Live Nation Antitrust Case Shows Peril of 'Batched' Arbitration

Summary

Court finds defects in Live Nation’s batched proceedings
Class action against Live Nation to proceed in open court

Bloomberg Law

A Ninth Circuit ruling that denied Live Nation Entertainment Inc.'s bid to compel “batched” arbitration underscores the risks that corporate defendants face when pushing to resolve consumer antitrust disputes outside of court.

Live Nation’s requirement that aggregated or batched claims go through its arbitration panel—New Era ADR Inc.—was unfair to consumers who alleged the company inflated ticket prices, the US Court of Appeals for the Ninth Circuit ruled Oct. 28. New Era’s opaque rules overtly favored the concert promoter and ticketing company while failing to provide plaintiffs with advantages and protections of a class action proceeding, the court said.

Antitrust experts say defendant companies should reexamine their arbitration agreements in light of the Ninth Circuit ruling, especially if they limit plaintiffs’ ability to have a full and fair hearing on their individual circumstances. Live Nation now faces the prospect of significant damages from consumer plaintiffs who can pursue their class action in open court.

“It is going to have implications for any company that’s thinking about using batching provisions,” said Richard Frankel, law professor at Drexel University who studies arbitration proceedings. “The lawyer in me would say, ‘You’ve got to look at this opinion very carefully and make sure that if you are going to use batching, it doesn’t run into the same problems as this batch provision.’”

New Era’s mass arbitration procedure sought to group together nearly identical cases with common issues or facts and apply precedent from bellwether decisions to other claimants’ cases, which the Ninth Circuit singled out as particularly problematic.

Live Nation has since requested an en banc review of the panel’s ruling, which affirmed a lower court decision calling New Era’s arbitration rules “unconscionable.”

Live Nation and Ticketmaster, which merged in 2010, didn’t respond to a request for comment..."

Live Nation Antitrust Case Shows Peril of ‘Batched’ Arbitration

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