Jim Sterling was sued for making fun of a game, and it was a bad idea

Game critic Jim Sterling and the somewhat infamous game developer James Romine of Digital Homicide have exchanged legal blows since 2014. They fought over damage to Romine’s reputation allegedly inflicted by Sterling’s videos about the studio’s work, otherwise known as libel or defamation. The result was anti-climactic: The parties settled and the case was dismissed with prejudice in federal court on Feb. 21.

Many are lauding this as a victory for Sterling and free speech. However, from a legal perspective, a settlement is hardly a conclusive outcome on the merits of the case.

There are still pearls of wisdom we can glean from the matter. From the perspective of a video game attorney, going to court is rarely, if ever, the optimal outcome. Settlement, and in turn identifying the negotiating chips available in the form of legal arguments, makes up a significant part of my practice. So what can we learn from this case?

First, defamation is a weak argument to rely on, especially if it’s your only argument. Second, the legal system is stacked against the “have-nots.” Litigation is an expensive and time-consuming investment. Self-representation generally produces an unfavorable outcome. And in that vein, the last takeaway is that litigation should always be a last resort — especially if you’re an indie developer.

The lawsuit

For those unfamiliar with the suit, back in 2014 Jim Sterling criticized the game Slaughtering Ground, developed and released on Steam by Digital Homicide, in a Let’s Play video on YouTube. The legal trouble started with a DMCA takedown notice implemented by Digital Homicide, which resulted in a put-back-up notice by Sterling. Matters progressed in a spectacular fashion when the developer attempted to sue 100 Steam users, and then sued Sterling directly in 2016 for defamation.

Ordinarily this is where I might go into a postmortem on the claim itself, except for two important facts: (1) James Romine entered his complaint pro se (he represented himself); and (2) Romine pleaded as an individual and not on behalf of his company in the first instance, which resulted in the first dismissal by the court, though he was free to amend and refile his complaint.

So we’ll skip the postmortem, but I do want to spend a bit of time on the difficulty of proving a defamation claim.

A civil action

Defamation is not a crime. Strictly speaking, it is a civil cause of action, or tort. It falls under the heading of a bundle of related claims termed “personality rights,” which include the right of privacy and right of publicity. It is also governed entirely by state statutory or common law in the U.S.

While there are many variations on the elements of a defamation claim, they tend to follow the same pattern. We’ll use Arizona as an example, in light of Romine v. Sterling. To prove defamation under Arizona’s common-law claim for that offense, a plaintiff must demonstrate the following:

1. A false statement concerning the plaintiff.
2. The statement was defamatory.
3. The statement was published to a third party.
4. The requisite fault on the part of the defendant, and
5. The plaintiff was damaged as a result of the statement.

Morris v. Warner, 160 Ariz. 55, 62 (Ariz. Ct. App. 1988).

In addition, statements made by the press toward public figures or concerning matters of public interest present an additional hurdle: The plaintiff must also show “actual malice,” which requires proving the intent of the defendant.

Defamation is difficult, but not impossible, to prove. For example, Jesse Ventura won a lawsuit against author and former Navy SEAL Chris Kyle, when Kyle claimed in his book American Sniper that he punched Ventura in the face at a bar over comments Ventura made to him.

Ventura’s victory was bittersweet: Although the jury believed his side of events — namely, that the conversation and subsequent punch-out never happened — Ventura’s reputation took a beating anyway, because he was suing a decorated veteran who had since been murdered. And a federal court eventually threw out the $1.8 million judgment that had been rendered in Ventura’s favor.

But here’s the kicker — every single element of defamation relies on a massive body of (often conflicting) legal precedent to determine when, how and whether each element is met. It is not a legal claim that can be proven on the pleadings. Rather, it is deeply rooted in legal discovery, and it is easy to misstate the grounds on which an element is met in a complaint. If you fail to properly spell out each element in a complaint, the suit can be dismissed under the Federal Rules of Civil Procedure, Rule 12(b)(6).

On top of that, you have procedural grounds for dismissal. For instance, and as exemplified in this case, does the plaintiff have standing to sue? The Arizona district court determined in its first dismissal that Romine as an individual did not, based on his complaint. If any party was affected, it was his studio, Digital Homicide.

There are two additional points worth discussing, because they present the two most common reasons that defamation cases fail. The first element, “a false statement concerning the plaintiff,” must be a statement of fact that is actually false. Opinions don’t count. “Your game sucks” is invariably going to be viewed as an opinion.

Similarly, a critic alleging that he or she thinks it’s possible that certain “assets are stolen” is speculative, and thus may also treated as opinion. Hyperbole and similar invective — no matter how displeasing to the target — will generally fall in the opinion column, and thus outside the scope of a defamation claim.

The final hurdle, and perhaps the most significant, is showing actual malice. This is tricky because the requirement arises as a defense. The defendant must show that the plaintiff is a public figure, or that the subject matter is one of public interest. In some rare cases, the defendant may also have to show that he or she qualifies for the defense, although the Supreme Court ruled in Citizens United v. Federal Election Commission that institutionalized press did not have greater First Amendment protection than an ordinary speaker.

Let’s say for argument’s sake that the defense is successfully raised: To show actual malice, you must provide evidence that the author either recklessly disregarded the truth or knew that the statement they were making was false.

The end result? Proving defamation is both incredibly difficult and expensive. It requires full discovery and trial, and is almost always the subject of an appeal. An attorney never goes into settlement or litigation with a single arrow in her quiver, however, which brings us to the next point.

Lessons from my torts professor

I have probably forgotten more jurisprudence than the average person learns about the law. That isn’t unique, and I’m not bragging — I’m a licensed attorney, I’ve been doing this for almost a decade, and I represent a lot of high-profile clients in the games industry. There are plenty of attorneys with more experience who can lay an even greater claim to that simple fact: We know what we’re doing, which is why we’re expensive.

But I do remember two of the first lessons my torts professor from law school stated on the first day of class. First: “Sue the bastard, but sue the fat bastard.” Explained in a way that doesn’t sound like a verbal assault on personal appearance, he taught us that while all liability is based upon fault, you can’t bleed a stone. Sue whoever has the deepest pockets in a dispute. I’m not familiar with Sterling’s financial situation, but as he could afford an attorney we can assume he is at least solvent. However, not many YouTubers are millionaires. It’s unlikely that Sterling could afford to pay the damages claimed by Romine.

Second: “The law favors repeat players.” Tort law in the U.S. isn’t really justice. It’s not accessible to the average, everyday victim. It inherently favors those same deep pockets you should target, because they are the ones who can afford to lose lawsuits. First-time pro se plaintiffs have little to no chance of success.

A lesson I learned later is the one I mentioned a bit earlier: An attorney never goes into litigation or settlement with only one arrow in her quiver.

What struck me in this case was that Romine only relied on defamation, even though the legal starting point was a DMCA takedown notice. I’ll save the merits and demerits of a fair use claim in the context of Let’s Play videos for another time. But for the purposes of this article, there is one vital point that makes a copyright claim here an excellent negotiating chip in settlement: Let’s Plays haven’t been litigated.

There have certainly been disputes, but they always seem to be settled in some form or another. For example, Nintendo took a roundabout approach by convincing YouTube to pay Nintendo a portion of the ad revenue for Let’s Play videos based on Nintendo’s products. I’m inclined to believe this hasn’t come to judgment in prior cases because no one is eager to know the result, which may come out against them.

It’s uncharted territory, and for now Let’s Players and game publishers seem unwilling to risk their respective rights in a legal action that may have industrywide impact. It’s a weird situation in which both sides fear they could lose, and the implications would be damaging enough that developers, publishers and YouTubers don’t want to risk it.

There are other legal arguments that would have benefited Romine in this case; trademark disparagement, unfair competition, interference with business relations, harassment and intentional infliction of emotional distress are just a few (in Romine’s defense, he claimed the latter two causes of action in his amended complaint). So why only stick with one?

Simple. Understanding the nuances of the law isn’t Romine’s job. He’s a game developer. Which takes us to our last point.

Litigation is a zero-sum game for game development

I’ve come across attorneys who are quick to raise the “we’ll sue” flag in a dispute and then immediately file a complaint before entering settlement negotiations.

I love and respect my colleagues, but this legitimately makes me concerned for their client even if they have an airtight case. If they have an airtight case, the opponent is more likely to settle, so that isn’t an excuse. I put them in the same category as those who promise to “take this to the press,” which is very nearly malpractice. You risk losing attorney-client privilege when you make matters public.

I’m less judgmental when this comes from unrepresented parties. I’m more judgmental when it comes from clients actively working against their attorney’s advice. It’s a sliding scale.

Video game law isn’t personal injury law. I’m not demeaning my colleagues who practice personal injury — I think most would agree that they have an easier time proving the merits of their claims than an attorney representing a client in an intellectual property dispute. The legal nuances are far more complex, and litigation is almost always going to produce a net negative result for everyone involved: Even if you win as a plaintiff against a deep-pocketed defendant, it will do little to repair your reputation and goodwill. In a similar vein, most personal injury cases settle. It’s why the insurance industry exists.

Games don’t get made when you’re investing all your liquid cash to pay off attorney and court fees. Most indie developers don’t have commercial liability insurance with an Error & Omissions rider — which covers things like intellectual property and personality rights claims — even though they should. They can’t afford a lawsuit no matter how right they think they are. It’s a scorched-earth tactic in game development, it kills creativity and it burns people out. So why do it?

Conclusion

I wish the legal system were more accessible to the have-nots. It’s why I do some pro bono work, or offer free counsel. But the reality is far from the ideal. Litigation concerning intellectual property, personality rights, patents, contracts and international law is a cost-prohibitive venture. Even the “haves” don’t want to dump money into it — they’d rather put that money toward making games.

The sense of vindication you receive from a legal “win” won’t keep your studio’s lights on unless you have a very good legal hand to play and the other party has a lot of chips on the table. You have to be reasonably sure you’ll win, in other words, and know that the other side will have to pay enough — and be able to pay — to make it all worth it.

However, the average game developer has minimal knowledge of the cards in his deck, let alone what combination will result in a winning hand. There are more cost-effective options, including binding arbitration, informal mediation and, ultimately, settlement.

I won’t say “never sue.” That’s an unrealistic notion, and it won’t stop you from being a defendant. (Imagine! A lawyer telling you not to sue.) It’s a fact that sometimes a lawsuit is the only way to go. However, it should never be your first choice. If you have alternatives, take them, even if it means biding your time until you’ve made enough cash to finance legal recourse. Because if you are going to sue, you are likely going to have to go all-in. That’s reckless when you’re going in alone, and it’s likely that Sterling’s counsel told him the same thing about Romine early in the case.

Mona Ibrahim is a Senior Associate at Interactive Entertainment Law Group. She is an avid gamer and has dedicated her career to counseling the video game industry and indie development community.