estimated delivery date communicated to you on the Website. However, you acknowledge and agree that delivery as of such date is not a firm promise and may be extended by RSI since unforeseen events may extend the development and/or production time. Accordingly, you agree that any unearned portion of your Pledge shall not be refundable until and unless RSI has failed to deliver the relevant pledge items and/or the Game to you within eighteen (18) months after the estimated delivery date." 

Now look at the 2016 draft, which also says pledges are bound under the terms of service in effect at the time of the pledge: 

"RSI agrees to use its good faith business efforts to deliver to you the pledge items and the Game on or before the estimated delivery date communicated to you on the Website.  However, you acknowledge and agree that delivery as of such date is not a firm promise and may be extended by RSI since unforeseen events may extend the development and/or production time. Accordingly, you agree that any unearned portion of your Pledge shall not be refundable until and unless RSI has ceased development and failed to deliver the relevant pledge items and/or the Game to you. (Pledges made under previous Terms of Services continue to be governed by the corresponding clause of the Terms of Services, or of the Commercial Terms, as applicable, which were in effect at the time of making the Pledge)."

Finally, look at that same paragraph as it appears in the current draft, which was last updated on January 25, 2018: 

"RSI agrees to use its good faith business efforts to deliver to you the Pledge Item(s) as soon as possible. You agree that any unearned portion of your Pledge Funds shall not be refundable until and unless RSI has ceased development and failed to deliver the relevant Pledge Item(s) to you. In consideration of the promises by RSI hereunder, you agree that you irrevocably waive any claim for a refund of your Pledge Funds except as set forth in the preceding sentence."

There's a pattern to these revisions. As Star Citizen's delays have piled up, its terms of service have been updated to be less concrete about the duration of its development and the criteria for pursuing a refund. As it stands, backers cannot pursue a refund as long as RSI has not "ceased development," which is pretty airtight. There's also the inconsistency of the wording around past pledges and what terms they are held to. So, perhaps the outcome of Lord's case shouldn't come as a surprise, but it does make you wonder how many times Star Citizen's terms will be updated before it's finally released.