Live Nation Rejected by Supreme Court in Consumer Antitrust Case

The US Supreme Court turned away an appeal by ticketing giant Live Nation Entertainment Inc. in a consumer antitrust suit, dealing a blow to the company’s effort to manage its antitrust woes by channeling cases into arbitration.

The justices without comment left intact a federal appeals court decision that said Live Nation’s arbitration agreements with customers were “unconscionable” and couldn’t be enforced under California law. Live Nation was trying to funnel cases into group arbitration proceedings run by New Era ADR.

The rebuff lets the consumers press ahead with a suit that claims they paid inflated ticket fees. The customers are seeking class action status in the case, which was filed in federal district court in Los Angeles and also names Live Nation’s Ticketmaster subsidiary as a defendant.

Live Nation and Ticketmaster have been heavily scrutinized for more than 15 years, dating back to the 2010 merger of the two companies. The Justice Department is suing to break up the company and has a pending criminal antitrust probe that is also targeting Chief Executive Officer Michael Rapino. Last month the Federal Trade Commission sued the company, alleging it facilitated large-scale ticket scalping.

The Supreme Court has previously let companies enforce arbitration accords with customers and employees. Those rulings invoked the 1925 Federal Arbitration Act, which says arbitration agreements must be enforced like any other contract.

In the Live Nation case, the San Francisco-based 9th US Circuit Court of Appeals said the law wasn’t applicable to forms of arbitration that didn’t exist in 1925, including group proceedings.

Supporters say arbitration is cheaper and more efficient than traditional litigation. Critics say companies are trying to strip individuals of important procedural rights that are available in court.

The case is Live Nation v. Heckman, 24-1145.

--With assistance from Josh Sisco.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Steve Stroth

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