StubHub scored a partial legal victory in a California court this week, convincing the judge in a lawsuit over its refund policy shift amid COVID-19 to move much of the legal action into arbitration rather than trial. United States District Judge Haywood S. Gilliam Jr. issued the order Monday from the Northern District of California, moving a large number of the Class Action claims away from open court.
StubHub was sued last year after it changed its policies for events that had been cancelled due to COVID-19. Rather than giving consumers cash refunds in the event of a cancellation, the company switched to giving vouchers good towards the purchase of tickets to future events on the ticket resale marketplace. The only exceptions to this policy were in states that require a cash refund by law, leaving many consumers no option but the credit on the marketplace.
StubHub has already settled some actions related to the policy shift, which came amid the companies ill-timed sale to Viagogo for $4 billion, which closed just before the pandemic shut down live events across the globe and was held up from being fully complete until this fall when the company agreed to spin off all but its core North American business to satisfy competition concerns brought up by the UK’s Competition and Markets Authority. It agreed to a settlement of claims with the Attorneys General in nine states, meaning payouts of close to $20 million in refunds to more than 75,000 consumers.
Putting fans first has always been central to the StubHub business,” a statement published by StubHub following the settlements reads. “Adjusting our refund policy for canceled events during the pandemic was a difficult decision, but a necessary one at the time. As soon as circumstances allowed, StubHub achieved its goal of providing impacted customers the choice to keep the 120% credit they were issued when their event was canceled or receive a cash refund.
“We appreciate the patience of our customers, partners and regulators as we worked toward providing that choice, and we appreciate the ongoing dialogue with the states as we worked to formalize the actions StubHub voluntarily took beginning in May 2021 through this multi-state agreement.”
In remaining claims, StubHub has maintained that users had agreed to a provision within its user agreement that required disputes to be settled via arbitration rather than civil court. Such clauses are how Ticketmaster has often saved itself from consumer litigation in the past as well, booting cases away from a forum where precedent regarding business practices could be set in an unfavorable fashion.
In his order, Gilliam agreed that StubHub had properly notified consumers of the arbitration requirement in purchases that took place on its website, meaning that any consumers who purchased in that manner must see their claims moved to arbitration. However, those who purchased tickets via the company’s mobile ticketing app were not sufficiently notified of the clause, meaning their cases can continue.
For those who still have their court hopes alive, the next hearing on the matter is scheduled for December 7, 2021.
The full document (and explanation of the decision) is available here (PDF opens in new window)