Contracts and Agreements Continue to be Contentious Within the E-Sports Community

In any business venture, contracts are essential to keeping and maintaining partnerships. Keeping the ins-and-outs of what each person’s responsibilities include can help to preserve expectations and keep morale high among those involved. Within the esports industry, however, contracts and agreements have remained contentious. In a previous blog, we had detailed how the esports industry was rocked by a recent lawsuit between Turner “Tfue” Tenney and his former esports organization Faze Clan. Now, Faze Clan has filed a countersuit against Tenney to block his attempts to allegedly disparage and leave the organization.

Faze Clan alleged Tenney violated his contract by disparaging the company and attempting to form a rival esports organization. In addition to these claims, Faze Clan stated Tenny made more than $20 million in streaming, gaming endorsements, and sponsorships, and that he, “shared almost none of this income with Faze Clan.” The business plans to seek compensation from Tenney for its services and unspecified damages under the terms of the contract. Faze Clan is also seeking injunctive relief to prevent Tenney from revealing any confidential information about Faze Clan, disparaging the company publicly, and potentially interfering with its current roster of talent.

In the initial suit filed by Tenney, he claimed Faze Clan failed to pay him his share of brand deal revenue and grossly undercut his earnings. Tenney’s suit also claimed Faze Clan had the right, according to Tenney’s contract, to take up to 80 percent of his earnings in certain situations; this, however, was denied by Faze Clan who claimed it had never done so.

The countersuit against Tenney alleges his actions have resulted in “serious damage,” that could affect members of Faze Clan’s team. In addition to this, the suit also claims Tenney’s goal is to set up a rival esports company, alleging that “Tenney is taking the valuable information he learned from Faze Clan, which he is obligated to keep secret, and using it to create a rival to Faze Clan or otherwise support rival gamers and gaming organizations.”

Tenney is very popular on the live-streaming platform Twitch and is one of the network’s most popular and subscribed-to streamers. He also happens to have more than 10 million subscribers to his YouTube Channel. Tenney initially signed with Faze Clan in April 2018. The contract specifically stated Faze Clan would receive 80 percent of all revenue Tenney made through sponsored video content on Twitch and YouTube. However, Faze Clan’s countersuit claims Tenney experienced a boost in popularity after partnering with them. This rise in online stardom is what helped him earn millions of dollars.

“Faze Clan taught Tenney how to be more than just a skilled gamer,” the countersuit reads. “Faze Clan taught him to be a professional. It schooled Tenney in the business, social media and gaming practices that have made Faze Clan successful. And he certainly has been successful. It is understood that Tenney has earned over $20 million since joining Faze Clan in April 2018, when he was earning virtually nothing.”

While both lawsuits are currently ongoing, it’s clear contracts and agreements within the esports industry will require further regulation and the assistance of experienced legal counsel in the future.

Houston Commercial Litigation Attorneys

 When a dispute arises, it can bring your entire business to a screeching halt. When this happens, your livelihood is in serious jeopardy. The commercial litigation lawyers at Feldman & Feldman have successfully handled business disputes for over 40 years. If you need legal advice regarding a business issue, contact the experienced attorneys at Feldman & Feldman today.

The Wild West of E-Sports Contracts and Agreements

The esports industry (also referred to as electronic sports, e-sports, or eSports) has taken off since the late 2000’s, and generally refers to organized, multiplayer video game competitions. The rise in popular live streaming services tailored to gaming, such as Twitch and Mixer, have only helped to catapult the esports industry into something that many have never quite seen before – including estimated audiences of 454 million viewers in 2019 and over $1 billion in revenue. Such growth within the esports and online gaming community has given rise to professional gamers. However, this acceleration of popularity and fame amongst these young players, combined with the utter newness of the esports industry, ultimately begs the question of how contracts and agreements among management are handled.

While many may be familiar with the popularity of the esports industry, they may be unaware it is functioning in a largely unregulated space. For instance, there is a lack of standardized contracts for professional players, no collective bargaining agreements, and no established standard working conditions. One player in particular who is quite familiar with this lack of regulation is professional Fortnite player, Turner ‘Tfue’ Tenney. Tenney recently found himself embroiled in a bitter contract dispute with his former esports team, Faze Clan. Tenney claimed a breach of contract occurred as well as unfair business practices during his time with Faze Clan.

In May of this year, Tenny’s lawyers filed a suit against Faze Clan arguing the Gamer Agreement or contract the parties agreed to back in April of 2018 was grossly oppressive, onerous, and one-sided in favor of Faze Clan. Amongst these claims, the suit alleges the Gamer Agreement contains unlawful exclusivity provisions and is in violation of California’s current agency laws, and that Faze Clan breached its fiduciary obligations owed to Tenny by unreasonably rejecting sponsorship deals. Tenney is seeking for the Gamer Agreement to be rendered void and unenforceable, and that Faze Clan should be required to disgorge and repay Tenney all the money he earned as a result of the Gamer Agreement.

The specifications within the suit detail Tenney’s complaints that the Gamer Agreement entitles Faze Clan to a finder’s fee of up to 80 percent of the revenue paid by third parties for Tenney’s gameplay. Additionally, it is alleged the Gamer Agreement contains certain anti-competitive provisions amounting to an unlawful restraint of trade. Specifically, the Gamer Agreement restricts Tenney to sponsorship deals exclusively sourced by Faze Clan and provides that Tenney cannot obtain his own deals without the prior written consent of Faze Clan.

Faze Clan have ultimately denied all allegations made by Tenney, and have released a public statement claiming it has not collected any of Tenney’s tournament winnings or non-esports related revenue. Faze Clan further states it has only received $60,000 in relation to the Gamer Agreement, while Tenney has made “millions” by association with the Faze Clan name. A key argument the team is expected to make is that Tenney voluntarily and lawfully signed the contract as an adult that he is now protesting.

Unfortunately, this will likely not be the only contract dispute case to emerge from the esports industry. While conventional professional athletes have a team of managers, agents, and even lawyers to protect their best interests, ensure proper pay, and a healthy work environment, this isn’t necessarily the norm for the esports world quite yet.

Houston Commercial Litigation Attorneys

For the dedicated commercial litigation lawyers at Feldman & Feldman, there is no adversary too big. Our legal team passionately pursues each case with skill and tenacity, but without the overhead of a large law firm. Contact the experienced attorneys at Feldman & Feldman today.

Do The National Association of Realtors’ Rules Stifle Competition?

It’s no secret that commission plays a big role when it comes to working in the sales industry. Not so different from servers or bartenders receiving tips as the majority of their pay, a sales commission is the additional compensation one would receive for exceeding the minimum sales threshold. However, what happens when sales opportunities are avoided because the expected commission is lower than most? For the National Association of Realtors (NAR), this situation is all too familiar.

Keller Williams, the Austin-based residential real estate company, is facing backlash for its training policies. This has resulted in a class-action lawsuit challenging the commission structure on home sales brokered by members of NAR. The case itself revolves around whether or not NAR rules stifle competition by requiring listing agents to say up-front exactly how much of their sales commission will be shared with buyers’ agents.

The sellers who initially brought on the lawsuit argued agents actually avoid listing and/or showing certain properties that offer lower commissions, which can create an environment that stalls commission rates at around three percent for each cooperating agent. However, the NAR and the brokerages named in the litigation have asserted the defendants are mischaracterizing the rules.

Keller Williams is a defendant in the newly filed class-action lawsuit that consolidated previously filed litigation in Minnesota, along with suits filed by a half-dozen other plaintiffs. The class action suit goes into greater detail than the original complaint, citing the NAR training of real estate agents at Keller Williams University as evidence agents have less incentive to show homes with low commissions.

If a judge decides to strike down the standard practice of splitting commissions, it could have the potential to save a homeseller thousands of dollars in commissions by forcing more buyers’ agents to negotiate their pay or shift their fees to buyers. It would also result in cutting the earnings of real estate agents across the country and put more pressure on traditional brokerages.

The class action complaint includes a script allegedly used to train real estate agents dealing with a seller who wishes to reduce the buyer commission to save money. “When you reduce the commission, you reduce the incentive for that agent to bring a buyer to your house,” the agent in the script explains, according to court documents. “If an agent has 10 different houses, nine of which come with a 3 percent commission, one of which comes with 2.5 percent commission, which houses do you think they’re going to show?”

While NAR defends its commission structure in federal court, the Department of Justice (DOJ) has opened its own investigation into real estate agent fees. In the investigation, the DOJ has demanded information from CoreLogic, a system that provides many real estate agents with platforms where they can share listings, known as multiple listing services. While the information in regards to whether or not multiple listing services prevent competition in the real estate agent fee structure has yet to be determined, it’s clear there is a long road ahead for the NAR.

Houston Commercial Litigation Attorneys

When a dispute arises, it can bring your entire business to a screeching halt. When this happens, your livelihood is in serious jeopardy. Business litigation is often very complex, making quick resolutions unlikely. For the dedicated commercial litigation lawyers at Feldman & Feldman, there is no adversary too big. We work closely with our clients to get them the best results. If you are facing any type of business dispute or commercial litigation, call Feldman & Feldman today to schedule a consultation to discuss your case.

Refusal To Settle Case Out Of Court Costs HISD $9 Million

Experienced business litigation lawyers know there is no one-size-fits-all solution to legal matters. Success and winning should be defined by the unique circumstances of each case. Sometimes the most successful resolution to a case is not a long and drawn out court battle, but a careful negotiation and settlement. This is a lesson the Houston Independent School District (HISD) just learned the hard way in a recent lawsuit. Although HISD had the option to settle a copyright infringement lawsuit for just $250,000 out of court, the district decided to pursue the case in court where a jury ordered it to pay a whopping $9 million.

The lawsuit started when DynaStudy, a two-person educational materials supplier, alleged HISD made four violations of federal copyright laws. DynaStudy proposed a modest six-figure settlement on multiple locations, but HISD refused. DynaStudy reportedly proposed a $250,000 settlement, which the district rejected, leading the supplier to file a lawsuit.

During the discovery process, DynaStudy found dozens of other brazen copyright violations. Evidence showed some teachers used white tape and sticky notes to cover copyright notices and one teacher even wrote in an email that she was “OK with violating” copyrights.

After refusing several settlement offers, HISD launched a three-year legal battle that culminated in a $9.2 verdict against the district. Additionally, HISD may be on the hook for DynaStudy’s attorneys’ fees, which could amount to an additional $1.5 million. The jury decided in DynaStudy’s favor after hearing how dozens of HISD employees repeatedly violated copyrights and distributed copyrighted material for ten years.

Securing A Successful Resolution with the Help of Business Litigation Attorneys

The reality is most business litigation cases are not decided in a courtroom. This doesn’t mean trials are always a bad strategy for resolution, but it highlights the importance of understanding what a successful resolution looks like for each client. Oftentimes, out of court settlements are the quickest and most cost-effective way to resolve a dispute. Taking a case to trial can also present serious risks, as seen in the HISD copyright lawsuit.

Business Litigation Attorneys

At Feldman & Feldman, our business litigation attorneys put our clients’ interests first. We can explain your legal options and the benefits and drawbacks of each option. Our attorneys will help you make an informed decision about resolution strategies and continuously fight for what’s right for you. Contact us today to schedule an appointment with one of our experienced attorneys.

Phony Invoices Led To $4 Million Breach of Fiduciary Duty

Companies often utilize contractors to help complete jobs and fill gaps in their workforce. While this creates a mutually beneficial relationship, some individuals will abuse it. This was the case for an investment company that discovered one of its contractors was creating phony invoices totaling $4 million.

Forest Investment Associates filed a lawsuit against a couple the company alleges defrauded them by creating phony invoices. The couple worked at Kingwood Forestry Services, which was frequently retained by Forest Investments. The wife worked as an administrator and her husband worked as a contractor. The couple would submit invoices for work that was never performed, which would in turn be paid by Forest Investments and its clients. Because the wife worked in administration, she kept an eye on all of the false invoices and made sure the amounts were not too suspicious so as to raise eyebrows. The scheme, which began in 2011, totaled $4 million worth of false invoices. Forest Investments has filed a lawsuit against the company for breach of fiduciary duty.

Protecting Your Business

No business exists in a vacuum. Businesses rely on other companies and individuals to operate. These relationships need to be carefully and thoroughly defined by contracts to help prevent disputes. When a dispute or outright fraud does arise, business owners have the right to seek compensation for economic damages. While many types of fraud bring about criminal charges, the criminal prosecution will not provide any financial compensation for wrongdoing to the victims.

Businesses that are victims of fraud can seek compensation directly related to the fraud and can pursue damages for harm done to their reputation. Because these matters can be extremely complicated, it’s important that only experienced business fraud attorneys handle them.

Texas Business Fraud Attorneys

At Feldman & Feldman, our Texas business fraud attorneys fight aggressively for our clients. We understand how business fraud can impact your company, so we work to get your legal issues resolved quickly. To learn more about your legal options, contact us today to schedule an appointment with one our lawyers.

High-Speed Rail Facing New Legal Challenges

Texans have long hoped for a high-speed rail to make travel easier and quicker. High-speed rail projects have faced significant legal hurdles in past years, but one unique hurdle is halting the high-speed rail project to connect Dallas and Houston.

One of the biggest hurdles for high-speed rails across the country is they cannot run on the type of train tracks already present. This means new tracks have to be laid for high-speed rails, which led to the first legal hurdle. In order for new tracks to be laid, land on which to lay the tracks has to be acquired. While the government can use its eminent domain authority to take land, many landowners put up a fight. This is not uncommon for projects of this type, but landowners are trying a new argument that could stop the project in its tracks.

A judge in Leon County, Texas recently ruled that the company trying to build the high-speed rail is not railroad company, and therefore it cannot force landowners to sell their land to make way for its tracks. The company does not operate any railroads or own any trains, leading the judge to determine it does not have eminent domain authority. This is where the dispute becomes complicated. Companies depend upon eminent domain in order to develop tracks necessary not only for operation, but also to help them meet the legal definition of being a railroad company. However, eminent domain is not granted unless a company is already legally a railroad company.

What To Do When Legal Challenges Arise

The high-speed rail isn’t the only project facing nuanced legal challenges. Everyday business owners find themselves embroiled in legal disputes that hinge on hyper-technical legal definitions and court rulings. When these legal challenges arise, it takes an experienced business attorney to successfully navigate and resolve the dispute.

Texas Business Attorneys

At Feldman & Feldman, we’ve successfully handled many complex commercial litigation issues. We utilize our experience to find strategic solutions that work best for our clients. Whether we are representing clients in court or around the negotiating table, we aggressively fight to protect their interests. If you would like to schedule a consultation with one of the Texas business attorneys at Feldman & Feldman, contact us today.

Was There A Breach In Fiduciary Duty In The Taco Cabana Empire?

When Felix Stehling opened the first Taco Cabana restaurants in 1979, he likely didn’t anticipate how quickly the restaurant would grow. While Stehling had a number of successful restaurants and businesses before Taco Cabana, the little taco shack would be the one that cemented him in the culinary history books. Sadly, the current status of the Taco Cabana empire is nowhere near what it used to be, and Stehling’s stepson alleges that’s due to a breach of fiduciary duty.

Stehling passed away in December 2012. At the time of his death, his assets were valued at approximately $20 million. Fast forward seven years, and there is little left. Stehling’s stepson and heir has filed a lawsuit against Stehling’s longtime investment advisor claiming the fortune was squandered by over-leveraging the assets to generate cash.

While the investment advisor has been accused of fraud and self dealing, he has pointed to other causes for empire’s decline. The planner blames the trouble on the 2008 financial crisis and poor investment decisions made by Stehling in the years leading up to his death. However, what makes this fiduciary liability case particularly interesting is an arbitration agreement over twenty years old.

When Stehling hired the investment advisor in the 1990s, he signed an arbitration agreement. The financial advisor has asked a judge overseeing the case to dismiss the claim stating all disputes must be resolved through arbitration as agreed to in the original contract. For his part, Stehling’s stepson has fought against arbitration proceedings because the agreement was only between the investment advisor and his stepfather. He never agreed to such an agreement.

Fiduciary Duty With Financial Advisors

Fiduciary duty has a broad and complicated legal definition. Because of this, disputes between financial advisors and their clients can be come complicated. Matters can be complicated further if the parties agree to arbitration agreements like the one used by Stehling.

If you believe your financial advisor has breached his or her fiduciary duty, do not wait to call Feldman & Feldman today. Our fiduciary duty attorneys are experienced trial lawyers and litigators that can help you hold fiduciaries accountable for financial losses they cause. Contact us today to schedule an appointment.

Monster Jam Launching Monster Lawsuit Against Toy Giant Mattel

When companies work together for years or even decades, a variety of issues can arise out of the agreements made and deals struck. When one company or business decides to part ways by ending the relationship, the resulting split has the potential to turn into a legal nightmare for both parties. In one such recent business divorce, the resulting lawsuit involves a myriad of commercial litigation issues.

The Battle of the Monster Trucks

A recent case between the company that owns MONSTER JAM® and toy manufacturer Mattel undoes a 20-year partnership between the two companies. In July 2018, Feld Motor Sports – the parent company of MONSTER JAM® – alerted Mattel it planned to end their long-standing relationship. While the details of the decision to dissolve the partnership are unknown, Feld Motor Sports had licensed the Monster Jam name and logo to Mattel since 1999, with Mattel serving as the sole producer of official MONSTER JAM® toy trucks and other merchandise.

In a lawsuit filed late December 2018 (Feld Motor Sports, Inc. v. Mattel, Inc.), Feld claims Mattel infringed on its trademark by producing its own line of toy monster trucks with remarkably similar styles, names, and colors, alleging they are “virtually identical in shape and construction.” The lawsuit even claims Mattel repurposed the molds it created and used for decades manufacturing the MONSTER JAM® trucks in a gross violation of trademark laws. Additionally, Mattel announced in November it planned to hold its own event, titled “Hot Wheels Monster Trucks Live,” which is a near perfect copy of Feld Motor Sports’ MONSTER JAM® event.

In addition to trademark infringement, Feld alleges Mattel chose not to complete the remainder of the licensing agreement in good faith by failing to supply retailers with their requested supplies of MONSTER JAM® products, resulting in a significant decline in sales for Feld Motor Sports in the third quarter of 2018 versus the same quarter in 2017. Feld claims Mattel “secretly and deliberately undersupplied MONSTER JAM® products” while still remaining the exclusive licensee, and therefore unlawfully blocked market access to the products.

Because of the long history between the two companies, litigation over these issues is sure to prove contentious, with claims ranging from trademark infringement to licensing issues to breach of contract. The issues involved can affect a wide-range of businesses, and the case merits close attention as it continues to unfold.

Commercial Litigation Attorneys in Houston

The commercial litigation lawyers at Feldman & Feldman have successfully litigated business disputes for over 40 years, and one of our founding partners, Cris Feldman, has significant experience in commercial litigation. If your business is facing issues with a partner or vendor, find out how we can help resolve those issues either in or out of the courtroom. Contact us today for a consultation.

Texas Liquor Giant Fighting The Texas Alcoholic Beverage Commission

If you happen to live in Texas and are over the age of 21, you’re likely familiar with the liquor chain Spec’s. While Spec’s carries a plethora of options for wine, beer and spirits, you can also go there to get other necessary items for a get together or holiday party, including food and paper goods. What you may not know about Spec’s is their ongoing legal troubles with the Texas Alcoholic Beverage Commission (TABC) and how they feel they have been wronged by the organization as a whole.

Spec’s Wine, Spirits and Finer Foods, Texas’ largest liquor chain recently announced it would be suing the Texas Alcoholic Beverage Commission (TABC) for abusive regulatory overreach. This comes after a two year long enforcement action that led to administrative proceedings in 2017, according to court documents.

The federal lawsuit alleges TABC “wrongfully and maliciously” attempted to extort money from Spec’s. According to the liquor giant, this was done by threatening to effectively shut Spec’s down or by making the business pay more than $700 million in civil penalties.

Last year during a rebuke of TABC, administrative law judges said the agency failed to prove dozens of allegations and chastised TABC for failing to disclose evidence to their own witness and the court. The judges also stated the agency was “stacking” charges, a tactic commonly used to pressure defendants into settlement. In the end, the judges determined no fines should be assessed against the liquor chain.

Currently, Spec’s is seeking an unspecified amount of monetary damages, including lost profits, more than $1 million in attorneys fees, and harm to its reputation. The lawsuit also alleges TABC provided false testimony during the spring proceedings.

Complex Litigation Attorneys

For the dedicated complex litigation attorneys at Feldman & Feldman, there is no adversary too big. Our legal team passionately pursues each case with skill and tenacity, but without the overhead of a large law firm. For the legal team at Feldman & Feldman, each case is unique and there is no one-size-fits-all solution. If you are facing any type of complex business dispute or commercial litigation, call Feldman & Feldman today to schedule a consultation to discuss your case.

How Title Insurance Works

If you want to buy a house, you’re going to need title insurance, but very few homeowners know what title insurance is or how it works. This is a shame because while title insurance is very rarely needed, it can protect homeowners from huge financial losses.

What Is Title Insurance?

Anytime an individual decides to buy or refinance a house, they will have to get title insurance. Title insurance is a type of insurance that protects buyers and lenders from financial loss if ownership of the property or title is challenged. Title insurance was created over one hundred years ago when dishonest individuals would sell property they didn’t actually own. With the rise of the Internet, determining whether or not a seller actually holds the title to the property is much easier, but unfortunately, not foolproof. Although every homeowner will purchase title insurance, very few are actually aware of their rights if they need to submit a claim.

The Rising Cost Of Title Insurance and Bad Faith Claims

You would think that because technology has made searching for information about property titles easier that title insurance would become less expensive. However, prices for title insurance are actually increasing. One of the largest title insurance companies, First American, has actually doubled its prices over the past decade. This is easy for title insurance companies to do, because most states have laws in place preventing other insurance companies from offering title insurance. This means the title insurance market is small and faces little competition. In total, title insurance is an $18 billion industry.

Not only are the costs of title insurance rising, but many policyholders are also discovering the hard way that title insurance companies often use bad faith tactics to avoid paying out on claims. Like any other type of insurance, a title insurance company’s first objective is to make money, and some companies take this objective too far by wrongfully denying valid claims. Unfortunately, many policyholders are completely unaware of their rights and accept the claim denial at face value.

Get Help With You Title Insurance Claim

Buying any type of property is a huge investment, so before you sign on the dotted line, it’s important to make sure all related contracts are fair. At Feldman & Feldman, we can review title insurance policies to make sure they provide proper coverage. If property has already been purchased, we can help with any title insurance disputes. Call us today to schedule an appointment to learn how we can help.