CHICAGO — Ticket broker Vivid Seats appears to be headed toward settlement of a class action lawsuit from customers who accused the brokerage firm of mismanaging refunds and credits for events delayed or canceled during COVID-19 shutdowns.
Attorneys Steven Liddle and Nicholas Coulson, of Liddle & Dubin, of Detroit, are representing five named plaintiffs in the action. On March 11 they filed a motion for preliminary settlement in federal court in Chicago, asking U.S. District Judge Robert Dow Jr. to sign off on a plan in which Vivid would pay $7.5 million to end the lawsuit. The attorneys are requesting up to $2.5 million for their work, while most people would get either cash refunds for portions of past ticket purchases, or credit for future ticket purchases.
The named plaintiffs in the action would get up to $2,500 as class representatives. Named plaintiffs were identified as Timothy Nellis, Janel Dranes, Luca Sousa, David Castillo and Edward Camarena.
The plaintiffs filed their breach of contract lawsuit in April on behalf of thousands of Vivid customers. Other claims include breach of express warranty, conversion, unjust enrichment and negligent misrepresentation, as well as several state law violations.
As events were canceled due to COVID, Vivid gave customers only seven days to request a refund before they were required to accept a credit with an expiration date.
“These credits held little or no value,” according to the motion, “because it was entirely uncertain whether the event would take place, or, even if it did, whether it would be safe to attend the event.”
According to the motion for approval, each class member who submits an approved claim form would be entitled to the purchase price of their ticket to a canceled event, less any money they may already have been paid or any credits they may have spent. If claim totals exceed the settlement pool, cash payments will be prorated and the remainder will be made up in Vivid credit. If less money is requested than is available, remaining money will be paid out on a prorated basis to validated claimants.
As part of the settlement, Vivid will extend all non-expired credits through the end of 2022. If any event currently listed as postponed or rescheduled is later canceled, Vivid will give customers 21 days to choose to have either the cash price of their ticket or a 110% credit that would be valid until Dec. 31, 2022.
“In light of the continuing distribution and availability of VOCID-19 vaccines, this extension all but ensures that settlement class members who were previously stuck with potentially unusable credits will now be able to recoup the full value of their purchases in one form or another, including cash if they so choose,” the plaintiffs wrote in their motion for settlement.
Plaintiffs’ attorneys said the settlement should be approved, in large part, to forestall Vivid’s threat to seek to arbitrate claims on an individual basis. They noted a clause in Vivid's usage terms prohibits class action lawsuits.
Liddle & Dubin said it investigated several other ticket brokerage firms and found similar practices throughout the industry, leading to other lawsuits.
“That thorough investigation revealed fundamental gaps in the refund practices of numerous online ticket resale companies, several of whom have allegedly failed to provide 100% guaranteed refunds to customers in the event of mass cancellations related to the COVID-19 pandemic despite clear, unambiguous and well-advertised promises to do so,” the plaintiffs' lawyers wrote in their motion.
“Essentially, because online secondary ticket market companies pay the seller immediately following the delivery of tickets, the plaintiffs allege that the companies have not taken appropriate measures to ensure that adequate reserve funds are available to honor their 100% refund guarantees in the event of widespread event cancellations.”
Vivid Seats has been represented by attorney Mark S. Mester, and others with the firm of Latham & Watkins LLP, of Chicago.