Twitch Interactive, Inc. v. Fishwoodco GmbH

Background

Twitch Interactive, Inc. petitioned to confirm three JAMS arbitration awards issued against Fishwoodco GmbH, doing business as Loots, and to obtain a judgment based on those awards. Twitch alleged that Loots violated Twitch’s terms and policies, infringed Twitch’s intellectual-property rights, and interfered with contractual relationships. Loots initially participated in the arbitration but later stopped responding and did not defend against Twitch’s motion for default judgment in the arbitration.

The arbitration tribunal entered a January 4, 2021 default judgment awarding $1,488,000 in damages and permanent injunctive relief. It later awarded $59,165.36 in attorneys’ fees and $16,010.83 in costs. On February 25, 2022, the tribunal amended the injunctive relief to identify Loots Media GmbH, Fuehnen Holding GmbH, Marc Fuehnen, and certain website operators as among the persons or entities covered by the restrictions.

In the federal case, the Clerk entered Loots’s default after Loots failed to appear. Loots Media GmbH, Fuehnen Holding GmbH, and Marc Fuehnen—referred to as the “Loots Movants”—asked for permission to file an amicus brief opposing Twitch’s petition. Twitch opposed that request. The opinion states that the court served Loots by email and social media under an earlier order permitting alternative service.

Reassignment and jurisdiction

Because not all parties consented to the magistrate judge’s jurisdiction, the court ordered the Clerk to reassign the case to a district judge. The opinion found subject-matter jurisdiction under diversity jurisdiction and the New York Convention, an international treaty governing recognition and enforcement of certain arbitration awards. It also found that personal jurisdiction over Loots was supported by more than Loots’s agreement to arbitrate in California, including Loots’s participation in the arbitration.

Amicus-brief motion

The court recommended that the motion for leave to file the amicus brief be denied. It explained that an amicus, or “friend of the court,” is not a party and generally may not take over a party’s role or expand the issues. The court found that the proposed brief exceeded that limited role because the Loots Movants sought, in substance, to obtain vacatur—setting aside—of arbitration awards that affected their interests, while presenting a highly partisan factual account.

Default judgment and confirmation

The court recommended that Twitch’s motion for default judgment be granted. Under the federal default-judgment rules, a court may enter judgment when a party fails to plead or otherwise defend. The court considered the relevant factors, including prejudice to Twitch, the merits and sufficiency of the petition, the amount at stake, the possibility of factual disputes, whether Loots’s default resulted from excusable neglect, and the policy favoring decisions on the merits.

The court concluded that most factors favored default judgment or were neutral. It found that Twitch would likely be left without a remedy if judgment were denied; that Loots had been served and had ample opportunity to defend; and that there was no indication Loots had challenged the arbitration agreement, the arbitration proceedings, or the arbitrator’s authority. The court also found that the New York Convention applied because the awards arose from commercial agreements involving a U.S. party and a party said to be a German citizen or company.

The court explained that review of an arbitration award under the Convention is limited. An award generally must be confirmed unless the opposing party establishes one of the Convention’s narrowly construed defenses, such as lack of proper notice, an invalid arbitration agreement, an award outside the scope of the arbitration, an improper arbitration procedure, or an award that was not binding or had been set aside. Because no one appeared or responded on Loots’s behalf, the court found no basis to conclude that any such defense had been established.

Recommended relief

The court recommended confirming the arbitration awards in their entirety, including $1,488,000 in damages and $75,176.19 in attorneys’ fees and costs. It also recommended confirming the permanent injunction prohibiting Fishwoodco GmbH, doing business as Loots, and the listed officers, agents, representatives, employees, successors, assigns, entities, individuals, and website operators from using the TWITCH marks or confusingly similar marks; using or accessing Twitch services, including through knowing use of intermediaries; or displaying, or causing others to display, advertisements through Twitch services in violation of applicable legal terms.

The court further recommended granting Twitch’s request for post-award, prejudgment interest at the statutory rate under 28 U.S.C. § 1961(a), calculated from February 25, 2022, and post-judgment interest at the statutory rate from the date judgment confirming the arbitration awards was entered.

Disposition

The opinion ordered reassignment to a district judge and recommended that the newly assigned district judge deny the Loots Movants’ motion for leave to file an amicus brief and grant Twitch’s motion for default judgment. It stated that any party could file objections within 14 days after being served. The text provided is a report and recommendation and does not show the final district judge’s ruling.