Twitch Interactive, Inc. v. Mango

Background

Twitch operates a real-time video service where streamers share live content and viewers communicate through chat. Users must agree to Twitch’s Community Guidelines and Terms of Service. The guidelines prohibit discrimination, harassment, and violence based on listed characteristics, and the Terms prohibit unlawful, defamatory, obscene, harassing, threatening, abusive, or otherwise objectionable content.

Twitch alleged that Mango and CreatineOverdose carried out or helped organize “hate raids” beginning in August 2021. The alleged attacks used fraudulent, bot-powered accounts to distribute obscene text, racial slurs, descriptions of violence against minorities, personal identifying information, and malicious links. Twitch also alleged that Mango participated in the raids, helped coordinate them through a third-party platform, swatted a transgender woman, and doxed other Twitch users. Twitch alleged that the conduct disrupted streamers, caused some victims to stop streaming, and required Twitch to spend resources investigating the attacks and developing technological and other responses.

Twitch permanently banned the defendants’ known accounts, but alleged that they evaded the bans by creating alternate accounts and changing their “hate raid code” to avoid detection. Twitch served the defendants through court-approved alternative methods. Neither defendant filed an answer or response.

Proceedings Before the District Court

Twitch moved for default judgment. The court referred the motion to Magistrate Judge Sallie Kim, who recommended granting in part and denying in part the motion. Twitch objected only to the recommendation’s denial of liability for fraud in the inducement—the alleged use of misrepresentations to persuade Twitch to allow the defendants to register accounts and access its services.

Because Twitch objected to that portion of the recommendation, Judge Tigar reviewed it de novo, meaning he considered that portion anew and reached his own conclusion. The court adopted the remainder of Judge Kim’s report and recommendation in full.

Fraud in the Inducement

The court explained that a fraud-in-the-inducement claim requires a misrepresentation, knowledge that the representation was false, an intent to induce reliance, justifiable reliance, and resulting damage. Federal Rule of Civil Procedure 9(b) generally requires fraud to be pleaded with particular details, although a person’s intent and knowledge may be alleged generally.

Judge Kim had concluded that Twitch did not adequately allege that the defendants intended to induce reliance or provide reasons showing that Twitch’s reliance was justified. Judge Tigar disagreed. He concluded that the heightened pleading requirement did not apply to intent and that intent to defraud could be inferred from circumstantial evidence.

The court relied on Twitch’s allegations that the defendants created new accounts after their known accounts were suspended or banned, were required to create accounts to participate in Twitch chat, had no intention of following the Terms of Service, falsely represented that they would comply with the Terms, and obtained access that Twitch would not have granted had it known their true intentions. The court found that these allegations sufficiently showed an intent to defraud.

The court also found that Twitch adequately alleged justified reliance. Twitch alleged that the defendants knew they had been barred from the platform and concealed their identities and other identifying information to create new accounts and conduct additional hate raids. The court therefore found that Twitch adequately pleaded the reasons supporting its reliance on the defendants’ representations. Because it reached that conclusion, it did not address Twitch’s alternative argument based on the law-of-the-case doctrine.

Disposition

The court granted Twitch’s motion for de novo determination and found that the defendants fraudulently induced Twitch to grant them access to Twitch services. It adopted the remainder of Judge Kim’s report and recommendation and granted default judgment against the defendants.

The court awarded Twitch $328,164 in damages, with interest compounded annually under 28 U.S.C. § 1961. It permanently enjoined the defendants, their officers, agents, representatives, servants, employees, successors, assigns, and others acting with them from using or accessing Twitch services; posting content prohibited by the Terms, including racist, homophobic, xenophobic, or other harassing content; or helping any individual or company engage in that conduct. The Clerk was ordered to enter judgment and close the file.