Kern v. Stubhub, Inc.
- Analisa Torres
- 1:24-cv-00871
- U.S. District Court · Southern District of New York
- 8
In Kern v. StubHub, Judge Torres granted StubHub’s motion to compel arbitration and stayed the action.
The four named plaintiffs and the proposed class members are required to pursue the claims covered by the User Agreement in arbitration rather than in the stayed federal action; StubHub must participate in that arbitration.
What happened
In Kern v. StubHub, four ticket purchasers brought a proposed class action claiming that StubHub failed to clearly disclose ticket fees and was unjustly enriched. They sued under New York’s Arts and Cultural Affairs Law and for unjust enrichment.
StubHub argued that its user agreement required arbitration. The court found that the purchasers saw notice above the “Buy Now” button, clicked that button, and thereby agreed to the user agreement’s arbitration clause. The court also found that the clause covered their claims.
Judge Analisa Torres granted StubHub’s motion to compel arbitration. She stayed the action while arbitration proceeds and ordered the parties to file a status update within one week after arbitration ends.
The detailed version
- Kern v. Stubhub, Inc. · No. 1:24-cv-00871
- Analisa Torres
- Dec. 17, 2024
Background
Lowell Kern, Joseph Ball, Michelle Shapiro, and Steve Hermida filed a proposed class action against StubHub, Inc. They alleged that StubHub violated New York Arts and Cultural Affairs Law § 25.07(4) by initially displaying a ticket price without the required fees and revealing additional fees only after users clicked through multiple pages. They also alleged that StubHub was unjustly enriched.
Each plaintiff purchased a ticket through StubHub’s website or mobile application and did not use the available process to opt out of arbitration. StubHub moved under the Federal Arbitration Act to compel arbitration based on its Global User Agreement. That agreement stated that disputes relating to StubHub’s services or tickets purchased through the platform would be resolved through final and binding arbitration. It also stated that users could bring claims only individually, not as class members.
Court’s reasoning
The court applied California law to determine whether the parties formed an arbitration agreement because the User Agreement contained a choice-of-law provision, and the plaintiffs did not dispute that California law governed that issue. The court characterized StubHub’s arrangement as a “sign-in wrap” agreement: the user agreed to the terms by clicking a button needed to complete the transaction.
The court held that the website and application gave reasonably noticeable warning of the terms. The notice appeared directly above the “Buy Now” button, used dark gray text against a white background, and displayed the “terms and conditions” hyperlink in bright blue. The User Agreement itself prominently warned that one clause required arbitration unless the user opted out.
The court also held that the plaintiffs unambiguously agreed to the terms by clicking “Buy Now.” The notice expressly said that clicking the button meant accepting StubHub’s terms and conditions, identifying both the action and its legal significance. The court therefore found a valid arbitration agreement.
The court further held that the plaintiffs’ claims fell within the agreement’s broad scope. The agreement covered disputes arising from use of StubHub’s services and tickets bought through StubHub, and the plaintiffs’ fee-disclosure and unjust-enrichment claims arose from that use. The plaintiffs did not dispute that their claims were within the agreement’s scope.
Disposition
The court granted StubHub’s motion to compel arbitration. It stayed the action pending arbitration and directed the parties to file a status update within one week after arbitration concluded. The Clerk of Court was directed to terminate the motion at ECF No. 22.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.