Live Nation must face consumer lawsuit over ticket prices, US appeals court rules
Adds comment from New Era in paragraph 5
By Mike Scarcella
Oct 28 (Reuters) -Live Nation Entertainment and its subsidiary Ticketmaster have failed to persuade a U.S. appeals court to block a proposed class action accusing them of charging artificially high ticket prices.
The San Francisco-based 9th U.S. Circuit Court of Appeals on Monday upheld a lower judge’s 2023 ruling that said Live Nation could not enforce contract provisions that required ticket buyers to arbitrate their claims rather than sue in federal court.
The appeals panel said the arbitration rules were unfair to consumers and “overtly” beneficial to defendants. The rules, which placed the ticketholders' claims in the hands of a new arbitration body called New Era ADR, were “unconscionable and unenforceable,” the court said.
Beverly Hills-based Live Nation did not immediately respond to a request for comment.
New Era chief executive Rich Lee in a statement said the company, which is not a defendant, was disappointed by the court's decision. Lee said New Era's rules are "objective, easy to understand, and, most importantly, highly advantageous for any party with meritorious claims or defenses."
The closely watched appeal tested the scope of companies' power to compel buyers to arbitrate their disputes, including through "mass" arbitrations involving hundreds or thousands of claims.
Warren Postman, a lawyer for the consumers, welcomed the decision in a statement. He criticized what he called "corporate attempts to impose novel group procedures to gain tactical advantages over consumers and employees."
The appeals panel found a key 2005 California Supreme Court opinion protecting class actions applied to the antitrust case against Live Nation and was not preempted by the Federal Arbitration Act.
New Era’s arbitration rules were an “inadequate vehicle” for the plaintiffs to resolve their claims,the three-judge panel said, with rules “so dense, convoluted and internally contradictory to be borderline unintelligible.”
Live Nation has defended New Era, calling its rules "sensible, fair, and similar" to those at other platforms.
In May, the U.S. Justice Department and a group of states asked a U.S. judge in Manhattan to break up Live Nation for allegedly violating antitrust law, claiming the company “suffocates its competition” in its control over ticket sales and pricing.
Live Nation in a statement then said there was more competition than ever before in the live events market.
The case is Skot Heckman et al v. Live Nation et al, 9th U.S. Circuit Court of Appeals, No. 23-55770.
For plaintiffs: Warren Postman and Albert Pak of Keller Postman; and Kevin Teruya and Adam Wolfson of Quinn Emanuel Urquhart & Sullivan
For defendants: Roman Martinez and Tim O’Mara of Latham & Watkins
Read more:
In Live Nation case, appeals court mulls mass arbitration breakthrough
Live Nation 'suffocates its competition,' US says in monopoly lawsuit
Live Nation in consumer ticket-price lawsuit loses bid for 'mass' arbitration
Reporting by Mike Scarcella
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