Valve Corporation v. Abbruzzese
2:24-cv-01717
| W.D. Wash. | May 14, 2025Background
- Valve Corporation filed a Petition to Enjoin Arbitrations against 624 individuals, seeking to stop ongoing arbitrations based on a recent amendment to its Steam Subscriber Agreement (SSA).
- Valve was previously compelled to arbitrate certain antitrust claims, but amended its SSA to require litigation instead of arbitration after parts of its arbitration provision were found unenforceable.
- Representation for respondents is fragmented, and counsel has only formally appeared for a few individuals, complicating proceedings.
- The court must resolve threshold issues of subject-matter jurisdiction and procedural posture before ruling on any pending motions.
- Valve asserts jurisdiction under the Declaratory Judgment Act, All Writs Act, and Section 4 of the Federal Arbitration Act, but respondents challenge the court’s authority on these grounds.
- Pending motions and deadlines are stayed until the jurisdictional and procedural questions are resolved through supplemental briefing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction under cited statutes | Court has jurisdiction under Declaratory Judgment Act, All Writs Act, and FAA §4 | Court lacks subject-matter jurisdiction; Valve's basis is suspect | Court defers decision; orders supplemental briefing |
| Authority to enjoin arbitrations | Court can enjoin arbitrations via statutory authority | No authority under FAA or other Acts to enjoin arbitrations | Court has not ruled; requests further briefing |
| Procedural vehicle (petition vs. complaint) | Petition under FAA §4 is proper | Valve’s procedural approach is improper; should be a complaint | Court seeks further argument; prior order treated as complaint but reconsidering |
| Counsel status and representation | Representation status is sufficient for responding parties | Insufficient representation/unclear posture for many respondents | Court orders clarification and chart of representation |
Key Cases Cited
- Arbaugh v. Y & H Corp., 546 U.S. 500 (Supreme Court has independent duty to determine subject-matter jurisdiction)
- Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (Differentiates between jurisdictional limitations and merits issues)
- Textile Unlimited, Inc. v. A..BMH & Co., Inc., 240 F.3d 781 (Section 4 of FAA only authorizes actions to compel arbitration)
- In re Sussex, 781 F.3d 1065 (District court authority over arbitration is limited to certain statutory situations)
- In re Am. Exp. Fin. Advisors Sec. Litig., 672 F.3d 113 (No explicit FAA authority to enjoin private arbitration)