The latest filing in the ongoing legal action between former Twitch streamer James “Phantomlord” Varga and Twitch has occurred, with the streaming platform presenting several arguments as to why they believe the case should be dismissed.
The legal wrangling between the two parties has lasted two years at this point, with Varga seeking $35 million of damages and Twitch maintaining that not only were they within their rights to ban him but also that his activities caused them reputational damages as well.
The bulk of the arguments thus far revolved around a contractual clause that stated any damages sought by either party in the result of a breach would be limited to $50,000. After much back and forth, Judge Karnow of the Superior Court of California ruled that such a clause was so disproportionately in favor of Twitch that it was substantively unconscionable. This ruling enables Varga to seek uncapped amounts of damages.
With the trial now at the phase where parties can submit motions for summary judgments – essentially argumentation that shows something to be so legally evident there is no need to argue it at trial – Twitch have requested that the judge dismiss the case entirely on several legal grounds.
The first request for dismissal that Twitch make is on the grounds that they believe Varga’s claims to be barred under Section 230(c)(1) and 230(c)(2) of the Communications Decency Act. Many will know this particular law as the one that states platforms are not publishers, and they are immune to legal liability from the actions of people who use their platforms. Currently, there is a political discussion around whether or not these protections should be repealed amid claims of partisan censorship from tech platforms.
However, another aspect of the law is that it protects such platforms from lawsuits being brought against them on such matters as, quoting from the findings in the case of Nemet Chevrolet, Ltd. v. Consumeraffairs.com, “Section 230 grants “immunity from suit rather than a mere defense to liability… Courts therefore routinely apply Section 230 in the early stages of litigation because such immunity would be “effectively lost” if defendants were subject to protracted litigation.”
Section 230 also provides another form of immunity for such platforms for “any action voluntarily taken in good faith to restrict access to or availability of material that the provider considers to be obscene, or otherwise objectionable.” Twitch state that as Varga’s legal team have not been able to provide any evidence of them having acted in bad faith, they meet the requirement. “Moreover, Twitch did not act in bad faith because the TOS and Partnership Agreement (to the extent it even governed his account termination here) forewarned against exactly the type of content for which Plaintiff was penalized” they argue. “Inappropriate content, non-gaming content, and activity that contravenes applicable laws such as gambling productions.”
Twitch’s legal team also state that without these protections there would still be no grounds for a claim that there was a breach of contract. They outline that all streamers on the platform agree to be governed by their terms of service and they are clear in that “Twitch, in its sole discretion, for any or no reason…may terminate any account…at any time. . . Twitch may also in its sole discretion and at any time discontinue providing access to the Twitch Service...with or without notice….any termination of your access to the Twitch Service or any account you may have…may be effected without prior notice, and you agree that Twitch will not be liable to you or any third party for any such termination.”
As the other arguments get into the minutiae specific to Varga’s claim against Twitch, he had also presented an argument that Twitch had unfairly breached their contract by banning him when he was told by a Twitch employee he could stream non-gaming content for 30 minutes at a time. This was a significant part of the evidence presented to the court and the depositions that were taken. Twitch’s counsel argues that not only is this an irrelevant detail but that the fact Varga didn’t adhere to these limitations, which was one aspect that prompted the ban from the platform, he invalidates his claim that it was Twitch that caused him harm.
“First, Varga claims that he relied on Twitch’s statements about the 30-minute rule and was penalized for following them – but this is demonstrably false. In fact, he did not limit non-gaming content to 30 minutes- a-time; he exceeded this limit on all of the occasions on which he received a violation for non-gaming content. The fact that he did not adhere to Twitch’s admonitions alone defeats the claim that they caused his harm.”
They also continue stating that “more importantly, Plaintiff’s account was suspended for other, independent reasons besides broadcasting non-gaming content. It is beyond dispute that, irrespective of his non-gaming broadcasting, he committed a long string of serious violations of Twitch’s policies, which had already led to a prior suspension, providing ample reason to terminate. Thus, Plaintiff’s reliance on Twitch’s supposedly inconsistent representations about broadcasts of less than 30 minutes is a red herring, and was completely irrelevant to the decision to terminate him.”
Finally, Varga’s legal team had also argued that his termination was covered by California’s Unfair Competition Law (UCL) as it “prohibits any unfair competition, which means 'any unlawful, unfair or fraudulent business act or practice.'” The basis for this argument was that his ban was arbitrary and by extension, on the basis of the evidence they presented, unfair. Unsurprisingly, Twitch reject this argument and state:
“As discussed above, Twitch could permissibly suspend his account under the TOS. In addition, Plaintiff’s attempt to repackage his breach claim as a UCL claim is an effort to put a square peg in a round hole. The claim is fatally flawed…”
Those flaws are listed as the claim failing to meet the requirement that it “protects the general public,” an essential component of claims under the UCL. In addition the legal precedent in the state is that selectively enforcing parts of contractual agreements is not deemed to be “unfair.” The claim also seems to seek out a resolution not covered by the UCL as the only remedies are “restitution” or “injunctions.” As Varga’s counsel invoked the UCL “to order Twitch to immediately lift Varga’s suspension and restore his Twitch.tv account” Twitch argue this invalidates the claim as functionally there are no grounds for this contained within the UCL.
While a trial date has been set for October of this year the court will now consider these multiple arguments for dismissal of the case. If one is accepted as having merit there’ll be a chance for appeal but if that were to fail the likelihood is the lawsuit would either have to be dropped or repurposed so as not to fall afoul of the laws that saw it dismissed. The court has set a tentative date of September to respond to these motions although they could be ruled upon much sooner.