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Ticketmaster’s arbitration procedure dubbed “non-traditional” and “Kafkaesque”

By | Published on Tuesday 21 March 2023


Ticketmaster’s use of arbitration to deal with aggrieved customers is back in the spotlight, with a new legal filing taking aim at the Live Nation ticketing company’s choice of arbitrator. Seeking to demonstrate how arbitration via the company New Era unfairly favours Ticketmaster, plaintiffs argue that its arbitration process is “non-traditional” and “Kafkaesque”.

The terms and conditions of the Ticketmaster platform force aggrieved customers to take their grievances to private arbitration rather than pursuing litigation through the courts.

This means that whenever a customer tries to sue the ticketing firm – especially if it’s a lawsuit accusing Ticketmaster of anti-competitive conduct – Live Nation’s lawyers just show the judge overseeing the case said terms and conditions, and request that the plaintiff be sent in the direction of their chosen arbitrator.

Various American customers have tried to circumvent that obligation, usually by arguing that no one ever reads Ticketmaster’s terms and conditions. But judges have generally concluded that the ticketing outfit has sufficiently sign-posted its small print for those terms to be considered binding, read or not.

With that in mind, some of the customers seeking to sue Ticketmaster have started taking aim instead at the company’s current choice of arbitrator, which changed not so long ago from a company called JAMS to a company called New Era.

Ticketmaster argues that New Era is better set up to deal with complaints where there are lots of concurrent complainants, as is common in the ticketing market. But many of those complainants reckon that New Era is, in fact, biased in favour of the ticketing company.

“Defendants Live Nation’s and Ticketmaster’s original arbitration agreement, which this court enforced, called for traditional, bilateral arbitration between each consumer and defendants before JAMS”, said legal filing states. However, when Live Nation “realised that many consumers would pursue traditional arbitration rather than giving up, defendants attempted to change the rules mid-stream”.

“Consumers, with barely any notice of the new rules, simply by continuing to use defendants’ websites, were subjected to a non-traditional, Kafkaesque arbitration procedure designed by defendants to deter filing claims”, it then claims. “The abrupt way defendants imposed the new arbitration procedure is procedurally unconscionable, and the new arbitration procedure is also substantively unconscionable”.

Outlining its issues with that procedure in more detail, the legal filing goes on: “Plaintiffs pay 100% of the marginal cost and must prove their case in the face of absurd limitations on documents (ten total), briefing page lengths (five), witnesses (two to three), and discovery (none). All cases are consolidated before one arbitrator who can reject all cases based on dispositive issues at once (with no discovery, ten documents, and one five-page brief)”.

“But if plaintiffs survive on dispositive issues, then defendants can litigate individual issues seriatim, virtually indefinitely, producing a controlled drip of final decisions to reduce the pressure on defendants”, it then claims.

“If a plaintiff wins injunctive relief, defendants have a one-sided right of appeal de novo to a different arbitral forum (while denials of injunctive relief are unreviewable). In short, defendants can win efficiently, but can only lose after plaintiffs incur unprecedentedly tendentious inefficiencies”.

“The Federal Arbitration Act does not preempt California unconscionability law”, the legal filing then argues. “Indeed, defendants’ rules present a process so different from the bilateral arbitration protected by the FAA that it does not apply to this process at all. Defendants’ motion to compel arbitration should be denied”.

We await to see if the judge in this particular Ticketmaster dispute concurs.