The date for the first major hearing in the lawsuit between esports organisation FaZe Clan and Fortnite player Turner “Tfue” Tenney will take place on the 8th November according to the latest docket entries
The hearing will be crucial to the direction the lawsuit heads in as it will see the court make a ruling on whether or not California or New York is a valid jurisdiction for the case.
For those of you who haven’t been following this lawsuit here is a summary. Tenney and his legal team believe that his contract is invalid for a number of reasons, one of the most important being that FaZe were operating as a talent agency on behalf of the player, something they did not have the proper licensing to do.
They argue that as most of their business and all the business related to Tenney took place in California that state is the appropriate jurisdiction and thus that state’s Talent Agency Act will apply.
FaZe have argued that as they are a company incorporated in Delaware and that the contract specifically stipulated that the jurisdiction that would apply was that of New York the California court should rule to dismiss under forum non conveniens.
They themselves have sought to have the case heard by a New York court, something that Tenney’s legal team have argued should be dismissed under the Colorado River Abstention Doctrine. This doctrine is invoked when parallel litigation is being carried out, particularly where federal and state court proceedings are simultaneously being carried out to determine the rights of parties with respect to the same questions of law.
Under such circumstances, it is argued it makes little sense for two courts to expend the time and effort to achieve a resolution of the question so one is dismissed. In this instance, there is a parallel case filed in the Los Angeles Superior Court and an investigation by the California Labor Commissioner’s Office in addition to the one FaZe filed in New York.
FaZe’s lawyers argue that this abstention is invalid, stating in the court documents:
“In the instant motion, defendant Turner Tenney (“Tenney”) asks the Court to abstain from exercising its rightful jurisdiction so that this case can be heard instead in a California state court. However, the contract at the heart of this case contains a mandatory and exclusive forum selection clause that requires it to be adjudicated in New York, under New York law. As discussed in detail below, there is no basis for the Court to abstain from exercising its jurisdiction in this case.
Tenney, a Florida resident, is a celebrity who is well known for competing in esports as a member of FaZe Clan’s Fortnite esports team. Beginning several months ago, Tenney began denying his contractual obligations to FaZe Clan, and instead sought to compete against FaZe Clan and keep the parties’ shared revenue streams for himself. However, Tenney did not commence an action a New York court, as required by the contract’s forum selection clause.
Rather, Tenney commenced an action against FaZe Clan in a California state court and filed a petition with the California Labor Commissioner.
FaZe Clan responded by commencing the instant action in New York, consistent with the forum selection clause. Tenney now seeks to wrest this case back to California. But Tenney does not, and cannot, argue either that the contract’s forum selection clause is invalid, or forum non conveniens. Rather, Tenney asks the Court to decline its valid jurisdiction under the exceptional Colorado River abstention doctrine.
In so moving, Tenney bears a heavy burden of persuasion…”
Tenney’s defence lawyers issued the following counter-argument to these points.
“The Colorado River factors warrant abstention. First, as explained in Tenney’s opening brief, these parallel cases present a “danger of piecemeal litigation,” a “paramount” consideration in any Colorado River analysis… If this Court were to conclude that Tenney breached the Gamer Agreement – while lacking the power to determine whether the Gamer Agreement is void ab initio due to Faze Clan’s breach of the TAA – then Tenney would likely not be bound by that determination in California because he would not “have had a full and fair opportunity to contest the prior determination.
Second, the parties agree that this case does not involve a res, but the analogy remains apt and helps explain why abstention is appropriate. The Labor Commissioner Proceeding and the LASC Action do not involve a mere “disputed legal question,” as FaZe Clan asserts. They involve a threshold legal question – whether the Gamer Agreement is void ab initio because FaZe Clan has violated the TAA – that can be answered only in those proceedings, much like when a Court has assumed jurisdiction over a res.”
Tenney’s team also point out that the other complaints take precedence as they were filed first and they accused FaZe of trying to slow down those other proceedings by not making themselves available for hearings.
“Third, the relative progress of this case compared to the Labor Commissioner Proceeding and the LASC Action favors abstention. FaZe Clan concedes as it must that both the Labor Commissioner Proceeding and the LASC Action were filed before this action. In addition, both California actions are moving forward, despite FaZe Clan’s transparent efforts to slow them down. FaZe Clan has just advised the Labor Commissioner that it is completely unavailable between November 18, 2019 and February 16, 2020 for an evidentiary hearing in that matter – a representation belied by FaZe Clan’s evident interest in accelerating this action.”
They also point out that California should be a more convenient jurisdiction as FaZe are headquartered in California, something FaZe themselves didn’t dispute or challenge earlier in the proceedings.
If California isn’t ruled as a suitable jurisdiction it wouldn’t necessarily end Tenney’s case against the esports organisation but it would significantly hamper some of their arguments and be publicly viewed as a big win for FaZe. We shall keep you up to date on details from the hearing here at Dexerto.