Class Counsel is Named in COVID-19 MDL Against StubHub

Following the consolidation of four customer lawsuits in August 2020, class counsel was recently named in the MDL against ticketing company, StubHub. The case, In Re: StubHub Refund Litigation, is now proceeding in the Northern District of California, presided over by Judge Haywood S. Gilliam, Jr. This particular case represents one of the few COVID-19 related consumer lawsuits to successfully consolidate and move forward as an MDL.

The First Customer Complaint

In early April 2020, StubHub customer Matthew McMillan filed a class action against the company, as well as Last Minute Transactions, Inc. in the U.S. District Court for the Western District of Wisconsin. The plaintiff claims that StubHub failed to properly refund ticketholders when organizers canceled concerts due to the coronavirus pandemic. He asserts that StubHub promised purchasers that they would receive a full, money-back ticket refund for canceled events, as described in the StubHub FanProtect guarantee. The complaint also says that StubHub’s users paid premium prices and fees for StubHub tickets because of this guarantee. The plaintiff adds that his individual contract and each version of StubHub’s User Agreements explicitly incorporated the FanProtect guarantee terms into the defendant’s Additional Policies.

In a series of March 2020 communications, however, StubHub backed away from the refund guarantee. First, the company insisted that refunds for canceled events were still available but alternatively offered a coupon worth 120% of the original order towards a ticket for a live event of their choosing within the next 12 months. Next, StubHub said only the coupons were available. Later, a StubHub communication informed customers that the company had permanently suspended the refund policy unless a law required a refund.

Class Composition

The complaint defines class members as: “[a]ll persons residing in the United States or its territories who opened StubHub accounts before October 1, 2018 and used StubHub to purchase tickets to any event which was subsequently canceled or is canceled at any point from March 25, 2020 until the date that notice of this class action is disseminated to the Class, and to whom Defendants have not provided a refund.”

Cause of Actions & Remedy Sought

McMillan brings several causes of action in his early lawsuit. First is a breach of contract claim over StubHub’s failure to provide users with refunds for canceled events as required under their contract terms. Next is a claim that StubHub unlawfully interfered with the plaintiff’s property—the right to receive refunds for canceled events. The third cause of action is for negligent misrepresentation. The last few claims relate to violations of the California Consumers Legal Remedies Act, California Unfair Competition Law, and claims of false advertising.

The plaintiff wants the court to order StubHub to reverse the changes made to its refund policy for tickets purchased before March 30, 2020, and to stop issuing coupons in place of refunds to class members who have not requested them. Plaintiff McMillan also seeks monetary damages and restitution remedies.

MDL Consolidation

Bucking the trend of denying consolidation of other multidistrict lawsuits related to COVID-19—such as business interruption claims against insurance firms and actions against banks’ management of the Paycheck Protection Program—on August 6, 2020, the U.S. Judicial Panel on Multidistrict Litigation ordered the consolidation of four StubHub refund lawsuits. In addition to McMillan v. StubHub Inc., the panel transferred three other similar consumer suits to the Northern District of California—Alcaraz v. StubHub Inc., Kopfmann v. StubHub Inc., and Reynolds v. StubHub Inc. In the same order, the panel declined to include two lawsuits against Vivid Seats, LLC in the MDL.

Class Counsel is Appointed

In November 2020, Judge Gilliam appointed Tina Wolfson, of Ahdoot & Wolfson in Los Angeles, and Tiasha Palikovic, of Wittels McInturff Palikovic in Armonk, New York, to serve as interim class counsel for the consolidated cases. Palikovic serves on the plaintiffs’ steering committee in the consolidated Allergan breast implant cases in New Jersey. Wolfson is known for filing COVID-19 airline refund-related cases and serving as co-lead counsel in the privacy class action filed against Zoom Video Communications.

Both Wolfson and Palikovic expect StubHub to file a motion to compel arbitration of the disputes. The class counsel has already drafted a summary judgment motion for public injunctive relief for the class. Most recently, the parties met for a case management conference on December 9, 2020.

How Experts Can Help

As the class and plaintiffs’ counsel go to work, they are undoubtedly lining up expert witnesses to help with the case technicalities. The litigants will need qualified experts to help explain how contracts are established between buyer and seller in the context of e-commerce apps and websites like StubHub. Experts with experience in online ticketing will be especially helpful here.

The jury—and the parties during possible settlement negotiations—will also need expert help to decipher the complex rules and laws governing when and how parties can change terms in their contracts, such as refund guarantees articulated in online contracts. Given the added complication of the pandemic, expert insights will be critical for building a case on whether a breach of contract occurred and how consumers may be compensated fairly.