Ticketmaster Back on the Hook for Rewards Scheme

(CN) - The 9th Circuit on Monday revived portions of two proposed class actions against Ticketmaster and its partners for an alleged online scheme to enroll unwitting consumers in a rewards program and charge monthly fees to their credit cards.

Previously, a trial judge had refused to certify two class actions that accused Ticketmaster of violating California's Unfair Competition Law and Consumers Legal Remedies Act.

Ticketmaster's "entertainment rewards program" has prompted three separate proposed class actions in California's Central District.

Essentially identical, the lawsuits allege that the ticket seller, working with Entertainment Publications LLC (EPI) and other partners, induces customers into inadvertently buying reward program services through its website. The plaintiffs claim that when a consumer clicks on a certain link on Ticketmaster.com, they are automatically taken to Entertainment Publications' website. Customers who enter their email address twice on Entertainment Publications' page and click a "yes" button are enrolled in the rewards program. If they have given their credit or debit card information to Tickmaster, Entertainment Publications then charges the customer a monthly membership fee after a 30-day trial period, according to the ruling.

All three proposed class actions asserted claims for violations of California's Unfair Competition Law, California's Consumers Legal Remedies Act and the Federal Electronic Fund Transfer Act. The actions proposed a class of all persons who, between Sept. 27, 2004, and the present, bought tickets through Ticketmaster.com, were enrolled in Entertainment Rewards by Ticketmaster passing their credit- or debit-card information to Entertainment Publications, were charged for Entertainment Rewards, and did not print any coupon or apply for any cash-back award from Entertainment Rewards.

U.S. District Judge Dale Fischer denied class certification in one of the lawsuits and dismissed the other two. The federal appeals panel in Pasadena reversed in part, resurrecting portions from two of the three cases.

In the proposed class action filed by John Mancini, Duke Sanders and Taylor Myers, the panel found possible merit with the plaintiffs' unfair-competition claims but said the lower court based its ruling on a misreading of state law.

The proposed class action is "plainly a case where appellants' claim is that they came, saw, were conquered by stealth, and were relieved of their money," Judge Ferdinand Fernandez wrote for the panel. "Basically, appellees' real objection is that state law gives a right to 'monetary relief to a citizen suing under it' (restitution) without a more particularized roof of injury and causation. That is not enough to preclude class standing here." (Parentheses in original.)

The judges also reversed the District Court's dismissal of a Consumers Legal Remedies Act claim by Craig and Julie Johnson. The lower court dismissed the Johnsons' claim because it was "duplicative of [the] Mancini [claims] and suffered from the same defects," according to the ruling. This was an error, the panel found.

"While it is true that the proposed class in the Johnsons' original complaints was, in fact, subject to the same defects as Mancini, the Johnsons then proposed a second amended complaint which narrowed the class by adding a limitation to those who 'reported in the course of cancellation or seeking a refund that they were unaware that they would be enrolled in or charged for Entertainment Rewards,'' Fernandez wrote. "The District Court based its denial of the Johnsons' motion to amend on its determination that the limitation made no difference. We do not agree."

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