Judge Edward M. Chen recently granted Ticketmaster’s request to compel arbitration in a class-action lawsuit filed by Derek Hansen, a music fan who purchased two Rage Against the Machine tickets in February of this year. Hansen’s complaint – one of several levied against Ticketmaster amid the pandemic – accuses the platform of changing its refund policy following the COVID-prompted cancellation of most concerts and crowd-based events.
In explaining his decision, the Northern District of California judge emphasizes that the distinction at the center of the litigation is whether Hansen possessed “constructive knowledge of the arbitration agreement – or rather, of the TOU which contain the arbitration agreement.”
Worth noting here is that the pertinent portion of Ticketmaster’s TOU from the time of purchase reads: “These terms contain an arbitration agreement and class action waiver, whereby you agree that any dispute or claim relating in any way to your use of the Site…will be resolved by binding, individual arbitration, rather than in court, and you waive your right to participate in a class action lawsuit or class-wide arbitration.”
And, after reiterating that state law determines the validity of arbitration agreements, Judge Chen highlights precedent established by the Ninth Circuit Court of Appeals in 2014’s Nguyen v. Barnes & Noble. In the case, the court identified “clickwrap” agreements (those with an “I Agree” checkbox) and “browsewrap” agreements (wherein TOS are featured in hyperlinks at the screen’s bottom).
Barnes and Noble lost the case, as the court ruled that the browsewrap TOS and arbitration clause at hand didn’t constitute a binding contract, given that customers weren’t expressly provided with notice or compelled to take an “affirmative action” demonstrating that they understood the stipulations.
Ticketmaster’s TOS (and, in turn, arbitration clause) were displayed in the style of “modified clickwrap agreements” when the plaintiff bought the Rage Against the Machine tickets, with the hyperlinked section featured (albeit “in a slightly smaller font size” than the other text) “right above” the sign-in button. (This layout, including the specified positioning and colors, appears to be the same presently.)
Moreover, the judge notes a ruling from a 2018 lawsuit concerning Ticketmaster’s fine print, in which the court found: “Ticketmaster’s website provided sufficient notice for constructive assent, and therefore, there was a binding arbitration agreement between Lee and Ticketmaster.”
Given this point and the decidedly similar layout on Ticketmaster’s website today, Judge Chen indicates in finishing that the plaintiff did in fact consent to the arbitration agreement when buying his passes.
“Accordingly, the Court concludes, as in Lee [the above-mentioned 2018 suit], that Mr. Hansen validly assented to the Ticketmaster TOU when he clicked the Sign In button, as required before he could move on to purchase tickets for the Rage concerts,” writes Judge Chen.
“By assenting to the TOU, Mr. Hansen also assented to the arbitration agreement contained therein.”