Valve sued lawyers behind arbitration claims
Valve used to prefer arbitration because few consumers filed lawsuits and the process kept the company's legal costs down. But in October 2023, Valve sued a law firm in an attempt to stop it from filing a bunch of arbitration claims on behalf of players.
Valve's lawsuit complained that “unscrupulous attorneys” from the Zaiger, LLC law firm presented a plan to a potential funder “to recruit 75,000 customers and threaten Valve with arbitration on behalf of those customers, thereby exposing Valve to potentially millions of dollars in arbitration fees alone: 75,000 potential arbitrations multiplied by $3,000 in arbitration fees is two hundred and twenty-five million dollars“.
Valve said Zaiger's “extortionist plan” was to “offer a deal slightly less than the [arbitration] charge: $2,900 per claim approximately, attempting to induce a quick resolution.”
“Zaiger targeted Valve and Steam users for his plan precisely because the arbitration clause in the SSA [Steam Subscriber Agreement] is 'favorable' to Steam users in the sense that Valve agrees to pay the fees and costs associated with arbitration,” Valve said.
Zaiger has a “Steam Claims” website that says: “Tens of thousands of Steam users have hired Zaiger LLC to hold Steam owner Valve accountable for inflated PC game prices.” The Website said that through arbitration, “many consumers receive compensation offers without doing anything more than completing the initial form.” Another law firm called Mason LLP used a similar strategy to help gamers file arbitration claims against Steam.
There had not previously been many arbitration cases against Steam, according to Valve's lawsuit against Zaiger. “In the five years before Zaiger began threatening Valve, from 2017 to 2022, there were only two cases where Valve and a Steam user were unable to resolve that user's issue before proceeding to arbitration. Both arbitrations were ruled in favor of Valve, and Valve paid all arbitrator fees and costs to both Valve and the affected Steam user,” Valve said.
Valve's lawsuit against Zaiger was dismissed without prejudice on August 20, 2024. The ruling by the U.S. District Court for the Western District of Washington said the case was dismissed because the court lacks jurisdiction over Zaiger.