Chicago Business Litigation Lawyer Blog
When one party sues another over a business dispute, not only does the defendant deny the allegations, but it’s also common for the defendant to countersue, meaning they bring their own allegations against the individual or entity suing them. After Turner “Tfue” Tenney, a professional esports player, sued FaZe Clan, a professional esports organization, FaZe Clan turned around and sued Tenny for allegedly breaching his contract with them and denying them a portion of the income he earned from streaming.
The legal dispute started in May of 2019 when Tenney sued FaZe for allegedly operating as an unlicensed agency, blocking Tenney from various business opportunities, and taking up to 80% of the income Tenney earned.
Tenney claimed that, by allegedly operating as an unlicensed agency, FaZe had violated the California Talent Agency Act (TTA), which prohibits unlicensed agents from managing talent in the state of California. Tenney used this as his basis for asking the court to rule that his contract with FaZe was invalid because it went against California law, but FaZe argued that it hadn’t managed Tenney in the state of California, and so their contract was not subject to California law.
Tenney also alleged FaZe had breached the Gamer Agreement between Tenney and the company by failing to pay an agreed-upon fee of $2,000 per month. FaZe did pay the fee eventually, but Tenney alleged the payments were so late as to render the contract invalid.
Tenney lives in New York City, so FaZe argued that, not only was their contract with Tenney valid, but that any legal disputes between Tenney and FaZe belonged in a New York state court, rather than a California state court. The New York court agreed with FaZe on that count, and it rejected Tenney’s allegations that the tardiness of FaZe’s payments of the $2,000 monthly fee invalidated the contract.
FaZe also had its own complaints to bring against Tenney when they countersued. While Tenney was trying to sue to get out of his contract with FaZe, the esports company not only argued that the contract was valid and enforceable, but sued Tenney for allegedly breaching that contract. They also alleged Tenney had earned $20 million in streaming revenue and had not given FaZe its share of that income.
When it came to the income Tenney earned from his Fortnite creator code, the New York court rejected FaZe’s allegations that it deserved a share of that revenue. The court’s decision was based on a quote from one of the co-owners of the company, Richard “Banks” Bengston, who said the company never collected revenue from creator code and had no intention of doing so.
The only area in which the New York court agreed with Tenney was his assertion that he might have a claim based on his allegation that FaZe had breached the TAA. The New York court said only a California judge could make a decision based on that allegation, and since FaZe’s headquarters are in Los Angeles and Tenney had worked with some of the company’s California agents, he might have a right to sue FaZe under California law.
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At Lubin Austermuehle, we focus on relationships and are driven by results. When it comes to unraveling copyright infringement disputes, we are proud of our track record of outright victories in court or substantial and lucrative settlements for our valued clients. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. We serve clients in Naperville, Aurora, Schaumburg, and throughout Illinois and the Chicagoland area. You can contact us online here or call us on our locally number at 630-333-0333.