Van Iderstine V Live Nation Motion For Discovery

Case 2:20-cv-03888-GW-GJS Document 29-1 Filed 06/24/20 Page 1 of 12 Page ID #:459
1 QUINN EMANUEL URQUHART & SULLIVAN, LLP

Frederick A. Lorig (Bar No. 057645)
2
fredlorig@quinnemanuel.com
3 Kevin Y. Teruya (Bar No. 235916)
kevinteruya@quinnemanuel.com
4
Adam B. Wolfson (Bar No. 262125)
5 adamwolfson@quinnemanuel.com
865 South Figueroa Street, 10th Floor
6
Los Angeles, California 90017-2543
7 Telephone: (213) 443-3000
Facsimile: (213) 443-3100
8
9 Attorneys for Plaintiffs Olivia Van Iderstine and
Mitch Oberstein, on behalf of themselves and all
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those similarly situated
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12 UNITED STATES DISTRICT COURT
13 CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
14 Olivia Van Iderstine and Mitch CASE NO. 2:20-cv-03888-GW-GJS
Oberstein, on behalf of themselves and
15 all those similarly situated, MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
16 Plaintiffs, PLAINTIFFS’ MOTION FOR
DISCOVERY RELATED TO
17 v. WHETHER A VALID
ARBITRATION AGREEMENT
18 Live Nation Entertainment, Inc., and EXISTS
Ticketmaster LLC,
19 The Honorable George H. Wu
Defendants.
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PLAINTIFFS’ MOTION FOR DISCOVERY RELATED TO WHETHER A
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VALID ARBITRATION AGREEMENT EXISTS
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Case No. 2:20-cv-03888-GW-GJS
PLAINTIFFS’ MOTION FOR ARBITRATION-RELATED DISCOVERY
1 TABLE OF CONTENTS
2 PRELIMINARY STATEMENT ............................................................................... 1
3 BACKGROUND ....................................................................................................... 3
4 DEFENDANTS SHOULD BE REQUIRED TO PROVIDE LIMITED
DISCOVERY REGARDING WHETHER A VALID ARBITRATION
5 EXISTS............................................................................................................ 5
6 CONCLUSION.......................................................................................................... 9
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i Case No. 2:20-cv-03888-GW-GJS

1 PRELIMINARY STATEMENT
2 This class action concerns an anticompetitive scheme by Defendants
3 Ticketmaster, LLC (“Ticketmaster”) and Live Nation Entertainment, Inc. (“Live
4 Nation”) to monopolize the primary and secondary markets for concert ticketing
5 services at major concert venues across the United States. Among other things (as
6 detailed in filings from the Antitrust Division of the Department of Justice and in
7 Plaintiffs’ complaint here), Defendants repeatedly violated a consent decree they
8 entered with the Department of Justice in 2010, which was meant to prevent the
9 exact type of unrivaled dominance they now command. Defendants also engaged in
10 numerous other anticompetitive acts detailed in the complaint, the net result of
11 which has been enormous profits over the past decade.
12 This motion concerns whether, in connection with their pending motion to
13 compel arbitration, Defendants should be required to provide targeted discovery
14 related to whether a valid arbitration agreement exists. See Simula, Inc. v. Autoliv,
15 Inc., 175 F.3d 716, 726 (9th Cir. 1999) (noting the Federal Arbitration Act (“FAA”)
16 “provides for discovery and a full trial” where the agreement to arbitrate is in
17 dispute). Defendants have refused to provide such information, notwithstanding the
18 fact that courts in this Circuit and others have allowed discovery on this exact issue,
19 as well as issues such as whether an arbitration agreement is unconscionable. E.g.,
20 Hamby v. Power Toyota Irvine, 798 F. Supp. 2d 1163, 1165 (C.D. Cal. 2011)
21 (granting motion to compel discovery on the issue of whether arbitration agreement
22 was unconscionable); see also Arena v. Intuit, Inc., 2020 WL 1189849, at *5 (N.D.
23 Cal. Mar. 12, 2020) (court previously granted motion to compel discovery on issue
24 of whether there was assent to an arbitration clause under similar “sign in” and “sign
25 up” processes as here).
26 In fairness, Plaintiffs submit that they should receive such discovery before
27 opposing Defendants’ motion to compel arbitration since this information is solely
28 in Defendants’ hands. As brazen as their scheme has been, Defendants have never
1 Case No. 2:20-cv-03888-GW-GJS

1 been held fully accountable for it by consumers. As they have in other cases,
2 Defendants argue that Plaintiffs agreed to arbitration clauses that are buried in
3 Terms of Use on www.ticketmaster.com, www.livenation.com, and the
4 Ticketmaster mobile application. (ECF No. 25-1, Defendants’ Motion to Compel
5 Arbitration, at 7-13.) The Terms of Use are presented to users in a “browsewrap”-
6 type format that does not affirmatively require consumers to read the Terms, or
7 indicate they have read them, before making a purchase. See Wilson v. Huuuge,
8 Inc., 944 F.3d 1212, 1221 (9th Cir. 2019) (denying arbitration based on alleged
9 acceptance of browsewrap terms of use).
10 The discovery Plaintiffs seek is virtually identical to that which the Court
11 recently permitted in Arena v. Intuit, Inc., where based in part on Court-ordered
12 discovery, Judge Breyer found that a website layout strikingly similar to
13 Ticketmaster’s failed to afford consumers reasonable notice of its terms of use, in
14 part due to data showing that very few users ever read those terms of use. 2020 WL
15 1189849, at *5 (N.D. Cal. Mar. 12, 2020). Similarly, Plaintiffs here seek the
16 number of “clicks” for each sign in to ticketmaster.com and livenation.com, as well
17 as the number of clicks on the Terms of Use Defendants cite in their motion.
18 Plaintiffs intend to show on opposition that ticketmaster.com and livenation.com are
19 designed in a way to actively dissuade consumers from knowing or understanding
20 that the Terms of Use are something they can or should read. The requested
21 discovery thus relates directly to whether Plaintiffs had reasonable notice of the
22 Terms of Use, and therefore whether Plaintiffs assented to any arbitration agreement
23 contained in the Terms of Use.
24 This is a fact-laden, threshold dispute that carries profound consequences,
25 and, to the best of Plaintiffs’ knowledge, has never been presented to any court
26 regarding these Terms of Use, whether in this Court’s previous Dickey decision or in
27 the Ninth Circuit’s recent unpublished (and therefore non-precedential) Lee
28 decision. (ECF No. 28, O’Mara Decl. Exs. B & C) (Dickey and Lee opinions). Lee

1 did not cite nor distinguish the earlier published decision in Wilson. Plaintiffs also
2 anticipate raising other arguments that were not previously briefed in Dickey or Lee,
3 as described more fully below, including that the Terms of Use and their delegation
4 clause are unconscionable under a recent decision from the California Supreme
5 Court rejecting arbitration because of an unconscionable contract of adhesion. See
6 OTO, L.L.C. v. Kho, 8 Cal. 5th 111 (2019), cert. denied, 2020 WL 3038293, at *1
7 (June 8, 2020). Plaintiffs will also argue that their claims are subject to an express
8 exception to arbitration for claims involving the “conditional license” Defendants
9 grant to consumers who purchase tickets on Ticketmaster’s website and mobile
10 application, because Plaintiffs allege that Defendants abuse the conditional license
11 in order to stifle competition in the secondary market for concert ticketing services.
12 Infra at 3-4.
13 Plaintiffs therefore respectfully request that the Court authorize this limited,
14 specific discovery into the underlying facts of alleged assent to arbitration and order
15 the parties to submit a proposed schedule for the completion of such discovery,
16 subject to the Court’s approval. See Egan v. Live Nation Worldwide, Inc., 764 F.
17 App’x 204, 208 (3d Cir. 2019) (“District courts should decide motions to compel
18 arbitration using a summary-judgment standard only when there is no genuine
19 dispute of material fact. When there is such a dispute, the court should hold a trial
20 to resolve it.”).
21 BACKGROUND
22 This case is at its earliest stages. Plaintiffs filed their complaint on April 28,
23 2020. (ECF No. 1.) Defendants then disclosed that they planned to move to compel
24 arbitration, and the parties worked cooperatively on a briefing schedule for
25 Defendants’ motion, which they filed on June 19, 2020. (ECF No. 25.)
26 In the course of discussing the briefing schedule, Plaintiffs explained to
27 Defendants the grounds on which they will likely oppose Defendants’ motion.
28 These include, among other arguments, that the Terms of Use lack essential terms—

1 and are therefore invalid as a matter of law—because they do not identify the
2 supposedly contracting Ticketmaster or Live Nation entities; 1 in any event, Live
3 Nation Entertainment, Inc., the parent company, is not a party to any arbitration
4 agreement with Plaintiffs; the “conditional license exception” to the arbitration
5 agreement—which permits aggrieved consumers to file suit in this Court—applies
6 to the claims here; the Terms of Use and their delegation clause, as demonstrated by
7 Defendants’ motion to compel, are unconscionable; and, as most relevant to this
8 motion, Plaintiffs lacked actual or constructive notice of the Terms of Use, and thus
9 did not assent to any arbitration agreement contained in the Terms of Use. To help
10 streamline the briefing on Defendants’ motion, Plaintiffs requested on May 28 (i.e.,
11 three weeks before Defendants’ motion was due) that Defendants provide
12 information related to whether a valid arbitration agreement exists, including the
13 following data:
14  the total number of times users signed into www.ticketmaster.com from
15 January 1, 2010 to the present;
16  the total number of times users clicked to view the Terms of Use on
17 www.ticketmaster.com or any other website Defendants believe relevant
18 to the alleged arbitration agreements in this case during the same time
19 period;
20  the total number of times users signed in to the Ticketmaster mobile
21 application during the same time period; and
22  the total number of times users clicked to view the Terms of Use in the
23 Ticketmaster mobile application during the same period.
24 In a subsequent meet and confer, Plaintiffs explained that this information is
25 relevant because it will provide empirical evidence regarding whether
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References to “Ticketmaster’s” or “Defendants’” Terms of Use throughout
28 this brief should not be read to suggest otherwise.

1 Ticketmaster’s website and app do, in fact, provide users with reasonable notice of
2 the Terms of Use. If it turns out that, as Plaintiffs suspect, the vast majority of users
3 do not view the Terms of Use, that would tend to show that the website and app
4 provide insufficient notice of the Terms of Use, and thus the arbitration agreement
5 contained in it.
6 In response to Plaintiffs’ requests, Defendants have provided some basic
7 information about Plaintiffs’ ticket purchases (i.e., the dates of certain purchases and
8 the specific websites on which Defendants believe the purchases were made). But
9 Defendants have otherwise refused to engage in meaningful discovery, including on
10 the vital issue of whether the Ticketmaster app and ticketmaster.com provide
11 reasonable notice of the Terms of Use. In other words, Defendants’ position
12 appears to be that Plaintiffs and the Court should take their arguments that
13 consumers had reasonable notice of their Terms of Use on blind faith, rather than
14 engaging in independent fact-finding based on hard evidence showing that
15 Defendants designed the website and app to push consumers past the Terms of Use
16 and their arbitration clause without understanding the supposed import of that
17 decision. As set forth below, the Court should reject this unfair and one-sided
18 approach to arbitration motion practice, just as courts in this Circuit and others have
19 done.
20 DEFENDANTS SHOULD BE REQUIRED TO PROVIDE LIMITED
21 DISCOVERY REGARDING WHETHER A VALID ARBITRATION EXISTS
22 Defendants bear the burden of showing that Plaintiffs assented to a valid
23 arbitration agreement. See, e.g., Wilson, 944 F.3d at 1219 (“the party seeking to
24 compel arbitration[] must prove the existence of a valid agreement by a
25 preponderance of the evidence”) (citations omitted). This is a fact-intensive dispute.
26 See, e.g., Metter v. Uber Techs., Inc., 2017 WL 1374579, at *4 (N.D. Cal. Apr. 17,
27 2017) (“Metter has raised a genuine issue of fact concerning his notice of, and
28 assent to, Uber’s terms of service. It is therefore improper to conclude as a matter of

1 law that Metter had actual notice of Uber’s terms of service, or that he was on
2 inquiry notice of the terms of service and affirmatively assented to them, and the
3 motion to compel arbitration must be denied.”); Berkson v. Gogo LLC, 97 F. Supp.
4 3d 359, 366 (E.D.N.Y. 2015) (describing the “central factual-legal question in the
5 case” as whether plaintiffs were “given effective notice of the need to make inquiry
6 (‘inquiry notice’) of the ‘terms of use’”). Because this threshold issue is in dispute,
7 Plaintiffs are entitled to discovery on this subject. See Alvarez v. T-Mobile USA,
8 Inc., 822 F. Supp. 2d 1081, 1085 (E.D. Cal. 2011) (“With respect to the first
9 threshold issue, formation of an agreement, [plaintiff] is entitled to discovery.”).
10 The right to such discovery flows from the FAA itself, as well as from the
11 Federal Rules of Civil Procedure. The FAA allows courts to grant motions to
12 compel arbitration only after “hear[ing] the parties” and being “satisfied that the
13 making of the agreement for arbitration or the failure to comply therewith is not in
14 issue.” 9 U.S.C. § 4; see also Simula, 175 F.3d 716. Indeed, the Third Circuit
15 recently held that a district court was required to “hold a trial to resolve” the issue of
16 whether a consumer entered into an arbitration agreement with one of Defendants’
17 affiliates. Egan, 764 F. App’x at 208.
18 Here, Plaintiffs are not even seeking the full trial to which they are entitled
19 under the FAA; they are seeking limited discovery related to whether an enforceable
20 agreement to arbitrate exists. Case law from this circuit and others confirms
21 Plaintiffs are entitled to this information. E.g., Hicks v. Citigroup, Inc., 2012 WL
22 254254, at *1 (W.D. Wash. Jan. 26, 2012) (“Courts have permitted limited
23 discovery as to arbitrability where parties have placed the validity of the arbitration
24 agreement in issue.”); Hamby, 798 F. Supp. 2d 1163 (allowing discovery on the
25 issue of whether arbitration agreement was unconscionable); Dun Shipping Ltd. v.
26 Amerada Hess Shipping Corp., 234 F. Supp. 2d 291, 296 (S.D.N.Y. 2002) (“Limited
27 discovery may help determine whether or not Hovensa had actual knowledge of and
28

1 acquiesced in the terms of the Charter Party and, therefore, perhaps should be bound
2 by its arbitration provision.”).
3 Discovery regarding whether a valid arbitration agreement exists is all the
4 more important in light of recent decisions that call into question the type of
5 “browsewrap” or “modified browsewrap” Terms of Use at issue here. In Wilson v.
6 Huuuge, Inc., for example, the Ninth Circuit affirmed the denial of a motion to
7 compel arbitration, and emphasized that “the existence of mutual assent turns on
8 whether the consumer had reasonable notice of the terms of service agreement.”
9 944 F.3d at 1219. Wilson made clear that district courts must analyze “the content
10 and overall design” of the at-issue website or app to ensure that it affords consumers
11 reasonable notice before granting a motion to compel arbitration. Id. at 1220.
12 Wilson further suggested that Terms of Use like Defendants’ must be scrutinized
13 particularly closely, because they do not affirmatively require consumers to read
14 their Terms and thus run a high risk that consumers will miss them entirely or fail to
15 grasp their import. Id. at 1221 (explaining that “[e]ven where the terms [of use] are
16 accessible via a conspicuous hyperlink in close proximity to a button necessary to
17 the function of the website, courts have declined to enforce such agreements” and
18 noting that the at-issue terms contained “no box for the user to click to assent to the
19 Terms”). Significantly, the Ninth Circuit chose not to publish Lee (on which
20 Defendants rely) and instead published Wilson (which Defendants do not mention in
21 their motion to compel arbitration).
22 Following similar reasoning to Wilson, a court in the Northern District of
23 California recently granted a motion to compel discovery related to whether a valid
24 arbitration agreement existed, and then denied a motion to compel arbitration based
25 on what that discovery showed. In Arena v. Intuit, Inc., the district court found that
26 a website layout strikingly similar to Ticketmaster’s failed to afford consumers
27 reasonable notice of its terms of use, in part due to data showing that very few users
28 ever read those terms of use. 2020 WL 1189849, at *5 (N.D. Cal. Mar. 12, 2020)

1 (“The fact that so few users actually clicked on the hyperlink supports the inference
2 that many of them did not notice it . . . . [B]ecause this evidence suggests users were
3 not on notice of the Terms, it is nonetheless relevant.”). Notably, Intuit recognized
4 that websites can play mental tricks on users, such that users do not realize they are
5 supposedly agreeing to terms of use, even though the terms of use are supposedly
6 presented in a way that the defendant argues provides constructive notice. Id. at *4-
7 5.
8 Decisions like Intuit confirm that the issue of whether consumers assented to
9 Terms of Use like Defendants’ is bound up in factual disputes that cannot be
10 resolved absent at least some discovery. As the Magistrate Judge there put it: “The
11 Court might find it useful to know how many people . . . clicked through to the
12 Terms of Service on Intuit’s website. . . . viewing the website under the clinical
13 conditions of a courtroom is different from the experience of an actual user.” See In
14 re Intuit Free File Litig., Case No. 19-cv-02546-CRB (SK), Dkt. 106 (Dec. 6, 2019)
15 (order granting motion to compel discovery) (attached hereto as Exhibit A).2
16 It also bears emphasis that the requested discovery will impose no significant
17 burden on Defendants. It will consist of a relatively small document or data
18 production (such as data showing what percentage of users click on the Terms of
19 Use and documents regarding the design of and changes to the Terms of Use over
20 time). It will also include interrogatories on these subjects, and depositions of the
21 defense witnesses that provided declarations in support of Defendants’ motion. It
22 will not meaningfully prolong the resolution of this case, because any such
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Plaintiffs recognize the Court granted a motion to compel arbitration in Dickey
26 v. Ticketmaster, but respectfully submit that their arguments here will differ from
27 those in Dickey, including because Plaintiffs’ arguments are based on recent case
law that was not available when Dickey was decided. (ECF No. 28, O’Mara Decl.
28 Ex. B.)

1 discovery can likely be completed within 30-60 days, and Plaintiffs’ opposition brief
2 can be filed within a reasonable time period after that (i.e., two weeks).
3 Relatedly, since the case is still in its infancy and has been proceeding
4 expeditiously, there is no real prejudice to either side or to the Court from any brief
5 delay occasioned by tailored, arbitration-related discovery. In contrast, the
6 prejudice to Plaintiffs of being deprived of their FAA-guaranteed right to
7 meaningfully dispute that they ever agreed to arbitrate their claims against
8 Defendants is substantial. See AT & T Techs., Inc. v. Commcn’s Workers of Am.,
9 475 U.S. 643, 648 (1988) (“a party cannot be required to submit to arbitration any
10 dispute which he has not agreed so to submit”); accord Benaroya v. Willis, 232 Cal.
11 Rptr. 3d 808, 813 (2d Dist. 2018) (“courts [] recognize that the right to pursue
12 claims in a judicial forum is a substantial right and one not lightly to be deemed
13 waived. Because the parties to an arbitration clause surrender this substantial right,
14 the general policy favoring arbitration cannot replace an agreement to arbitrate”)
15 (citations omitted). Respectfully, the Court should err on the side of allowing
16 discovery to ensure this crucial issue is fully explored before it is presented to the
17 Court for resolution.
18 CONCLUSION
19 Plaintiffs respectfully request that the Court enter an order authorizing limited
20 discovery related to Defendants’ motion to compel arbitration, including the issue of
21 whether consumers had reasonable notice of the Terms of Use. As explained above,
22 such limited discovery will include document or data productions related to what
23 percentage of users click on the Terms of Use and regarding the design of and
24 changes to the Terms of Use over time; interrogatories regarding the same subjects;
25 and depositions of the defense witnesses that provided declarations in support of
26 Defendants’ motion to compel arbitration. Plaintiffs further request that the parties
27 be required to submit a joint proposed schedule for the completion of such discovery
28 within seven (7) days of the entry of an order resolving this motion.

1 DATED: June 24, 2020 QUINN EMANUEL URQUHART &

SULLIVAN, LLP
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By /s/ Frederick A. Lorig
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Frederick A. Lorig
5 Kevin Y. Teruya
Adam B. Wolfson
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7 Attorneys for Plaintiffs Olivia Van
8 Iderstine and Mitch Oberstein
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Case 2:20-cv-03888-GW-GJS Document 29-1 Filed 06/24/20 Page 1 of 12 Page ID #:459

1 QUINN EMANUEL URQUHART & SULLIVAN, LLP

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1 DATED: June 24, 2020 QUINN EMANUEL URQUHART &

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