Objection! #1: Activision v. West & Zampella

The videogame industry's a big business -- sometimes, companies don't see eye-to-eye. And what happens when a dispute goes to court, and gamers get their grubby hands on fancy-sounding legal documents? Why, wild, inane, forum-fueled speculation, of course. That's where California-based attorney and GameSpy writer Eric Neigher comes in. Objection! is your one-stop destination to learn what all that legalese means in plain English, straight from someone who knows the twisty-turny language of the law.



Cocky Kotick and the Dynamic Duo

Getting fired sucks; so does firing someone. The process is never pretty, and fortunately for those of us who make our living sucking the blood from honest Americans, it sometimes results in extremely contentious lawsuits!

Enter Activision CEO Bobby Kotick and his "take all the fun out of making videogames" approach to personnel management. If you haven't been living under Iraq (see what I did there?) for the past six months, you know Kotick and Co. recently kicked Infinity Ward top-brass Jason West and Vincent Zampella to the curb harder than Ed Norton did that kid in American History X. Accusations have flown, lawsuits have been filed, and a lot of misinformed gamers with their own agendas have tried to tell you what's really going on.

Well, wonder no more, fearless readers, for your friendly neighborhood gamer-lawyer is on the case!

Facts

Here's the setup: Activision fires West and Zampella (who, in turn, accuse Activision of sending jackbooted security officers to intimidate and harass other Infinity Ward employees) earlier this year. West and Zampella then sign on with the Creative Artists Agency (one of Hollywood's biggest talent agencies), file a lawsuit alleging (among other things) that Activision bilked them out of their not-insubstantial royalties for Call of Duty: Modern Warfare 2, and everybody shows everybody else how big his e-Peen is, like all gamers should.

So just last week, Activision filed a cross-complaint in California state court, alleging a bunch of wrongdoing by West, Zampella, and 50 "Roes." So's ya knows: "Roe" is a generic name for somebody who isn't specifically named in a court document, usually for privacy reasons (think Roe v. Wade), although in this case (according to the statement of facts in the complaint itself), it's because Activision doesn't even know who the hell they are.


Analysis

Anyway, let me give you an easy, plain-English breakdown of Activision's complaint, along with how much water I think it holds.

First, Activision is accusing West and Zampella of five things: breach of fiduciary duty, breach of contract for both their employment agreements and a separate Memorandum of Understanding (MOU), breach of the implied covenant of good faith and fair dealing, and declaratory relief.

The declaratory relief thing is just Activision asking a judge to say who owed what to whom, with regard to its agreements with West and Zampella, finally and for the record. This is a common request in contract cases, and the determination of it will be critical to how the case proceeds in the future, but there's not a whole lot to say about it right now, beyond "the judge needs to make a decision."


As for the other claims, breach of contract is a fairly obvious one: West and Zampella exchanged various promises with Activision with regard to their employment, and Activision says they broke those promises. The rub is that Activision is alleging that they broke "promises" in part made in an MOU -- which is pretty tenuous legal territory. Typically, an MOU is used by two parties who specifically wish to avoid entering into a contractual relationship; it's like having a formal statement saying "All right, you intend to do this, and I intend to do that, and we're just letting each other know that officially for information purposes, with absolutely no pressure or promise exchanged by either party." To me, this cuts Activision off at the knees, and I'm betting that the breach of MOU claim gets thrown out in summary judgment.

The case gets a little murkier with the breach of fiduciary duty and implied covenant of good faith claims. Breach of fiduciary duty usually involves somebody enriching himself through a form of fraud by taking advantage of his company's (or client's) trust -- in this case, Activision alleges that West and Zampella kept money for themselves that should have gone back, or been passed on to other employees (see below). In fact, while some of Activision's specific factual claims seem somewhat farfetched, the fiduciary duty breach is -- in my opinion -- one of their strongest claims. As for the breach of the implied covenant of good faith and fair dealing bit, this claim is usually brought when one side of the contract thinks the other side purposely used technicalities to avoid handling its duties, or intentionally avoided triggering contractual obligations in a cynical and deliberate way. Whether or not this claim is strong will depend a lot on whether the specific facts and circumstances of West and Zampella's employment are proven to line up on Activision's side or on theirs.