Currently, there is a dispute between two prominent League of Legends teams, Team Solo Mid and H2K, over whether a player entered into a binding agreement with H2K before Team Solo Mid made a counteroffer which the player accepted. However, what makes this particular incident unique is that H2K has made it known that they are considering pursuing legal action against Team Solo Mid for its tortious interference with the player’s agreement with H2K.
Many of the facts surrounding this incident are still unknown and such a lawsuit between these two international businesses raises many questions (like what jurisdiction the case could be brought in). This blog post will address one of the most basic questions involved, specifically, what is a claim for tortious interference? Although the question of jurisdiction will alter the analysis of what’s needed to prove such a claim, this post will examine the cause of action under New York law (as that is where I’m licensed to practice).
In order to prove a claim for tortious interference with a contract in New York, the Plaintiff must show:
- That it had a valid contract with a specified third party;
- That the defendant knew of that relationship;
- That the defendant intentionally induced the third party to breach the contract or otherwise rendered performance of the contract impossible;
- That the defendant’s interference caused injury to the relationship with the third party.
In the esports poaching context, this means that the aggrieved team must show:
- That it entered into a valid contract with the player;
- That the other team knew the aggrieved team entered into a contract with the with the player;
- That the other team’s actions were intended to cause the player to breach his or her contract with the aggrieved team, and the player did breach their contract; and
- That the aggrieved team suffered damages as a result of the breach of contract.
Although tortious interference can give eSports teams some protection under a poaching scenario, that protection is measured due to the difficulty of proving the claim. In New York, succeeding on such claims has become difficult for a several reasons, one of which being that the complaint asserting the cause of action must specify with particularity how each element of the claim is met (as opposed to making generalized assumptions/conclusions).
Due to the required particularity that a complaint must have in order to assert a viable cause of action, that standard effectively requires that the aggrieved team has sufficient knowledge of the other team’s actions and intentions prior to starting the lawsuit in order to allege facts which support the claim. However, there is no black and white test to determine if a team can allege a sufficient amount of facts to support the cause of action. Of course, the more facts that can be alleged the better. But, this means that bringing any such claim lacks certainty of success from the outset.
Further, such claims may be difficult to prove from an evidence standpoint, as intent and knowledge have high bars of proof to satisfy. What may be particularly helpful from an evidentiary perspective are logs of any online communications, as much of the eSports industry relies upon Skype and similar programs for communications. However, obtaining such communications during the discovery process of such a lawsuit is no easy task as well.
Lastly, it is difficult for tortious interference claims (in general) to succeed due to the availability of the Economic Interest affirmative defense. For reference, an affirmative defense is a set of facts which if the Defendant proves successfully can mitigate or negate liability. In order to prove the Economic Interest defense, the Defendant must show that it acted to protect its own legal or financial stake in the third party’s business. However, the bare fact that the Plaintiff and Defendant are competitors is not enough to justify Defendant’s alleged actions and avail them of this defense. In the context of a poaching situation in eSports, this defense would likely not be available unless a team can show a valid economic interest and not just assert that they were trying to gain a competitive advantage.
Although it may be difficult for an eSports team to pursue a lawsuit for tortious interference when another team has poached a player, it is nonetheless a viable option for a team seeking to protect its interests. Unfortunately, the few governing bodies of esports leagues have done little to disincentivize poaching, forcing teams to either accept the situation, or attempt to avail themselves of their legal rights. However, the cost of legal fees associated with pursuing a lawsuit may discourage teams from enforcing their legal rights. Unfortunately, those costs and the lack of significant league action may force teams to simply accept that their player has been poached.
Its important to remember that poaching, or tampering, is not unique to the esports industry. However, other industries have found more effective ways of disincentivizing the problem. The professional sports industry has had tampering issues arise, but set strict rules and penalties for all tampering offenses, including steep fines, the suspension of the offending person, forfeiture of draft picks, and the prohibition of signing the player being tampered with. Without stronger league governance regarding poaching, like we see in the pro sports industry, teams are left to navigate the costly and difficult road of pursuing legal action for tortious interference if they want to protect themselves.