Live Nation loses SCOTUS appeal, forcing ticket seller to face antitrust suit 

WASHINGTON (CN) — The Supreme Court refused Monday to review whether Live Nation and Ticketmaster’s systematic arbitration scheme to deal with an onslaught of customer complaints is protected by federal law.

The ticket sellers face an antitrust lawsuit from several customers. Live Nation, which owns Ticketmaster, tried to force the case into arbitration, citing the agreement customers signed when purchasing their tickets.

A lower court rejected Live Nation and Ticketmaster’s switch to a new arbitration provider, finding that the move violated California law. An appeals court upheld the decision, invalidated the agreement and forced the ticket sellers to face the customers’ lawsuit in federal court.

Live Nation and Ticketmaster urged the justices to review what type of agreements are protected by the Federal Arbitration Act and whether California’s law violates federal protections for arbitration agreements.

“The court’s review on both questions is urgently needed to ensure that arbitration remains a viable way to resolve disputes, notwithstanding new attacks from the plaintiffs’ bar and old hostility from the bench,” the ticket sellers wrote.

Live Nation and Ticketmaster claim that they updated their arbitration agreement in 2021 to counter a tactic pioneered by the law firm representing the customers who brought the antitrust lawsuit. The ticket sellers say that the firm files tens of thousands of identical arbitration claims against individual defendants to leverage the fees businesses pay in consumer arbitrations.

Faced with mounting costs, businesses would rather settle than move forward with arbitration.

“Upfront obligations to pay millions in filing fees force companies to forego defending themselves on the merits, no matter how strong their defenses,” the ticket sellers wrote. “And if the case gets beyond the filing-fee stage, proceedings ‘[can]not realistically move forward’ expeditiously in arbitral systems ill-equipped for a flood of filings.”

Live Nation and Ticketmaster designated New Era ADR as its arbitration provider in response. New Era ADR adjudicates large numbers of arbitration claims in a process that mirrors the bellwether approach used in federal litigation.

When five or more cases raise common factual or legal issues, New Era ADR selects three bellwether cases to arbitrate to completion. The remaining cases are then decided according to the bellwether results.

The customers say that coordination between the ticket sellers and New Era ADR resulted in rules that reserved many of the protections and advantages of class action for businesses without providing any for customers.

“‘Though decisions in bellwether cases are precedential, the arbitration hearing and award in those cases proceed individually and are confidential, known only to the particular plaintiffs, to the defendant company, and to the arbitrator,’” the customers wrote. “Thus, nonbellwether plaintiffs would be bound despite having ‘had no chance to participate in the arbitration’ and despite being ‘ignorant of the decision until it is invoked against them.’”

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