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StubHub Told Claims Will Stay in Court in COVID-19 Refund Litigation

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Last Friday, Judge Haywood S. Gilliam opined on a motion to compel arbitration and dismiss a complaint filed by ticket purchasers concerning StubHub’s refund policy for events affected by the COVID-19 pandemic. The 11-page ruling denied both, finding that StubHub failed to carry its burdens while expressing exasperation that “years after this case was filed, it remains mired in litigation regarding the pleadings.”

The consumer lawsuit alleges that StubHub misrepresented its refund policy by, in March 2020, failing to explain that it would no longer offer a money back guarantee, but instead would give purchasers a 120% credit in the event of show cancellation. The users allege breach of contract and violations of various California consumer protection statutes.

Last November, the court ruled that the plaintiffs who purchased event tickets using a web browser were on notice of StubHub’s arbitration provision, compelling them to arbitration, but not those who used the mobile app. StubHub has since renewed its motion to compel arbitration and to dismiss most causes of action as deficiently pleaded.

In last week’s opinion, Judge Gilliam once again determined that StubHub failed to produce evidence showing that the plaintiffs assented to the arbitration agreement when they purchased tickets on the app. The court considered arguments that the plaintiffs agreed either before or after their ticket purchase to arbitrate their claims, but declined them as unsupported.

As to the defendant’s dismissal bid, the court left all challenged claims in place noting that the briefing of this motion and others have been plagued with “inefficient tactics.” Judge Gilliam opined that some of StubHub’s arguments were premature in view of the fact that at the pleading stage, the court must accept every allegation as true.

StubHub also challenged the plaintiffs’ standing for failing to plead that they relied on misrepresentation about the ticket seller’s refund policy in their state statutory claims. The court overrode that objection, citing allegations that the plaintiffs relied on and were misled by the company’s prior representations that they would receive a cash refund for canceled events.

In closing, the court implored the parties “to work together efficiently and cooperatively to move this case forward.”

The plaintiffs are represented by Ahdoot & Wolfson PC and Wittels McInturff Palikovic. StubHub is represented by McDermott Will & Emery LLP.

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