COVID-19: Vivid Seats Hit with Class Action Over Alleged Refusal to Issue Refunds [UPDATE]
Last Updated on April 27, 2021
Nellis et al. v. Vivid Seats Ltd. et al.
Filed: April 23, 2020 ◆§ 1:20-cv-02486
Vivid Seats owes refunds for events canceled as a result of the COVID-19 pandemic, a proposed class action claims.
Case Updates
April 27, 2021 – Settlement Website Is Live: Claims Period to Open Soon
The official website for the $7.5 million settlement detailed below is live and can be found here:
https://ticketpurchasesettlement.com/
The deadline by which to file a claim, which can be done here as soon as the claims process opens, is August 30, 2021. Claim forms can be submitted online or downloaded, filled out and submitted by mail.
Consumers who bought a ticket through Vivid Seats on or before April 1, 2021 to an event that, at any time from September 29, 2016 through April 1, 2021, was canceled may be able to obtain a cash payment or other relief from the proposed settlement.
Likewise, those who bought a ticket through Vivid Seats on or before April 1, 2021 to an event that, at any time from September 29, 2016 through April 1, 2021, was postponed or rescheduled may be entitled to a cash payment or other relief from the proposed deal if the event is canceled.
A final approval hearing is scheduled for August 10, 2021. Answers to frequently asked questions about the lawsuit and settlement can be found here.
March 17, 2021 – Lawsuit Settled for $7.5 Million
The plaintiffs behind the proposed class action detailed on this page have asked a federal judge to preliminarily approve a $7.5 million settlement with Vivid Seats.
According to a 34-page memo in support of the plaintiffs’ motion for preliminary settlement approval, found here, the monetary part of the proposed deal is slated to cover consumers in the U.S. and Canada who bought tickets through Vivid Seats to events that were canceled. If approved, the settlement would also require Vivid Seats to universally extend both existing, non-expired credits held by members of the class through December 31, 2022 and a protocol allowing consumers to choose between receiving cash or vouchers upon the cancellation of any postponed or rescheduled event.
The memo, submitted March 11, describes the proposed settlement as the result of good-faith negotiations and a positive outcome in the face of “hotly litigated, extraordinarily costly, time-consuming” litigation that may not have produced a mutually beneficial outcome for anyone.
“Accordingly, this Settlement Agreement clearly provides outstanding benefits to Plaintiffs and the Class and is the result of good faith negotiations that represent the best interest of the parties,” the documents state.
Vivid Seats holds that it is not liable for damages stemming from its alleged failure to pay refunds and reserves the right to file a motion to compel arbitration on an individual basis and dismiss the suit.
A settlement website is expected to be launched under the deal but was not available at the time of this posting. Stay tuned for updates or sign up for our free weekly newsletter for the latest.
Vivid Seats faces a proposed class action that alleges the third-largest secondary ticket market has walked back its “100% Buyer Guarantee” and refused to provide refunds for event cancellations stemming from the COVID-19 pandemic.
The 37-page complaint against Vivid Seats Ltd. and Vivid Seats LLC alleges the companies’ efforts to “retroactively discontinue” their longstanding 100-percent money-back assurance is an attempt to force consumers to shoulder the financial fallout from the “entirely foreseeable” scenario that world occurrences may force the simultaneous cancellation of numerous public events.
The defendants’ refusal to issue refunds amounts to a breach of contract between Vivid Seats and buyers, as well as unjust enrichment, negligent misrepresentation and violations of state consumer protection laws, the lawsuit alleges.
As the case tells it, the core of Vivid Seats’ business model, which allows ticket sellers to connect with buyers, creates the potential for disaster should event cancellations happen en masse. According to the suit, Vivid Seats immediately pays ticket brokers, who typically buy large quantities of tickets to sell on the secondary market, as soon as the tickets are delivered to buyers instead of waiting until the event occurs. By paying ticket brokers immediately for their sales, Vivid Seats ensures that their liquidity is freed up in order to allow the brokers to buy more tickets to sell on the site, a cycle that continues “on and on,” the lawsuit says.
Where trouble arises, the suit explains, is that more cancellations equates to more money Vivid Seats must shell out in order to cover consumers in search of refunds, money that the defendants have already paid to sellers. From the complaint:
“The problem here is apparent to any thinking person. If Vivid Seats has already paid the seller for the tickets, but the event still has not occurred, it will have to come up with the money on its own if it needs to honor the 100% Buyer Guarantee in the event of a cancellation. The more cancellations that occur, the more money Vivid Seats needs to come up with.
Astonishingly, Vivid Seats either did not see the problem with this business model - or it was too busy making money to care. But eventually, as it became clear that many events would be canceled and around the same time it attempted to revoke its guarantees to buyers, Vivid Seats unilaterally changed its seller policy to make payment only after the event had occurred.”
As the novel coronavirus crisis made it apparent that large public gatherings would not be taking place in the near future, Vivid Seats, for the first time, introduced the option that buyers could choose to receive a 120-percent credit in lieu of a cash refund, the lawsuit says. This shift, and the introduction of a “Rewards Cash loyalty credit,” was no more than a quiet about-face from the defendants’ 100-percent buyer guarantee, the lawsuit alleges. More from the suit:
“Disgracefully, Vivid seats quietly added an additional requirement for any customers who wish a cash refund instead of a ‘Rewards Cash loyalty credit.’ Customers who wish a refund must now contact the customer service team within 7 days of the event’s cancellation or else their claim to a cash refund is purportedly extinguished. Previously, a full cash refund was the default.”
The plaintiffs ask the court to order Vivid Seats to reverse its alleged retroactive refund policy changes, cease issuing “loyalty credits” in lieu of refunds to those who have not requested such vouchers and pay other damages to proposed class members.
ClassAction.org’s coverage of COVID-19 litigation can be found here and over on our Newswire.
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