You’re thinking of the Japanes woman who was arrested for killing her ex’s character. To be fair, the suit and arrest were because she broke in, got on his computer and then deleted the account. The break-in and illegally accessing someone’s internet information are illegal.
There have been suits, and at least one murder, involving gamers over weapons in WoW. The suits make weird sense though because, at least at the time, there was a strong market for rare weapons. There were people who made a very good living earning weapons and then selling them. So if you stole someone’s weapon outside the normal game parameter, you were inflicting serious financial damage.
Now the murder... totally screwy.