Activision going after EA in West-Zampella suit, seeking $400 million

Publisher believes rival company induced Infinity Ward cofounders to break contracts during development of Call of Duty: Modern Warfare 2, EA dismisses suit as "a PR play filled with pettiness and deliberate misdirection."

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Perhaps the biggest news of 2010 was Activision's firing of Infinity Ward heads Jason West and Vince Zampella, even after the pair helped produce the blockbuster hit Call of Duty: Modern Warfare 2. Those terminations led to an ongoing saga that saw mass defections from developer Infinity Ward, the creation of West and Zampella's new studio Respawn Entertainment, and a volley of litigation between the pair, Activision, and current and former Infinity Ward employees.

Activision is taking aim at a new target in the West-Zampella suit.

As 2010 draws to a close, the story is receiving one more plot twist. Activision today told GameSpot it asked a federal judge for permission to file an amended cross-complaint in its legal spat with West and Zampella. In addition to expanding on its claims against the pair, Activision wants to make Electronic Arts a defendant in the case. According to a copy of the cross-complaint provided by the Call of Duty publisher, Electronic Arts tampered with West and Zampella, inducing the pair to break their existing contracts with Activision, freeing them to establish Respawn and sign with the EA Partners program.

According to the cross-complaint, "Starting as early as July 30, 2009, Electronic Arts and [West and Zampella]--with full knowledge that the executives were under contract and legally committed to Activision for more than two additional years--conspired to set up an independent company."

It continued, "The unlawful conduct came from the highest levels at Electronic Arts, including EA Chief Executive Officer, John Riccitiello, and Chief Operating Officer, John Schappert, with direct support from the high-profile talent agency, Creative Artists Agency, and even a former member of Activision's Board of Directors and former Activision lawyer."

The cross-complaint, which EA declined to comment on, alleged a number of shady dealings between EA execs and West and Zampella. Specifically, it referenced an e-mail exchange between West and Schappert, in which the EA COO said he was thrilled to have a "super secret way into Jason."

As a result of the exchange, brokered by CAA agent Seamus Blackley, West and Zampella were flown to Riccitiello's home by private jet on August 28, 2009, for a meeting with the CEO. The pair later admitted that at said meeting, they told the executive that they had over two years remaining on their contract with Activision.

The suit further focused on Harold Brown, a former board member of Activision and attorney who represented West and Zampella at the behest of CAA. A scan of an e-mail purportedly from Blackley to Zampella read, "[Brown] was the one I mentioned in the context of taking a look at your deal as a sanity check. So I mentioned to him that there might be a big developer who'd want someone good to take a look at an agreement, wink wink, and he was VERY INTERESTED." (Emphasis in the original.) The e-mail is dated August 19, 2009.

The suit notes that Brown would have had prior knowledge of Activision's incentive practices and suggests CAA brought him in to cloak negotiations with EA under an attorney-client privilege. The only direct tie alleged between Brown and EA in the non-redacted sections of the cross-complaint is that the former was a law school classmate of an EA executive.

In the cross-complaint, Activision is seeking $400 million in actual and punitive damages from EA, West, and Zampella, "including profits Activision would have made but for EA's interference, costs incurred in rebuilding the affected studio, and damages suffered as a result of delays and disruptions." Activision also hopes "to recapture compensation previously awarded to its faithless executives," to unseal a number of documents that have been deemed confidential, and to prevent EA, West, and Zampella from benefiting from their allegedly illegal conduct. It is unclear if the formation and operation of Respawn would count as "benefiting."

Though this is Activision's first attempt to include its rival in the suit, Electronic Arts has been alluded to essentially from the dispute's beginning. In Activision's original countersuit against West and Zampella, the publisher accused the two of embarking "on a secret trip by private jet to Northern California, arranged by their Hollywood agent, to meet with the most senior executives of Activision's closest competitor."

[UPDATE] The new suit goes on to allege that as a result of their negotiations with EA, West and Zampella began to act "in a manner that was in breach of their contractual and fiduciary obligations to Activision." This behavior allegedly includes providing "confidential and proprietary Activision information" to Electronic Arts, as had been alleged in Activision's prior countersuit.

The suit contends that "West and Zampella made exceedingly aggressive demands to Activision to enrich themselves at the expense of Activision's shareholders, including that they be permitted to 'spin out' from Activision, set up their own independent company and produce games on terms that were far less favorable to Activision than the terms of West's and Zampella's existing exclusive employment agreements that…had years left to run and for which they received tens of millions of compensation."

If true, one example of insubordinate behavior may come as a shock to Infinity Ward employees past and present. The suit alleges that "West and Zampella's self-interest in executing their secret plan to leave Activision corrupted their judgment so fully that they actually attempted to damage the very Infinity Ward employees they purported to lead. In July 2009, West and Zampella were asked by Activision management to provide the names of the Infinity Ward employees that should receive millions of dollars of Activision stock grants in connection with the development of a Wii version of Call of Duty 4: Modern Warfare. West and Zampella adamantly refused."

The complaint continues, "Again, in October 2009, when Activision planned to include Infinity Ward in its annual equity grants, West and Zampella refused to provide Activision with a list of the names it needed of the Infinity Ward employees that deserved awards of valuable stock and options. In responding to the President and CEO of Activision Publishing concerning the equity grant, West wrote, 'You can give all the options to Vince and I… ,' thereby depriving their own Infinity Ward employees of additional compensation."

[UPDATE 2] EA has now responded to the lawsuit. Jeff Brown, EA's vice president of corporate communications, dismissed it, saying "This is a PR play filled with pettiness and deliberate misdirection. Activision wants to hide the fact that they have no credible response to the claim of two artists who were fired and now just want to get paid for their work."

Discussion

732 comments
thiagorulez
thiagorulez

Well, that's the nature of the beast, I suppose. With these big companies, a titanic struggle is to be expected now and then. Especially where EA is concerned. No one is ever surprised when someone goes after them. Thiago | www.albarell.com

elijed23
elijed23

That is a lot of money. Glad to know http://electriciankc.com/ isn't involved with things like that. Jeff Brown really put them in their place. I am eager to see if this lawsuit goes through. 

AceCometh
AceCometh

That's a lot of money. And what ever happened to "Employment at Will"?

ricardo-sene
ricardo-sene

@Calo1224 If you don't care about broken contract, don't complain when your internet cable operator doesn't maintain your signal on...

nyran125
nyran125

i guess the only answer to this question would be to find out what the real reason Activision fired IW in the first place.

Cal12
Cal12

-From what I'm getting, EA plotted to break away the two heads of Infinity Ward who were under contract to Activition, thus harming Activition and harming Infinity Wards and its employees who had already previously been denied the awards they deserved for multi million dollar projects they helped establish. I don't really care about the contract being broken, but not giving awards to those who deserve it kind of makes me a bit annoyed for those people. Unless there is something Activision is not telling us- Come on, dude. That's like complete naivety on your side to believe Activision out of the blue here. Activision has repeatedly shown the kind of company they are in the last year. What would stop them from making this crap up as well?

peptido
peptido

Doesnt sound like they planned to break the contact to me. They had 2 years left would have likely spent that time working on modern warfare 3. Before the 2 years expired Activision would have come to them for renewal so they could start thinking about IW's next project. EA could argue they were just letting West and Zampella know they were interested and to think of them when renewal time came up. But if that whole bit about refusing to give names of employees who deserved compensation went down the way Activision makes it sound, West and Zampella aren't entirely without sin.

ElisabethinCA
ElisabethinCA

Just because they were flown out to meet w/ a possible new employer during a time they were supposedly "happy" where they were, doesn't mean anything. In any business employers fly out on their dime, lunch, meet, call, court executives they are interested in whether said executive(s) are happy where they are or not. It's called head hunting and it is a widely done practice in business. That is how you get the best of the best... At that level, you head hunt…not search through resumes. Businesses constantly vie for the crème de la crème of employees at the top levels. ”It has to be true that they were trying to screw the employees out of their due compensation”..."because they can't lie in court documents, they would get sued for libel". Wrong! It is done ALL the time. Just because something isn’t true doesn't mean anything in business or in the judicial system. Whatever is needed to get ahead/win is fair game. The sentence that supposedly proves that they were trying to keep all the compensation for themselves ends with "just give it to us"...how do you know they don't say afterwards "we will distribute it as we know who deserves what and why" or something similar..So never judge a book by its cover.. Now could all the supposition be true? Of course…but I for one will wait until I see all the evidence…and not hearsay but actual written evidence. Believe none of what you hear and only half of what you see.

theunseenblade
theunseenblade

i don't care as long as they keep making good games, and pressured into rushing it out for release. (evil eyes at activision)

weskeni20
weskeni20

I want EA to win this round like seriusly i know they are greedy they are no different from Activision But whats gonna Hapend is that Respawn would try to make a COD KILLER who better to do that the guys who started it all...

fantasyfacade
fantasyfacade

From what I'm getting, EA plotted to break away the two heads of Infinity Ward who were under contract to Activition, thus harming Activition and harming Infinity Wards and its employees who had already previously been denied the awards they deserved for multi million dollar projects they helped establish. I don't really care about the contract being broken, but not giving awards to those who deserve it kind of makes me a bit annoyed for those people. Unless there is something Activision is not telling us :o

Dominicobaggio
Dominicobaggio

@dragonblader117 @swmdwn Its neither good nor bad, doesnt affect us at all really. It may just result in contracts becoming stronger which will mean big companies can keep hold of talent easier keeping the big games under their umbrella. Unlikely though. As for an explanation What has happened is the guys made the game cod. Lets call them the CODS They were getting a lot of money, they wanted more money since Activision was making squillions. They say they were fired and then started a new company with EA after they were fired. Activision say they fired the CODS then found out they WANTED to be fired, it was all a plan to get out of the work(contract) they had to do. Activision say the CODS wanted to work for EA and had met with them before and they have evidence to prove it. EA then gave the CODS all they had been asking for from activision as long as they now make games for EA. One bit of evidence Activision gave was that the 2 CODS met up with EA while still working for activision which the CODS admit!! Why were they meeting EA while under contract if they were quite happy with Activision?

-HaloHitman-
-HaloHitman-

I like how gamespot put's a review at the end of articles :p

hyttenhoof
hyttenhoof

@swmdwn well, It's good in the sense that EA might lose 400 millions... it's bad in the sense that Activision might get 400 millions...

linkinparkrox11
linkinparkrox11

Evil Disney owned Electronic Arts vs. Always Money Grubby Activision! Who will win???

KuRf
KuRf

COD, Call of Duty on the one side. The Sims on the other? Who will win??? Simish or Diminish?

starduke
starduke

It's like watching two giants getting into a slap fest instead of trying to rip each others limbs off.

swmdwn
swmdwn

*scratching my head*.....can somebody explain this to me? Is this good for gamers?

dragonblader117
dragonblader117

I think i might have to hire a lawer just to explain this to me.

dragonblader117
dragonblader117

[This message was deleted at the request of the original poster]

maxwell97
maxwell97

@somestupidloser: "All of a sudden, EA looks like the good guys for once." How so, exactly? If these allegations are true, they worked with Infinity Ward to do an end-run around their contract with Activision, EA's competitor. That's not exactly a respectable business practice.

Dominicobaggio
Dominicobaggio

@mos2000 i agree the second sounds more plausible but im just suprised at everyone jumping to agree with that 100% we dont know for sure. Its interesting to see what happens. As for the bonus they talked of i thought it was for the work on COD titles. The guys admitted they were flown out for chats with EA. What was that about? Why if they were so happy with their work and bonus were they doing that? At the least they were already looking for other options. Whatever the outcome its going to be interesting considering the amount of money, you have to remember its more than a lot of filmstars get now. Game programmers are the new rockstars lol! Interesting topic.

Darthree
Darthree

i wonder wat awesome game will be released by EA and Respawn maybe an awesome first person game based on future events

somestupidloser
somestupidloser

All of a sudden, EA looks like the good guys for once. Honestly, I have no true response to this other than the fact that I am saddened by the chain of events that have led to the reformation of Infinity Ward and am also angry at the state of affairs of the Call of Duty franchise. How could [Activision] let a game series that was originally released for and cultivated by its PC-based fans be marginalized and utterly picked clean to not only cater to the console demographic, but to essentially cut them out of consideration all together? The easy answer, of course, is money which is all the more damaging to Activision's image. Not that any of this matters as there is no such things as "Good" and "Evil" in the court room; just what goes against the law, and what doesn't.

Fz1994
Fz1994

feels like im watching C.S.I or Law and order... All that we need is West and Zampella dead =)..jk

sartnd
sartnd

Who want activision-torrents?

sartnd
sartnd

Rival company induced Infinity Ward cofounders to break contracts during development of Call of Duty: Modern Warfare 2 I hope EA does that to activision in the future and get away with it lol.

sartnd
sartnd

GO TO HELL Activision !

Darth_Starwind
Darth_Starwind

I don't I believe all those accusations are true but, if some are, especially the one about denying stock options to other Infinity Ward employees, then those two are doomed. Remember, Activision would have to have at least some proof to back up their allegations otherwise they could be counter sued for slander. (Which I bet might happen in the next couple of months.) I highly doubt that EA will be found at fault for anything. This is just another avenue that Activision is taking to get at West and Zampella. This move could be all about getting more documents released that are right now considered classified company information.

idkwhattoput3
idkwhattoput3

Man, Activision just makes me angry sometimes... ok most of the time. I don't like how big both Activision and EA have gotten, but Activision is just being stupid about this whole thing.

Sticker704
Sticker704

I'd never thought I'd be cheering for EA but here I am.

clqtte
clqtte

I don't understand.Is there only 2 those guy who know how to make a good shooting game in this world?.There's many of them out there.Activision just push for money.

IamGamer41
IamGamer41

@milan4554 12million people pay to play warcraft every month you dont think COD fans wont?They already have bought the same game 3 times now.

terminus
terminus

EA is going down...................

The_CJ_Dude
The_CJ_Dude

In this case, I'd choose the lesser of two evils. Sorry Kotick, your Death Star is gonna have to wait.

Jipset
Jipset

Battle of the ****heads.

AlexeyValentine
AlexeyValentine

Since Modern Warfail 2, Cod looks like Unreal Tournament with modern weapons, and thanks to all the hype new cods will continue to outsell every game, and still be able to charge 60$ every year for an "expansion".Bah i hope West and Zampella go screw themselves.

Docky2k6
Docky2k6

I wish I could be there in court when the ruling is made. I'd stand up and shout, "FINISH HIM...........FATALITY!!!" regardless of who won :) still, I'd like EA and West-Zampella to win, so they can carry on with whatever they're doin without any silly, petty speedbumps posed by Activision.

mos2000
mos2000

A question was asked earlier as to why...."everyone is backing EA blindly." Well let me play devil's advocate and give Activision the benefit of the doubt. That means: - West-Zampella knowingly breached their contract, for the title they started from the ground up, which has become the most critically appraised game this decade and brought them unprecedented success -Denied compensation to fellow developers who cherished the ground they walked on; and whom originally left EA with them to start CoW - Did so leaving highly incrementing evidence on company computers - which they know are monitored -Planned to sue Activision once discovered.... so the future of their flagship title can be left in limbo..... along with a huge chunk of compensation for the next 4-6 years in litigation...... all to Partner again with EA and start from scratch.......?!? OR we can play "sensible" advocate and presume that: -Activision once again wanted to milk a successful franchise to the ground -Approached West-Zampella on pushing up the date of MWF2, in which they were hesitant -Offered them the "world" if they did it, to keep the cash cow coming -After a few QTRs of less desired revenue, realized that maybe offering just a "lake" to West-Zampella was more financially sound -When it came time pay up, devised a scheme to renege on the offer, using a few emails they came across in which they could caveat and use to "explain" it's action. You decide, I'm going with the latter.....

mos2000
mos2000

@Dominicobaggio With all due respect, both distributions above do not sound like awards "for above and beyond work." Particularly the wii title. It got only 76 of a metacritic score and barely cracked 1.2 mm worldwide - achievements like these are considered mediocre in companies like Activision; and "additional" bonuses for them just don't exist. Activision also has a revenue and royalty structure in place for all of the major contributors in a title, that the company appears to work out in advance. How do I know??? It's all over the net dude. Checkout sites like glassdoor.com . Though you are right about the scenario you describe, the compensation above does not appear to fit into that category.

CannedWorms
CannedWorms

$400 million?? They should be demanding at least 500.

SIDEFX1
SIDEFX1

Personally i would hate to be in West and Zampella position..

milan4554
milan4554

[This message was deleted at the request of a moderator or administrator]

Dominicobaggio
Dominicobaggio

Look at the evidence, they wanted to make a seperate company with more freedom (wanting more money bigger cut) They admit to meeting with EA (why?) They started working with EA after being sacked. 3 coincidences i spotted immediately. Ill be watching this with interest. Will be nice to see what happens!

Dominicobaggio
Dominicobaggio

moss2000 "Why are they even asking them who deserves it. This would or should have already been panned out in contractual agreements. I, who has worked for one of the largest financial institutions globally (trust me, I'm not gloating,banking sucks...) knows that board members don't "ask" people at West's and Zampella's level who get's compensated on stock. They have the names of who contributed, then they start cuttin the d@mn checks." @mos2000 Actually working in banking i know that special bonuses for performance will come from your line manager, not just work bonus. This is a special bonus they are talking about of stocks, ie who worked above and beyond. Sounds realistic to me and is something big companies do. Im confused as to why everyone is backing EA blindly. I mean i dont know who is right and wrong but Activision seem to have some pretty decent evidence there if its true. Remember boys and girls we are talking about billions of pounds in games, so when people say why would they leave blah blah its all about greed. They could have possibly left to get more of a share of the cake from future games. Its not beyond realistic to think that they were planning to leave for ea for a better deal and this gave them a way out. It would be interesting to see what their contract at EA is, i bet its for a bigger percentage.

6h05tly
6h05tly

@weapon_dood816: And that's the thing. I've been doing my part in informing my "gamer" friends here in town about all of this. Strange that some of them don't keep up with the in-the-know of the gaming industry. I'm still (disgustingly) surprised that BO is still selling here in town. I should know, the person behind me at checkout the other night bought a copy of the game. Sigh...

Richardthe3rd
Richardthe3rd

@ weapon_d00d816 I completely agree. Activision has been putting up some big numbers, but imagine if they went even one year where they didn't, like Nintendo did throughout the late N64/Gcube era. I'd be interested to see how they managed it.

weapon_d00d816
weapon_d00d816

Really shows the kind of quality that video game mega-companies have stooped to. Activision is so low that they have to file these idiotic lawsuits to rake in even more money. What really pisses me off is that 90% of people that buy these CoD games every year don't see the low integrity of Activision. They don't see that they're only in it for the money. They don't see that their supposedly "new" CoD game is a re-skinned version of the last. You can't say the same for all video game mega-companies. The best examples are the 1st party devs. You never see this kind of immature BS coming from Nintendo or Microsoft, because they're experienced. Activision is just a noob company that struck instant gold but don't know how to manage the situation.

famunda666
famunda666

Wow Activison and Knobby Nodick are at it again.....I hope EA crushes them, this is crap. Not saying EA, or even Zampella and West are completely innocent , I'm just tired of seeing and hearing bout Activision and Kotick trying to suck the industry dry.

The--Professor
The--Professor

I never thought i would say these words but... Go EA, Go!!