June 13 (Reuters) - A firm that developed rules for
large scale arbitrations has asked the U.S. Supreme Court in a
case involving entertainment giant Live Nation to reject
a ruling that criticized the procedures as unfair to consumers.
In a friend-of-the-court brief filed on Thursday, dispute
resolution firm New Era ADR said the 9th U.S. Circuit Court of
Appeals had last year misinterpreted its rules in a decision
rejecting Live Nation's efforts to require consumers to agree to
arbitrate any disputes when they purchased tickets.
Live Nation was accused of charging artificially high ticket
prices in a lawsuit that the event company tried unsuccessfully
to move them into arbitration. The 9th Circuit had last year
rejected New Era's arbitration rules and said the consumer
plaintiffs could sue Live Nation in a proposed class action in
federal court.
New Era is not a party in the lawsuit. It submitted a filing
to the justices as a friend of the court, defending its
practices. Live Nation has denied any wrongdoing.
The case, which the Supreme Court has not yet agreed to
hear, could give the justices a fresh chance to weigh the
contours of the Federal Arbitration Act and whether so-called
mass arbitration fits into the decades-old law.
Live Nation in its petition to the high court said
plaintiffs' lawyers were increasingly pursuing mass arbitration
as a pressure tactic to force companies to settle what it called
meritless claims.
Live Nation did not immediately respond to a request for
comment. A lead attorney for the plaintiffs declined to comment.
New Era chief executive Rich Lee in a statement said the
company was "focused on removing gamesmanship and impediments to
ensure that all parties have their cases heard and efficiently
resolved on their merits."
Companies often promote arbitration as a more efficient way
for individual consumers to air their disputes outside of court.
As more companies have employed arbitration agreements to
steer consumer claims away from the federal courts, plaintiffs'
lawyers have increasingly turned to mass arbitrations, filing
thousands of individual arbitration demands that are nearly
identical.
Live Nation in 2021 had turned to New Era, a new dispute
resolution company, to use its mass arbitration platform.
A federal judge in 2023 had ruled that Live Nation could not
enforce its arbitration provisions, and the 9th Circuit had last
year upheld the decision.
The 9th Circuit had determined that New Era's mass
arbitration rules were "so dense, convoluted and internally
contradictory to be borderline unintelligible."
New Era's Supreme Court filing said its rules "have remained
centered on keeping mass arbitration workable, accessible, fast,
and merits-based for all parties involved."
In a separate filing on Thursday, lawyers for the consumers
urged the justices to leave the 9th Circuit's order in place.
The case is Live Nation Entertainment ( LYV ) et al v. Skot Heckman
et al, U.S. Supreme Court, No.
For plaintiffs: Warren Postman of Keller Postman, and Kevin
Teruya of Quinn Emanuel
For Live Nation: Roman Martinez and Tim O'Mara of Latham &
Watkins
For New Era: Sandra Musumeci of Kelley Drye & Warren
Read more:
Class action administrators, banks accused of kickback
scheme in new lawsuits
Lawsuit accuses American Arbitration Association of
monopolizing consumer market
Samsung defeats consumers' mass arbitration demand in US
appeals court