Legal and Management

SXSW Hit With Class Action Lawsuit Over Ticket Refunds

Plaintiffs claim the Austin festival "shifted the burden of the COVID-19 pandemic onto" ticket buyers by not offering refunds.

South by Southwest is the subject of a class action lawsuit for not offering refunds to ticket buyers after its 2020 edition was canceled due to the spread of coronavirus. The class action suit is claiming breach of contract and unjust enrichment.

The suit was filed in U.S. District Court for the Western District of Texas Austin Division on April 24 by two plaintiffs, Maria Bromley and Pauta Kleber, who claim to have spent over $1,000 each on attending the event that was originally scheduled for March 12-20 in Austin. On March 6, organizers announced they were forced to cancel the annual festival due to a city order that prohibited large gatherings in order to prevent the spread of COVID-19.

Following the cancellation, SXSW informed ticket and pass holders that they would not be receiving refunds. Instead, the independent festival offered pass holders free registration -- equivalent to the amount they spent for the 2020 festival -- that would be valid for SXSW in 2021, 2022 or 2023. They were also offered a 50% discount based on the amount they spent in 2020 for another one of those three years.

According to the lawsuit, both plaintiffs were informed that the offer expires on April 30, 2020. The complaint notes that these offers were put forth by the festival on March 12, which additionally stated that it "cannot be certain that future festivals will occur."

"SXSW has, in effect, shifted the burden of the COVID-19 pandemic onto festivalgoers ... individuals who in these desperate times may sorely need the money they paid to SXSW for a festival that never occurred," the complaint reads.

“When Mayor Steve Adler issued an order on March 6, 2020, prohibiting SXSW from holding the 2020 event due to the COVID-19 pandemic, we understood and agreed with his tough call. The pandemic and the cancellation have caused a tremendous loss to our business, our staff, the City, and its citizens. We are still picking up the pieces after spending a year to program what would have been a remarkable event that required significant time, energy, and resources to produce," a SXSW spokesperson said in a statement sent to Billboard.

"Due to the unique nature of SXSW’s business, where we are reliant on one annual event, we incurred extensive amounts of non-recoupable costs well in advance of March. These expenditures, and the loss of expected revenue, have resulted in a situation where we do not have the money to issue refunds," the statement continues. "SXSW, like many small businesses across the country, is in a dire financial situation requiring that we rely on our contracts, which have a clearly stated no refunds policy. Though we wish we were able to do more, we are doing our best to reconcile the situation and offered a deferral package option to purchasers of 2020 registrations.”

The SXSW class action suit follows similar lawsuits that have been popping up throughout the music industry. California festival Lightning in a Bottle was hit with two class action lawsuits earlier this month for its lack of refunds, while Live Nation and StubHub have also faced class action suits over their refund policies.

The SXSW ticket buyers are represented by Randy Howry, Sean Breen and James Hatchitt of Howry Breen & Herman LLP; Joseph G. Sauder, Lori G. Kier and Joseph B. Kenney of Sauder Schelkopf LLC; and Daniel O. Herrera, Kaitlin Naughton and Bryan L. Clobes of Cafferty Clobes Meriwether & Sprengel LLP.