The Ninth Circuit Appeals Court Reviews Live Nation’s Efforts to Force Lawsuit to Arbitration
The Ninth Circuit Appeals Court in the US recently deliberated on the persistent attempts by Live Nation to compel a lawsuit alleging anticompetitive behavior into arbitration. This legal battle took an intriguing turn when Live Nation switched its chosen arbitrator to a company named New Era, resulting in the lower court blocking this move. The judges raised concerns similar to those previously brought up regarding New Era’s arbitration processes, which were criticized as “circular and problematic”, “crazy”, “cockamamie”, and “just nuts” by various parties.
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It appears that the switch from the established arbitrator JAMS to New Era may not have been in Live Nation’s best interest, based on the criticisms. Live Nation, along with its Ticketmaster division, has a track record of enforcing the resolution of legal disputes initiated by ticket-buyers through private arbitration. This strategy, often successful, is outlined in Ticketmaster’s terms, where all disputes must undergo arbitration before escalating to court.
The allure of arbitration lies in its purported simplicity, cost-effectiveness, and efficiency compared to traditional litigation in court. The privacy afforded by arbitration, in contrast to the public nature of lawsuits, is particularly appealing, especially when Live Nation faces allegations of anticompetitive practices amid heightened scrutiny from US regulators and lawmakers.
Challenges and Controversies Surrounding the Arbitration Process
The specific lawsuit in question, filed by ticket-buyers accusing Live Nation of breaching competition laws, would likely have been steered towards arbitration had Live Nation not made the switch to New Era from JAMS. Live Nation defends this move by claiming that New Era is better equipped to handle disputes involving multiple customers, a common scenario in its ticketing business. However, the ticket-buyers involved in the lawsuit argue that Live Nation selected New Era because its processes favor the live music giant.
Last year, Judge George H Wu refused to mandate arbitration, deeming the change in arbitrator as an “unfair surprise” for the ticket-buyers and the arbitration process “procedurally unconscionable”. Live Nation is seeking to overturn this decision by the Ninth Circuit, though recent proceedings suggest this outcome is unlikely. The judges highlighted various issues with New Era’s rules, particularly the provision allowing the arbitrator to determine the arbitrability of questions, which one judge deemed as a conflict of interest.
Implications and Future Outlook
As the judges deliberate on the case, the possibility of it proceeding to court looms, running parallel to the US government’s separate lawsuit alleging Live Nation and Ticketmaster’s exploitation of market dominance in an anticompetitive manner. The outcome of this legal battle carries significant implications for Live Nation and the broader live entertainment industry, with potential repercussions for antitrust regulation and consumer protection.
In conclusion, the ongoing legal saga between Live Nation, ticket-buyers, and the judiciary underscores the complexities and controversies surrounding private arbitration in resolving disputes of this nature. The nuances of selecting arbitrators, the fairness of arbitration processes, and the balance between privacy and transparency in legal proceedings all come into sharp focus in this case, shaping the future landscape of legal recourse for stakeholders in the music and entertainment sector.