Nearly two months after being forced to cancel SXSW 2020 due to the coronavirus pandemic, the Austin-based music, film, and technology conference is now being sued for enforcing its strict no refund policy.
South by Southwest’s has long held a policy that states, “Any and all payments made to SXSW are not refundable for any reason, including, without limitation, failure to use Credentials due to illness, acts of God, travel-related problems, acts of terrorism, loss of employment and/or duplicate purchases.” Given the unprecedented nation of the health crisis necessitating the cancellation, SXSW instead offered ticket holders an opportunity to defer 150% of their passes costs to SXSW in 2021, 2022, or 2023.
The newly filed class action lawsuit claims such a policy is “an unenforceable, illusory, unilateral option contract that allows SXSW to sell credentials, cancel the festival for any or no reason whatsoever, and retain all customer payments while leaving (would-be attendees) without a remedy.” The plaintiffs in the suit, Maria Bromley and Pauta Kleber, are suing for breach of contract and unjust enrichment “on behalf of themselves and all other persons” who purchased passes of any kind for SXSW 2020, according to The Austin-American Statesmen. For their part, Bromley and Kleber are seeking to recover over $1,000 each for money they spent “on badges and other expenses.”
“SXSW has, in effect, shifted the burden of the COVID-19 pandemic onto festivalgoers…” reads the complaint, “individuals who in these desperate times may sorely need the money they paid to SXSW for a festival that never occurred.”
In a statement provided to Billboard, a SXSW spokesperson said the company does not have the financials means to reimburse ticket holders. “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,” the statement read. “These expenditures, and the loss of expected revenue, have resulted in a situation where we do not have the money to issue refunds.”
There is evidence to back up SXSW’s claim. In March, SXSW laid off a third of its 175 year-round employees, a move a “high-ranking official” said was “the only way to stop the bleeding.”
“The pandemic and the cancellation have caused a tremendous loss to our business, our staff, the city, and its citizens,” the SXSW spokesperson continued. “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.”
SXSW is the latest major music industry player to be sued over refunds tied to the coronavirus pandemic. Live Nation was hit with a class action suit after grounding all tours and subsequently quietly changing its refund policy. The entertainment conglomerate has since issued a revised Ticket Relief Plan that includes a 30 day window to request a full refund for rescheduled or cancelled events. For indefinitely postponed events, a similar 30 day window will open 60 days after the postponement is announced. Alternatively, ticket holders can take a 150% credit in lieu of cash back, with Live Nation donating tickets to healthcare workers for each ticket holder who chooses the option.