I like computer games, and I like defamation law, but when the two collide the result is never your-chocolate-in-my-peanut-butter goodness. Whether it's flailing developers or consumer movements apparently schooled in jurisprudence via a distracting hand gesture and a shovel, game culture makes bad legal culture.
This story is not a departure from that trend.
Star Citizen is an ambitious crowdfunded space sim under (lengthy) development. Like many highly anticipated games, it has fanatical devotees and critics. Recently it drew the unwanted attention of Derek Smart, a name familiar to old gamers like me.
Who is Derek Smart? He's the Orly Taitz of computer gaming. He's a game developer — technically — and a career lawsuit-threatening troll. His team of lawyers is like a fundamentalist preacher's God: they're frequently invoked to terrify, but their existence mostly taken on faith. He's a multi-millionaire, apparently, but then so are Carrot Top and that awful TV woman with the eight cute kids. It's been a long time in American culture since self-made wealth signified someone to be taken seriously.
Anyway, hearing of crowdfunder complaints about the awaited Star Citizen, Smart criticized it. He invoked his vast experience in having produced the Howard The Duck, the Edsel, the New Coke of space sims, a monstrosity called Battlecruiser 3000AD, which is distinguishable from a computer virus in that it was promoted more douchilly. When Star Citizens' developers failed to respond with the adulation to which he is entitled under natural law, Smart characteristically waded in with extravagant and self-promoting lawsuit threats. Smart styled himself a crusading consumer advocate, which would be an apt label if Ralph Nader had appeared before Congress and said "Mr. Chairman, these vehicles are unsafe at any speed. And now, I invite Congress to admire my balls. RELEASE THE LAWYERS."
Controversy and flamboyant figures mean clicks, and gaming-website The Escapist wanted some of that action. They published a hit piece portraying Cloud Imperium Games (developers of Star Citizen) as awful employers driving a doomed project, and sourced it to both unnamed and anonymous sources.
Chris Roberts, CEO of Cloud Imperium, responded by posting a five-page legal threat from his "Co-Founder, Vice-President, and General Counsel" Ortwin Freyermuth, a California lawyer. Mr. Feyermuth argues rather convincingly that Escapist has become the tool of some unnamed evil (Smart, one assumes) and has seriously wronged the company by (for instance) not grasping that more than one person can tell the same lie at once, and by taking a blacked-out ID card as proof that a "source" works for a company that does not, technically, use ID cards.
If he had stuck with the factual refutation, Mr. Freyermuth would have done well. But he had to go and (sort of) act like a lawyer. His letter is full of quasi-legal references, has a closing threat to file suit in both America and the United Kingdom, and includes a cc: to two lawyers. And so Mr. Freyermuth stepped in it.
Freyermuth is a founder, Vice-President, and in-house lawyer. He's a fact witness to what's going on at Cloud Imperium. When he writes a five-page semi-legal rant, he's just creating cross-examination fodder. Moreover, "look, I am referencing lawyers, and even cc'd them" doesn't convince anyone who knows how litigation works. If competent outside litigators are substantively involved, they write the threat letter, not the personally-involved fact-witness client. "Do what I want or I'll bring in our outside counsel" and "look at me cc'ing lawyers" is the "my brother will beat you up" of the business world. Freyermuth cc'd the head of the Litigation Department in the Los Angeles office of Cooley LLP, an 800-lawyer firm. Dropping his name signifies that (a) he's citing a big scary lawyer to seem serious even though the lawyer is not substantively involved, so he should not be taken seriously, or (b) the head of LA litigation for Cooley is involved, but has no client control whatsoever because his client is writing five-page rants, which means the client is not to be taken seriously, plus (c) if Cooley is actually involved it signifies that Cloud Imperium is going to spend a truly stupid amount of money to pursue a defamation case against a hit piece that doesn't actually impact its core function, right at the time that it's fighting rumors that it is in financial trouble. So: some messaging issues.
If you know what you're doing, you bring in the litigators before you start running your mouth. The litigator is there to tell you, in the most supportive and affirming way possible, to shut the fuck up. That way your CEO and key fact witness isn't writing long, angry emails about the facts of the situation, probably getting some of them wrong and probably saying things the legal significance of which he doesn't know. It's not easy to tell the CEO to shut up and stop writing things if you're his underling. Some people get to be CEO by having a Trumpian level of self-regard that makes Derek Smart look like Dobby the House Elf. If you're a sensible GC, you use your outside litigator as the bad cop to control your difficult executive. That way your executive doesn't do don't-take-me-seriously things like post angry messages referring to written statements as "slanderous."
Plus, while Freyermuth makes a fairly convincing case that the Escapist was gullible, that's not the relevant standard. The company, and Chris Roberts, are almost certainly public figures, or at least limited-purpose public figures in the gaming world. That means they'd have to prove actual malice to win a defamation case. Constitutional "actual malice" doesn't mean ill-will, as Freyermuth's letter seems to imply. It means knowledge that the statement is false, or reckless disregard for the truth — that is, publishing despite serious doubts about its truth. Cloud Imperium isn't going to satisfy that standard.
Finally, the threat to sue in the United Kingdom is an empty one unless the Escapist has assets there. It's much easier to get a defamation judgment in the UK, but fortunately under the SPEECH Act such judgments aren't enforceable in America unless the plaintiff's case satisfies the requirements of American law — which it won't.
Look, Cloud Imperium, here's some free advice: leave the next-I-call-my-lawyers routine for Derek Smart. Stick to factual refutations without legal bluster, or else shut up and get your scary lawyer to write the letter. The middle ground makes you look foolish.
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