Taylor Swift performs at the iHeartRadio Wango Tango concert in Carson, California, U.S., June 1, 2019. REUTERS/Mario Anzuoni
Aug 11 (Reuters) – Live Nation Entertainment (LYV.N) and subsidiary Ticketmaster have lost their bid to force consumers to bring claims of inflated ticket prices in a novel “mass” arbitration, as a U.S. judge questioned the fairness of the process.
In his decision, U.S. District Judge George Wu in Los Angeles on Thursday criticized how Live Nation imposed new terms of arbitration on ticket-buyers without telling consumers, and he said the rules of the arbitration posed a “serious risk of being fundamentally unfair.”
Companies generally prefer private arbitration over litigating in court, where disputes can drag on for years and cost a substantial amount of money for both sides. Arbitration also can block consumers and others from forming class actions, lessening the potential damages exposure for a company.
Wu’s Thursday ruling in the consumer antitrust suit over Live Nation’s ticket prices comes as the company faces legal and regulatory scrutiny over its handling last year for Taylor Swift’s “The Eras” tour. A surge in demand for tickets overwhelmed the company’s website. Wu is presiding over an antitrust lawsuit that Swift fans filed in December against Live Nation.
A representative from Live Nation and a lawyer for the company did not respond to messages seeking comment. The company has denied any liability.
The ruling, a key pretrial order, keeps in place the ability of the plaintiffs to seek class-action status. The company can appeal Wu’s order to the San Francisco-based 9th U.S. Circuit Court of Appeals and try to pause the litigation in the district court from moving forward.
Live Nation wanted to push consumers into arbitration at New Era ADR, which launched in 2021 and offered a new “mass” arbitration procedure. Under this procedure, a neutral who presides over the matter could group together cases and make a ruling that would apply to them and other subsequent disputes.
In a filing, Live Nation called New Era’s rules “sensible, fair, and similar” to those at other platforms.
Wu questioned the “unchecked power” of the arbitrator to group cases together. He also said limitations on evidence-gathering were “wholly inadequate for claimants to even begin to prove their case,” and he faulted the limited right to appeal.
“Because defendants are often in effect the only ticketing game in town, would-be concert goers are forced to accept defendants’ [terms of use] in full, or else forego the opportunity to attend events altogether,” Wu wrote.
New Era CEO Rich Lee in a statement said one of Wu’s colleagues on the bench in a separate case this week found Live Nation’s designation of New Era “valid” and “enforceable.”
Lee said Wu’s ruling “offers a useful roadmap to improve our mass arbitration protocols.”
Warren Postman, an attorney for the plaintiffs, said “Ticketmaster tried to force its customers into a group arbitration process that stacked the deck repeatedly in its favor.”
The case is Skot Heckman et al v. Live Nation Entertainment Inc et al, U.S. District Court, Central District of California, 2:22-cv-00047-GW-GJS.
For plaintiffs: Kevin Teruya and Adam Wolfson of Quinn Emanuel Urquhart & Sullivan; and Warren Postman and Albert Pak of Keller Postman
For defendants: Timothy O’Mara of Latham & Watkins
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