November 12, 2021
Warning, be careful who you sue in the AstroWorld Festival!
The “ticket” to a concert may be viewed as a contract. When you purchase a “ticket” from the
vendor, who is responsible for holding the concert, a contract is created thus the vendor has to
perform under the “contract” which is to hold the event, the artist must be present as represented
in the actual ticket and provide all other necessary requirements to hold the event.
The “ticket”, a legal contract contains an arbitration clause. Despite the strong presumption in
favor of upholding arbitration clauses, parties continue to contest the validity of such clauses.
The 13th Court of Appeals in Roland’s Roofing Co. Inc. v. Nationwide Mutual Insurance
Company, LLC held that the arbitration clause at issue was valid and legally served to compel
the parties to arbitration.
Businesses often utilize arbitration clauses to avoid the alleged uncertainties of a trial. Texas
courts strongly favor arbitration and have consistently enforced arbitration clauses in contracts.
Although there are many vanilla arbitration clauses, which are boilerplate in nature, including
one in a contract will likely waive one’s right to a jury trial.
There is a legal presumption in favor of compelling and enforcing arbitration clauses in Texas.
The general rule for enforcing arbitration clauses is as follows “a court should not deny any
arbitration clause that are not susceptible to an interpretation that would cover the dispute at
issue.” Prudential Sec. Inc. v. Marshall, 909 S.W. 2d 896, 899 (Tex. 1995).
The Texas Supreme Court has decided two major cases within the past year enforcing arbitration
clauses in contracts. The Texas Supreme Court has struck down arguments against the
enforcement of arbitration clauses in contracts such as:
1. “I did not remember sighing or agreeing to an arbitration clause”,
2. “I was not told, nor informed of the consequences of agreeing to an arbitration
clause”.
Consequently, the effect of the Arbitration Clause, which “Live Nation” as a defendant, relies
upon, provides “Live Nation” the ability to argue procedurally, the validity and enforceability of
a boiler plate arbitration clause. Subsequently, within days of being properly served with a
notice of a “suit” against itself, “Live Nation” will file a motion to abate the lawsuit and seek
enforcement of an arbitration clause. The motion to abate would stop the proceeding specifically
as to “Live Nation” until the court decides the issue.
In conclusion, choose your defendants wisely and do not place (Plaintiffs) clients in a position to
be frustrated or shuffled into an arbitration proceeding which may have little value to the client.
Lastly, see below some of the disadvantages in a plaintiff (Client) undergoing arbitration
proceedings versus the state court judicial proceedings.
DISADVANTAGES OF ARBITRATION TO THE PLAINTIFF (CLIENT)
Rules of evidence do not necessarily need to be followed, meaning an Arbitrator can consider
evidence a jury or judge would not consider at trial.
If certain information from a witness is presented by documents, then there may not be an
opportunity to cross examine that witness.
Discovery and ability to obtain information may also be more limited.
Waive the right to a trial by jury.
Recent Texas Supreme Courts Opinions on Arbitration Clauses
1. In Re Copart, Inc. Copart of Houston, Inc., (opinion delivered March 12, 2021)
2. Bonsmara Natural l Beef Co. v. Hart of Texas Feeders L.L.C. (decided June 26,
2020)