The controversy began when Jim Sterling made a first impressions video of Digital Homicide’s game The Slaughtering Grounds in which he criticized the game for its poor quality. In the video, Jim wasn't really that harsh towards the game and was more confused and annoyed than anything. Digital Homicide’s immediate response was posting a video in which they directly harrassed Sterling using foul language and profanity and claimed that his review was unfair because he did't tell them the game's problems in private instead of publishing the video. It should be noted that Sterling’s video WAS NOT A REVIEW. Here it is also shown that Digital Homicide seemed to think reviews should only be positive and critics had to be their personal bug testers.
This video began a long feud between Sterling and Digital Homicide, and Sterling began covering them in his show “Jimquistion”. Digital Homicide responded by claiming a fraudulent DMCA takedown on Sterling’s original Slaughtering Grounds video. Digital Homicide claimed that Sterling’s video described the game as “An absolute failure” despite only playing the game for 10 minutes thus it infringed Fair Use Copyright Law because it was an “Unfair review”. This revealed Digital Homicide’s misconception of how Fair Use Copyright Law works, as they believed “Fair use” was completely literal and “unfair” use violated it. Sterling’s video was quickly restored as expected, despite this Digital Homicide continued to claim they were in the right.
Months later Digital Homicide and Sterling had a podcast where Jim intended to solve their differences, instead Digital Homicide spent the whole podcast attacking Sterling, trying to doxx him, making wild conspirancy theories with no evidence, and threatened to sue him if he didn’t stop talking about them. Eventually James Romine, one of Digital Homicide's ownsers, actually did file a lawsuit against James Stanton for 10 Million dollars for “defamation and harassment”, later it was increased to 15 Million dollars. Romine claimed that Jim was commanding his fans to harass them because he joked about having an army of “undead followers”, and claimed Jim defamed him because he made an article in which mistakenly accused them for taking an artwork for one fo their games from DeviantArt despite the fact that Sterling immediately corrected the article when he realized the mistake and never directly said they stole it.
Stanton was forced to stop talking about Digital Homicide afterwards likely to avoid giving Digital Homicide possible evidence they could use against him. Many suspected that this was the lawsuit’s real goal. James Romine tried to obtain a lawyer via crowdfunding but failed so Romine filed the lawsuit pro se, in other words, the person who threatened legal action about an opinion video being "unfair" filed a lawsuit without a lawyer.
With Sterling no longer covering Digital Homicide, countless YouTubers and Steam users took over Jim’s place to call out Digital Homicide for their actions, how they flood Steam with shovelware to make quick money via Steam trading cards, and continued downvoting for their games on Greenlight. Digital Homicide in turn contacted those Steam groups and threatened to sue them unless they stopped downvoting their games. James Romine AGAIN filed a new lawsuit against 100 Steam users, of which only 11 were listed (or rather, their Steam account user names) while the rest were unnamed, and AGAIN did so pro se. The lawsuit was for “defamation, harassment, formation of hate groups, public humiliation, loss of income, conspirancy to commit civil rights violations, etc.” and demanded a total of 18 MILLION DOLLARS. Combined with the first lawsuit against Sterling made a total demand of 33 MILLION DOLLARS! Digital Homicide then filed a subpoena against Valve demanding the identities of the users they wanted to sue. According to an article in Arizona, Digital Homicide had tried to contact the FBI to shut down the people talking about them before filing the lawsuit.
A large amount of users took a detailed look at the Lawsuit and discovered that it was very poorly written, having a large amount of claims not being legally viable, more misconceptions of how law works, exaggerated claims, false evidence, etc. Most of the evidence supplied was also just negative reviews and users calling Digital Homicide out for shady behavior instead of actual harassment.
It was also discovered that the lawsuit claimed that if a defendant can’t pay or is outside USA law's reach, then their Steam account must be deleted, and that defendants could contact Romine for a settlement if they didn't want to go to court. Once again it was suspected the Lawsuit was once again a form of massive criticism silencing. This also meant that if Romine won the lawsuit it would create an anti-consumer precedent by letting people sue anyone who negatively reviewed their work.
Thanfkully, Valve responded by contesting the subpoena and banning Digital Homicide from Steam for “being hostile against Steam users”. Digital Homicide responded by threatening to sue Valve, but soon they dismissed the lawsuit against the 100 Steam users due to not having the funds to continue them and not getting the subpoena.
Jim Sterling's lawyers had previously filed a dismissal against the first lawsuit against him. In January 2017 the judged partially granted the dismissal because the Lawsuit was filed as only James Romine rather than Digital Homicide as a whole. It was found that most if not all of the complaints in the lawsuit were clearly about damages against Digital Homicide the company NOT James Romine the person therefore those were not valid complains. Additionally Digital Homicide as a company would not be allowed to file a lawsuit without a lawyer.
Romine now had to either prove that the complants in the lawsuit are really affecting him or obtain a Lawyer and get the entirety of Digital Homicide (which was already out of business) to join the lawsuit. If he failed to do either by February 10 2017, the lawsuit will be dismissed entirely. Romine did file a new document, but instead of doing what the judge ordered, the new documents simply added new complaints about Digital Homicide's fake accounts and claimed that Jim was a competitor on Steam because he did some voice acting for a few games therefore he orchestrated a series of attacks against Digital Homicide to destroy them and steal their costumers. The entire rest of the lawsuit was left unchanged with zero attempts to prove Romine was the one affect by the accusations.
On February 19 2017, news broke that Sterling's Lawyers and Romine came to a settlement and filed a stipulation to dimiss the lawsuit with prejudice. The document stated that each party would pay their own legal fees and Romine is no longer allowed to attack Jim Sterling's content in any form. Sterling made a statement that said "The plaintiff agreed to drop his case after my lawyer explained exactly what would happen if this went to court and how we would respond". At one point while they were trading documents to dismiss the lawsuit Romine tried to trick Jim into signing a modified document without telling him it was modified but failed.
After the lawsuit against James Stanton ended, he became legally able to speak about Digital Homicide again. On February 28, 2017 Jim made a 38 minute video explaining his thoughts about the lawsuit and his final words towards Digital Homicide. With the Lawsuit against Jim Sterling terminated for good and Digital Homicide out of business, their legal actions, and the infamous Studio's story, likely will finally end for good. It should be noted that Romine still can attempt to reopen the lawsuit against Steam users.
While not officially confirmed, it has been suggested by Jim and Leonard French, an actual copyright lawyer who's been following the case for months, that the accusations Romine listed in the final version of the lawsuit could be considered defamatory against Sterling, and that Jim had the option of countersuing Romine for that but he chose not to do so.