Ticketmaster ‘mass arbitration’ class action on hold pending appeal

LOS ANGELES (CN) — A federal judge on Thursday hit the pause button on a class action brought against Ticketmaster over the company's practice of settling customer grievances through "mass arbitration."

An "unusual case" by the plaintiffs' own admission, the suit principally is an objection to Ticketmaster's unilateral change of the part of its terms of use agreement with customers that details how most legal disputes are settled in arbitration. The new arbitration system uses a different firm, New Era ADR, to mediate the lawsuits.

"New Era ADR will group their cases together for any reason it deems appropriate," the plaintiffs say in their complaint, filed in January 2022. "The batched cases will then be assigned to a single decisionmaker... [who] will then preside over the selection and litigation of a few bellwether cases, during which all other consumers will be forced to wait with no progress on their cases, and after which the outcome of those bellwether cases will be forced on all consumers. The New Era agreement thus requires consumers to engage in a novel and one-sided process that is tailored to disadvantage consumers."

Ticketmaster had, appropriately enough, filed a motion to compel the plaintiffs in this class action into, yes, arbitration. At a hearing in July, U.S. District Judge George Wu said he thought Ticketmaster's decision to change its arbitration system without clearly notifying customers "boggles the mind." He later denied the motion to compel arbitration, writing that the changes to the terms of use were "procedurally and substantively unconscionable."

Ticketmaster appealed. Recently the Ninth Circuit announced it would hear the appeal on an expedited schedule, a decision that Wu on Thursday called "somewhat surprising."

Ticketmaster, which is owned by the publicly traded multinational Live Nation Entertainment, then filed a motion to stay the case pending the appeal. The plaintiffs in the case, Ticketmaster customers, did not oppose the motion. They also filed their own motion, asking the judge to put off ruling on their own motion to enjoin Ticketmaster from once again changing their terms of use regarding arbitration.

The judge granted both motions, without much argument from either side. The Ninth Circuit has yet to schedule oral arguments in the appeal, but those could happen as early as January or February.

This year, a Ninth Circuit panel sided with Ticketmaster in a different fight over arbitration. That fight stemmed from an antitrust suit in which the plaintiffs claimed Ticketmaster used its market dominance to inflate ticket prices. The plaintiffs said that they shouldn't be forced into arbitration because the company hadn't used its full legal name on paperwork.

Ticketmaster faces at least one other similar dispute by Taylor Swift fans, who have a putative class action before Wu over the botched ticket sale fiasco in November 2022, in which the ticket seller's website crashed after it was overwhelmed by mix of Swifties and bots. The debate left thousands of "preregistered" fans without tickets, despite having waited online for hours.

Ticketmaster will likely ask for that legal dispute to be sent to arbitration.

Follow @hillelaron

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