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SDNY Judge Refuses To Transfer DOJ Case Against Concert Promoter, Finding Attempt To Unwind A Merger Cleared By Consent Decree Does Not Necessarily “Modify” The Decree
10/16/2024On October 3, 2024, United States District Judge Arun Subramanian refused to transfer the DOJ’s monopolization case against two companies in the live entertainment industry (“Defendants”) from the Southern District of New York to the District of Columbia. United States, et al. v. Live Nation Entertainment, Inc., and Ticketmaster L.L.C., No. 24-CV-3937 (AS) (S.D.N.Y. Oct. 3, 2024). According to the decision, the case, which alleges violations of the state and federal antitrust laws, is insufficiently related to the consent decree governing Defendants’ 2010 merger to fall within its retention-of-jurisdiction provision. In his ruling, Judge Subramanian drew a distinction between the consent decree, which “resolved a single claim arising under Section 7 of the Clayton Act,” and DOJ’s present allegations that defendants “have violated separate legal duties” under the Sherman Act and analogous state laws.
The merger between Defendants was initially cleared through a 2010 consent decree that forbid the combined company from retaliating against other concert venues for using a different ticket provider. In 2019, the DOJ accused one of the defendants of violating that order and extended the consent decree’s term through 2025. The consent decree explicitly designated the U.S. District Court for the District of Columbia as the proper forum for construing, modifying, or enforcing the settlement. While the consent decree—in exchange for a set of commitments—enabled the companies to consummate the transaction, Judge Subramanian’s recent decision makes clear that the settlement did nothing to insulate the merged entity from “future antitrust challenges, including this case.”
Presently, the DOJ, along with 40 state Attorneys General, allege that Defendants monopolized the live entertainment industry by exercising control over nearly every aspect of the live entertainment supply chain, including ticketing, concert promotion, and entertainment venue operations. According to the Complaint, Defendants have exploited long-term, exclusive contracts and threats of retaliation against rival ticketing services and concert venues to unlawfully retain market position. To remedy these alleged harms to competition, the DOJ seeks to unwind the merger and impose additional penalties. Several States’ Attorneys General have joined the suit to recover damages on behalf of consumers who allegedly overpaid for concert tickets as a consequence of Defendants’ conduct.
One of the defendants moved to transfer the case from the Southern District of New York to the District of Columbia on the basis that the relief sought by the DOJ and other plaintiffs is, in effect, an attempt to modify the settlement and unwind the 2010 transaction. Defendant characterized the SDNY lawsuit as a “naked attempt” to undermine or “side-step” the consent decree. In its motion, defendant insisted that the DC court, which allowed the merger to proceed in the first place and has the requisite familiarity with the transaction, is the proper forum to evaluate both the consent decree and the new allegations of anticompetitive conduct.
Judge Subramanian disagreed. Adopting a far narrower view of the scope of the consent decree and the retention-of-jurisdiction provision therein, the Court held that “the decree doesn't reach beyond the specific pre-merger challenge that it helped resolve.” Rather, “Defendants remain liable for violating the laws at issue here, and plaintiffs don’t have to modify the decree to seek enforcement of those laws.” In the Court’s view, while the 2010 settlement resolved issues in existence before the merger, it did not “green-light defendants’ merger for all time.”
