Many companies and event organizers are under hot water for their COVID-19 refund policy. The mayor of Austin called off SXSW in March due to the spread of the pandemic. Mria Bromley and Kleber Pauta filed a class-action lawsuit against SXSW for their no refund policy. Bromley spent nearly $1,700 for her 2020 SXSW pass and meal plan, while Pauta paid over $1,000 in total. Therefore, they’re suing for breach of contract and unjust enrichment to “recover monies paid for a festival that never occurred.”
Attendees must agree with SXSW’s Participation and Credentials Terms and Conditions in order to purchase tickets and credentials. This is includes a “Refund and Revocation Policy” which allows the organizers, at their sole discretion, to “cancel, revoke, or refuse” credentials, purchases, and/or hotel reservations made through SXSW. The policy also states that SXSW “does not issue refunds under any circumstances” and that “any and all payments made to SXSW are not refundable for any reason.”
However, the future of SXSW is unknown as they’ve laid off roughly one-third of their staff following the cancellation. SXSW’s co-founder indicated that the event insurance didn’t cover pandemic and health emergencies. As a result, the company found themselves at such a huge loss.
A spokesperson for SXSW issued a statement for the lawsuit, “…These expenditures, and the loss of expected revenue, have resulted in a situation where we do not have the money to issue refunds. 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.”
Plaintiffs for the lawsuit argue that the refund policy is “unlawful, unconscionable, and unenforceable.”
The lawyer, Randy Howry, questioned the legality of the decision to cancel the event without offering a refund. He states, “Reserving the right to change or cancel SXSW without providing a refund violates Texas law and is especially harmful during this very difficult time when so many people are suffering physically and financially.”
SXSW ins’t the first to be sued by ticket holders for their no refund policy. Ticketmaster, Lightning in a Bottle, Live Nation, and more also face the same lawsuit with their no refund policies. The outcome of these lawsuits will determine the future of refund policies as well as the event organizer’s financial status.
This lawsuit looks to cover every U.S. individual who bought credentials for SXSW 2020 in Austin, Texas. You can find the full lawsuit and details here.