Concertgoers Face Class Action Setback After Being Told to Enter Arbitration With Ticketmaster

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Concertgoers who filed a class action lawsuit against Live Nation Entertainment Inc. and its subsidiary Ticketmaster LLC alleging the companies monopolize ticket sales faced a setback on Tuesday when they were ordered to enter arbitration.

In a California federal court, U.S. District Judge George H. Wu told the ticket holders that Ticketmaster’s site gave users multiple chances to read through the terms of use, which included a clear arbitration clause, and that clause locked consumers into arbitration, Law360 reports. Wu said that consumers had the chance to read the terms when they created and signed into an account, and purchased a ticket.

He added that the companies’ websites were no “pure clickwrap agreements” as they required users to make an extra click to access the terms of use, according to Law360.

The class action lawsuit alleging that the companies were stifling competition and inflating ticket prices was filed in April 2020.

Consumers said that Ticketmaster and Live Nation failed to give ample notice of the arbitration provision, and challenged how and where the terms of use appeared, however Wu ruled that the companies took adequate measures to show consumers the terms of use, Law360 reported.

Arbitration is a determination process that takes place outside of court. Parties who participate in arbitration agree that a neutral decision-maker will make a binding determination in the case. 

“Plaintiffs were given constructive notice of the TOUs at several junctures and could have reviewed the TOUs at their leisure during account creation, account sign in, or while navigating the website, not only when making a purchase,” Wu said.

Wu also ruled against consumers’ claims that ticket holds are oppressive and force them to rush purchases, saying instead that the holds may actually give consumers more time to purchase tickets for in-demand concerts.

Wu said that the concertgoers had filed to give any “persuasive authority where a court has invalidated an arbitration agreement in similar circumstances,” Law360 reported.

Consumers have until May 14 to provide additional information before Wu finalizes the ruling.

Most major companies include arbitration clauses in their contracts, user agreements, or terms of service. Many companies attempt to dodge legal action by compelling arbitration; however, arbitration does not always mean that the company wins. In certain scenarios, individuals can recover more in arbitration than they would in a class action settlement.  

Recently, Microsoft was hit with a class action lawsuit claiming the Xbox Elite controller suffers from a “drift,” however in April the case was moved to arbitration and will likely be settled outside of the courtroom. 

Have you ever had to settle a claim through arbitration? Let us know how it went in the comments section!

The consumers are represented by Frederick A. Lorig, Kevin Y. Teruya, Adam B. Wolfson, and William R. Sears of Quinn Emanuel Urquhart & Sullivan LLP.

Live Nation and Ticketmaster are represented by Daniel M. Wall, Timothy L. O’Mara, Andrew M. Gass, and Kirsten Ferguson of Latham & Watkins LLP. The Ticketmaster Ticket Monopoly Class Action Lawsuit is Olivia Van Iderstine et al. v. Live Nation Entertainment Inc. et al., Case No. 2:20-cv03888, in the U.S. District Court for the Central District of California.

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• Ticketmaster Class Action Filed over Rescheduled Janet Jackson Tour