LOS ANGELES (Legal Newsline) - Ticketmaster has agreed to a preliminary settlement of up to $400 million in a class action lawsuit alleging its order processing fee was not for processing, but for profit.
Those who purchased tickets on Ticketmaster between Oct. 21, 1999, and Feb. 27, 2013, may be entitled to a credit of $2.25 per ticket for a future ticket purchase, after the company agreed to settle the long-standing lawsuit that began in October 2003.
Ticketmaster denies any wrongdoing but has agreed to settle the class action lawsuit to avoid the burden and expense involved with ongoing litigation.
Plaintiffs' counsel is seeking nearly $15 million in attorneys fees and up to $1.5 million in expenses.
The settlement was preliminarily approved on April 30 by Judge Kenneth R. Freeman, who found that the settlement "is a product of informed, arm's-length negotiations which occurred with considerable input and assistance of two well-respected mediators; has no apparent deficiencies; and falls well within the range of reasonableness which would be a prerequisite for final approval," according to the approval order.
Last year, Freeman rejected a previous settlement deal worth up to $280 million, finding that the settlement did not provide real value to class members.
The new settlement will provide class members with nearly $386 million in discount codes.
Class members will receive a discount code for each purchase transaction made during the class period, up to a maximum of 17 discount codes.
Each discount code is worth a $2.25 credit that can be applied to future purchases of tickets from the Ticketmaster website.
Each UPS subclass member will receive discount codes worth a $5 credit to be used to pay for future UPS charges when ordering tickets from the Ticketmaster website. Members of the subclass can receive a maximum of 17 UPS discount codes.
Class members will receive the discount codes by e-mail within 90 days of final approval of the class action settlement.
If class members do not redeem at least $42 million worth of discount codes, Ticketmaster will make free tickets to certain events available to class members, according to settlement documents.
A hearing for the final approval has been scheduled for Jan. 13.
Five plaintiffs sued Ticketmaster for "misleading" fees more than 10 years ago. They claimed Ticketmaster violated California's false advertising and unfair competition laws.
The plaintiffs claimed that they were charged "order processing fees" and "UPS delivery fees," and then also charged "convenience fees" and "facility fees."
Essentially, all the differently named fees were too similar and were merely "secret profit-generators" for Ticketmaster, according to the suit.
The plaintiffs also claimed the company did not spend all of it on the purposes it implied the fees were supposedly for and, had they known this, they would not have paid the charges or would have chosen a different company other than Ticketmaster in which to purchase their tickets.
The plaintiffs were represented by Robert J. Stein III, W. Michael Hensley and Claire M. Schmidt of AlvaradoSmith APC; and Steven P. Blonder of Much Shelist Denenberg Ament & Rubenstein PC.
Ticketmaster was represented by Frank Merideth Jr., Jeff E. Scott and Gregory A. Nylen of Greenberg Traurig LLP; and Gail Lees and Kahn Scolnick of Gibson Dunn & Crutcher LLP.
Superior Court of California at Los Angeles case number: BC-304565
From Legal Newsline: Kyla Asbury can be reached at email@example.com.