A federal appeals panel has agreed Ticketmaster and Live Nation don’t have to face a potential class action lawsuit from online ticket buyers over alleged excessive fees, saying the industry leaders can address such disputes through arbitration.
Named plaintiffs Mitch Oberstein, Gary Matty and Sophie Burke sued the ticket firms, alleging excessive fees for online purchases. Live Nation, which merged with Ticketmaster in 2010, asked U.S. District Judge George Wu to compel arbitration. Wu agreed, pointing to the company’s website terms of use document, which included an arbitration provision.
The plaintiffs challenged that decision before the U.S. Ninth Circuit Court of Appeals.
Judge Danny Boggs wrote the opinion, issued Feb. 13; Judges Kim Wardlaw and Sanra Ikuta concurred. Boggs is on the U.S. Sixth Circuit Court of Appeals and sat for this decision by designation.
On appeal, the customers said Judge Wu’s dismissal of their complaint was improper. They challenged the validity of the terms and conditions document, saying it failed to identify either Live Nation or Ticketmaster as party to the agreement and said they didn’t get constructive notice of the agreement as required under California or Massachusetts law. Alternatively, they argued that even if California law wasn’t violated, Burke's home state of Massachusetts has a more stringent law.
“Upon clicking the ‘Terms of Use’ hyperlink, a user is directed to a page containing the Terms,” Boggs wrote. “The first line reads: ‘Welcome! The following are the terms of use (‘Terms’) that govern your use of Live Nation and Ticketmaster’s sites and mobile applications . . . and your purchase, possession or use of any Live Nation or Ticketmaster tickets, products, or services.’ ”
Boggs further explained the relevant pages “are emblazoned” with Ticketmaster and Live Nation logos, and that the company names appear seven and nine times, respectively. He also said California law doesn’t require corporations party to a contract to use full legal names, only that reasonable users can identify the parties, adding both companies “more than clear that low bar.”
The panel said the customers relied on lawsuits regarding agreements courts deemed invalid because they consistently used generic terms and made it difficult to identify relevant parties.
“It is difficult to imagine who would be a party to the arbitration agreement if not, at the very least, the entity specifically listed as the addressee for the initiation of arbitration disputes,” Boggs wrote. “While the cases ticket purchasers cite establish a floor for what level of identification is insufficient, the agreements at issue rise stories above it.”
The panel explained the difference between “clickwrap” agreements, in which users must explicitly check an “I agree” box on a popup window to keep using the site, and “browsewrap” agreements, which are accessible via a link on the site and otherwise acceptance is implied by continued use of the site.
Boggs wrote the buyers misapplied an opinion they said established Massachusetts’ more stringent standards for online agreements, saying that state and many other courts use a basic reasonableness standard. Although clickwrap sites are better for demonstrating users agree to terms, that technology isn’t required, Boggs said, explaining the relevant factors are whether the notice is reasonably conspicuous and that the manifestation of user assent is unambiguous.
The terms at issue, Boggs wrote, “are not pure clickwrap because they do not, upon some user action, request that users click on a box to confirm agreement before proceeding. Nor are they pure browsewrap, as they are not hidden in links located at the bottom of webpages. Rather, they lie somewhere in between.”
At three times users must click a confirmation button reference the terms of use: when creating an account, signing in and making a purchase. The link to the “Terms of Use” is set apart with bright blue text, a crucial factor in establishing constructive notice. Again the panel said the buyers relied on cases that ultimately defeated their argument because those decisions, while resolved in favor of plaintiffs’ demonstrated websites that don’t pass muster, easily distinguishable from the features of the Ticketmaster and Live Nation sites.
Finally, the buyers said Judge Wu erred by finding constructive notice to be dispositive, alleging he didn’t consider their discovery evidence and asserting he shouldn’t have relied on the company’s screenshots.
“While ticket purchasers claim that the district court relied on incomplete excerpts of the webpages, there is no dispute that the webpages themselves contained the notices, that the notices linked to the Terms, and that the Terms contained the arbitration provision,” Boggs wrote. “The features of the webpages on which the district court based its holding — the color, placement, language, and repetition of the notices — are all features on which courts, including this one, have relied in determining constructive notice as a matter of law.”
Representing plaintiffs in the matter are lawyers from Quinn Emanual Urquhart & Sullivan’s offices in New York and Los Angeles; Keller Postman, of Washington, D.C.; and Frederick Lorig, of Rolling Hills, California.
Live Nation and Ticketmaster have been represented by lawyers from Latham & Watkins, of San Francisco.