Phantoml0rd can sue for more than $50,000 after Twitch lose appeal

A judge has ruled that a clause in the Twitch contract is “unconscionable

Twitch’s appeal against a decision that would allow James ‘Phantoml0rd’ Varga, a streamer involved in a controversial Counter-Strike: Global Offensive gambling scandal, to demand an uncapped amount of damages has failed in court.

Court documents obtained by Dexerto show that Twitch lost its appeal to prevent Varga from claiming more than $50,000 in damage in the ongoing lawsuit. This amount was stipulated by Twitch in Varga’s contract, but has since been ruled “unconscionable” by the Superior Court of California.

Although Twitch has tried to appeal that ruling, it’s been unsuccessful, allowing Varga and his team to demand a figure they believe to better reflect Varga’s alleged lost earnings.

“Varga reasonably could have concluded, and probably did as a result of his call with [Twitch employees] that he could not have maintained his popularity for long without Twitch,” the court documents obtained by Dexerto state. “By the time of the 2014 amendment, Own3d was gone, and there were no reasonable alternatives to Twitch for one intent on becoming or maintaining status as a top streamer. This weighs in favor of a finding of oppression.”

Although the judge has admitted some of the claims Varga and his team have submitted were “strange,” he argues that Twitch has not provided enough justification for the limited liability clause in the contract, and that in essence, the contract was deemed unfair on the basis that Varga’s monthly income was $5,000 or $10,000.

The court continues: “From a practical point of view… limiting recovery to $50,000 virtually kills off the odds of a suit against Twitch at all. The agreement doesn’t appear to have an attorney fees clause, and few – if any – lawyers would take on a contingency case against Twitch for some reasonable percentage of $50,000. The cap is unconscionable.”

Varga’s is suing Twitch after his channel was deleted in July 2019. Twitch took action and banned the streamer following reports from Richard Lewis that Varga failed to disclose he owned a CS:GO skin gambling website called CSGOShuffle that he regularly broadcast rigged rounds of.

But nearly two years after his ban, Varga announced on YouTube, in a now deleted video, that he was planning to sue Twitch.

“This is an important decision not only for Mr. Varga to seek full compensation for the losses he has suffered as a result of Twitch’s wrongful termination, but it also makes the case for hundreds if not thousands of other streamers who have signed contracts with Twitch should they similarly find themselves unfairly singled out by the platform’s administrators and cut off from their main source of income,” William J. Quinlan, the lawyer from Quinlan Law firm representing Varga, said following the original decision about the clause in October.

Although Twitch has just lost an appeal against Varga, it’s worth bearing in mind that this decision bears no impact on the actual case when proceedings continue. The court still has to decide on the particulars from both Varga and Twitch before deciding whether to award damages or not.