Way back in 2016, CS:GO was in the hot seat due to the growing trend of loot box openings and dodgy gambling websites looking to rake in cash while fans try their luck at getting valuable skins. Phantoml0rd, otherwise known as James Varga, was suspended from Twitch during all of this for promoting CS:GO Shuffle, a skin gambling website that he may have had an ownership stake in. Varga went on to sue Twitch over the termination of his contract and while the case is not over yet, a judge did throw one ruling in his favour recently.
The partnership contract Varga had with Twitch contained a ‘limited liability clause', stating that Twitch could only be sued for up to $50,000 in damages. It turns out that the judge on this case wasn’t fond of that clause, labelling it as “unconscionable”, a term used when a contract clause is too one-sided in favour of the party with superior bargaining power. Since this contract clause can not be enforced, Varga can in fact sue for damages beyond the $50,000 mark.
It wasn’t all smooth sailing though, as reported by Richard Lewis on Dexerto, the judge did push back on some of Varga’s defence claims, including the idea that he did not read the digital copy of the Twitch contract despite spending so many hours conducting business from his PC.
This ruling only relates to the amount of damages that Varga can claim in his lawsuit. A large part of the judge’s reasoning here was the fact that Varga earned between $5000 and $10,000 per month on Twitch, so a maximum $50,000 payout for lost earnings wouldn’t be anywhere close to what he would have made from streaming since his ban. This also sets a precedent for the future, as the same clause is apparently included in other Twitch partner contracts. With this judge's ruling, if any of those other partners were to sue Twitch, that clause would likely be invalidated again.
This is far from the end of this lawsuit. It is turning into a very lengthy process but there will be more court dates and updates from both sides in the coming months unless a private settlement is reached.
KitGuru Says: Varga’s lawsuit is based on the idea that his ban from Twitch was unsubstantiated but there are reports and chat log leaks that show the opposite in regards to CS:GO Shuffle promotion. There is still plenty about this case that we don't know though, so we will have to wait and see how things go once Twitch has a chance to respond.