Bullshit. "Didn't read the warning' is not an excuse. Also, Oblivion (the console variety with only 1st party mods at any rate) has extremely tame graphical and sound effects, I can remember a few sudden flashes (lightning and fire spells if viewed from a certain angle) but nothing I would call a 'strobe'.
Although, and can someone correct me if I'm wrong, does it necessarily HAVE to be a strobe light to cause a seizure, or could the screen refreshing dozens of times a second cause a seizure?
My sympathies to this guy, but this is a crap lawsuit IMO.