A judge has shut down efforts to bring a class action lawsuit against StubHub over the relationship between the company and a ticket-reselling fund operated by its CEO.
A Monday (Sept. 21) legal opinion, obtained by Billboard, boots the claims against StubHub and CEO Eric Baker out of a public courtroom and into private arbitration. Judge Jed S. Rakoff says the StubHub terms of service include a crystal-clear clause requiring customers to arbitrate all claims on an individual basis — that is, they cannot band together for a nationwide class action case.
Related
StubHub Under Scrutiny From House Dems Over CEO’s ‘Alleged Collusion’ With Ticket Broker
Billboard to Add Smart Media Albums As Chart-Eligible Sales Formats
Duane 'Keffe D' Davis Gives First Interview After Tupac Shakur Murder Conviction
The lawsuit was filed in July by Louis Sanquini, who used StubHub to buy tickets to a KISS show at Madison Square Garden. Sanquini alleged he wouldn’t have given his business to StubHub if he’d known that Baker also operated Andro Capital, a ticket broker fund that has sold secondary market tickets on StubHub since 2008 and generated more than $5 million in profits on the platform since 2022.
StubHub publicly disclosed Baker’s ownership of Andro Capital in regulatory filings ahead of its $758 million initial public offering last year. The company says Baker’s fund is “one of many vendors” used by the platform: “This relationship with Andro Capital makes up only a small fraction of StubHub’s total revenue,” a StubHub spokesperson told Billboard in July.
Monday’s opinion does not make any findings about the substance of Sanquini’s allegations against StubHub. Rather, Judge Rakoff says his courtroom is simply not the correct forum to litigate the matter.
“Sanquini’s claims that he (and putative class members) purchased tickets he would not have purchased, or would have (nonetheless) purchased at a reduced price, had he known about certain relationships between StubHub, Baker, and a seller on StubHub’s platform and the seller’s affiliate, all arise out of Sanquini’s use of StubHub’s services,” writes the judge. “The claims thus fall within the scope of the arbitration agreement and must be arbitrated.”
Sanquini’s lawyer, Keven Steinberg, says he intends to pursue the allegations in arbitration — and that StubHub will still have to deal with large swaths of customer claims even though a class action is off the table.
“StubHub spent years making sure buyers couldn’t band together in court,” Steinberg tells Billboard. “The court agreed. But that just moves the fight to arbitration, one claim at a time, by the thousands. Be careful what you ask for.”
A rep for StubHub declined to comment on the ruling Tuesday (Sept. 22).
Separately from Sanquini’s claims, StubHub’s ties to Andro Capital are also under investigation by Democrats in the U.S. House of Representatives. In a letter first reported by Billboard this summer, House Oversight Committee ranking member Rep. Robert Garcia (D-Calif.) demanded that StubHub provide information and records in order to determine whether the company engaged in “market manipulation and self-dealing.”
As the minority party in Congress, Democrats do not have the power to enforce this demand against StubHub. That could change, however, if they flip the House in the upcoming midterm elections.