U.S. District Judge Sharon Johnson Coleman granted Live Nation Entertainment Inc. and its ticket-selling arm Ticketmaster Entertainment Inc.'s motion to compel arbitration in a lawsuit filed by Illinois resident and would-be Blake Shelton concertgoer John Tezak, ruling Tezak agreed to arbitration when he accepted the online ticket seller's terms of use.
Tezak had attempted to convince the court that a portion of the company's terms of use involving the role of an arbitrator were unclear and ambiguous and could be decided by courts instead of an arbitrator. Tezak relied on the term's language that any complaints involving events held in Illinois fall under the jurisdiction of the state and the Illinois Ticket Sale and Resale Act.
But the court held the portion of the terms and statute at issue only govern resold tickets, not tickets bought directly through Ticketmaster.
"In short, Tezak and defendants chose to delegate questions of arbitrability to the arbitrator. Tezak's arguments based on Illinois' resale statute and the similar Terms of Use language that contain Illinois-specific terms do not change this analysis or create an ambiguity because these provisions are not relevant under the circumstances," Judge Coleman said.
Tezak filed the proposed class action in April 2020 as the COVID-19 pandemic was strengthening its grip on the country. He sued on behalf of all customers nationwide who he says fell victim to the companies' refusal to offer refunds for postponed events that were in reality canceled.
Tezak claimed Ticketmaster "clarified" its refund policy in April — once the pandemic had begun — to say it will only refund canceled events, and not postponed concerts, even if the event has been indefinitely postponed, as was the case for a March 2020 Blake Shelton concert at the Allstate Arena in Rosemont, outside Chicago, to which Tezak paid $300 for two tickets.
Tezak alleges the change was an attempt by the company to hold on to customer's money "as a form of interest-free loan," according to the complaint.
By refusing to refund customers, Tezak accused the companies of protecting their own bottom lines at the expense of their customers. Tezak argues the companies knew certain widespread crises could disrupt their finances but failed to take adequate precautions. When the pandemic hit, instead of dealing with its own unpreparedness, Tezak alleges the companies shifted the financial losses to its customers.
The suit alleges the companies' handling of COVID-related refunds constituted a breach of contract, conversion and negligent misrepresentation, as well as violating the Illinois Consumer Fraud Act and ITSRA. He sought a court order forcing the companies to issue refunds for de facto canceled events and to stop marketing events as postponed when there is no clear rescheduled date in sight.
The suit was one of many proposed class actions filed against major corporations over COVID-19 cancellation policies, including against ticket resale giant StubHub, several major airlines, Six Flags Magic Mountain and others.
Representatives for the parties didn't immediately respond to requests for comment Thursday.
Tezak is represented by Steven D. Liddle and Nicholas A. Coulson of Liddle & Dubin PC.
Live Nation and Ticketmaster are represented by Timothy L. O'Mara, Daniel M. Wall, Andrew M. Gass and Nicholas J. Siciliano of Latham & Watkins LLP.
The suit is Tezak v. Live Nation Entertainment Inc. et al., case number 1:20-cv-02482, in the U.S. District Court for the Northern District of Illinois.
--Editing by Andrew Cohen.
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