Thursday, August 25, 2011

Online Ticket Buyers Get Another Try at Class Certification in “Rewards” Cases

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

Class certification was improperly denied in cases brought by online ticket purchasers asserting California consumer protection law claims that Ticketmaster participated in a deceptive Internet scheme to lull and induce ticket purchasers into unwittingly signing up for a fee-based “rewards” program, the U.S. Court of Appeals in San Francisco has ruled.

The operator of the Entertainment Rewards program, Entertainment Publications LLC, allegedly charged amounts to the ticket purchasers’ credit cards or directly deducted amounts from their bank accounts, all without specific authorization. Members of the program can download printable coupons for discounts at retail establishments.

Unfair Competition Law

Class certification was improperly denied on the theory that individualized proof of reliance and causation would be required to establish California Unfair Competition Law (UCL) claims, the court held. Relief under the UCL was available without individualized proof of deception, reliance, and injury, according to the court.

Each member of the proposed class would have suffered a concrete and particularized injury by being relieved of money in the alleged transactions, and the alleged loss was traceable to the actions of the defendants, the court determined. The denial of class certification as to the UCL claims was reversed and remanded. A ruling that two individuals who were not deceived into joining the rewards program could not act as class representatives was affirmed.

Consumers Legal Remedies Act

California Consumers Legal Remedies Act (CLRA) claims were improperly dismissed because the statutory 30-day notice provided by ticket purchasers setting forth the nature of the dispute and intent to seek damages did not expressly state that class action relief would be sought. The statute did not state that the threat of class action must be set forth, according to the court.

Dismissal of the CLRA claims was affirmed in two of the actions on appeal in which the proposed class of ticket purchasers was so broadly defined that material misrepresentations to the whole class could not be shown.

The August 22 opinion in Stearns v. Ticketmaster Corp. appears at CCH Advertising Law Guide ¶64,386.

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