Live Nation Ruling Chills Modern Arbitration, 9th Circ. Told

Judge: Claims Unconscionable Under 'Totality' Test

A federal appeals court in San Francisco has ruled that arbitration agreements used by Live Nation Entertainment, the world's largest concert promoter, are unconscionable and unenforceable.

The 9th U.S. Circuit Court of Appeals ruled 2-1 on Wednesday that the agreements, which require consumers to resolve disputes through arbitration rather than in court, are "procedurally and substantively unconscionable" under California law.

Procedural Unconscionability

The court found that the agreements were procedurally unconscionable because they were presented to consumers on a take-it-or-leave-it basis, with no opportunity to negotiate the terms.

The court also found that the agreements were substantively unconscionable because they were one-sided and unfair to consumers.

• For example, the agreements required consumers to pay all of the costs of arbitration, even if they won their case.
• The agreements also limited the amount of damages that consumers could recover.
• And the agreements barred consumers from bringing class action lawsuits.

Totality of Circumstances

The court applied a "totality of the circumstances" test to determine whether the agreements were unconscionable.

The court considered the following factors:

• The take-it-or-leave-it nature of the agreements
• The lack of opportunity to negotiate the terms
• The one-sided and unfair terms of the agreements
• The impact of the agreements on consumers

The court concluded that the totality of the circumstances showed that the agreements were unconscionable.

Implications for Other Arbitration Agreements

The 9th Circuit's ruling is a significant victory for consumers who have been forced to arbitrate their claims against Live Nation.

The ruling could also have implications for other arbitration agreements that are used by businesses to limit their liability.

The 9th Circuit's ruling is a reminder that businesses cannot use arbitration agreements to shield themselves from liability for their wrongful conduct.

If you have been forced to arbitrate a claim against Live Nation, or if you have any questions about the enforceability of an arbitration agreement, you should contact an attorney.