Live Nation Must Face Class Action After Court Rules Ticket Agreements Invalid: ‘Opaque and Unfair’
Written by djfrosty on October 31, 2024
A federal appeals court says Live Nation and Ticketmaster must face a class action claiming they charged “extraordinarily high” prices to thousands of ticket buyers, ruling that the concert giants cannot enforce “opaque and unfair” user agreements to scuttle the lawsuit.
Live Nation claimed fans had waived their right to sue in court when they bought their tickets, arguing they had signed agreements promising to litigate any legal disputes via private arbitration — a common requirement when purchasing event tickets and other services from many companies.
But in a ruling Monday (Oct. 28), the U.S. Court of Appeals for the Ninth Circuit ruled that Live Nation’s agreements were “unconscionable and unenforceable” since they would make it “impossible” for fans to fairly pursue claims against the company.
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“Forced to accept terms that can be changed without notice, a plaintiff then must arbitrate under … opaque and unfair rules,” the appeals court wrote. “The rules and the terms are so overly harsh or one-sided as to unequivocally represent a systematic effort to impose arbitration as an inferior forum.”
The ruling described Live Nation’s agreements in scathing terms, calling them “so dense, convoluted and internally contradictory to be borderline unintelligible” and “poorly drafted and riddled with typos.” The terms were so confusing, the court said, that Live Nation’s own attorneys “struggled to explain the rules” during a court hearing.
A spokesperson for Live Nation did not immediately return a request for comment on Thursday (Oct. 31).
The ruling came as Live Nation is facing a sweeping antitrust lawsuit from the U.S. Department of Justice, seeking to break up the company over allegations that it illegally maintained a monopoly in the live entertainment industry. That separate action, which could take years to resolve, remains pending.
The class action against Live Nation, filed in 2022, accuses the company of violating antitrust laws by monopolizing the market for concert tickets and engaging in “predatory” behavior. Filed on behalf of “hundreds of thousands if not millions” of ticket buyers, the case claims Live Nation and Ticketmaster abused their dominance to charge “extraordinarily high” prices to consumers.
The lawsuit was something of a sequel to an earlier class action, in which the same legal team (from the law firm Quinn Emanuel) made highly-similar claims against Live Nation. That earlier case was dismissed after a federal judge ruled that such accusations must be handled via private litigation because of agreements that the plaintiffs had signed when they purchased their tickets.
In Monday’s ruling, the Ninth Circuit said that earlier victory had been both a gift and a curse for Live Nation. Though it had allowed the company to avoid a class-action lawsuit, the ruling raised the troubling prospect of facing thousands of individual arbitration cases all at once.
“Defendants foresaw that if their motion to compel [arbitration] in that case were granted, they would be faced with a large number of parallel individual claims by ticket purchasers,” the appeals court wrote. “In anticipation of such claims, defendants sought to gain in arbitration some of the advantages of class-wide litigation while suffering few of its disadvantages.”
According to the ruling, doing so involved amending its terms of use to require fans to submit to “novel and unusual” procedures for “mass arbitration” offered by a new arbitration company called New Era ADR.
It was this new arbitration agreement that the appeals court declared unenforceable in Monday’s ruling. The court roundly criticized the rules, saying they had placed unfair terms on any consumers who wanted to litigate a dispute with Live Nation. And, citing the company’s market share, the court said fans had almost no choice but to sign the agreement.
“Because Ticketmaster is the exclusive ticket seller for almost all live concerts in large venues, prospective ticket buyers in most instances are faced with a choice,” the court wrote. “They can either use Ticketmaster’s website and accept its terms, or refuse to use the website and be entirely foreclosed from purchasing tickets on the primary market.”