SXSW Sued Over Festival’s Refusal to Issue Refunds

2020 fest was canceled in March

The organizers of the South by Southwest (SXSW) festival were hit with a class-action lawsuit in Texas federal court by fans alleging they were not issued refunds for their ticket purchase after the event was canceled because of the coronavirus pandemic.

The lawsuit was filed on April 24 by Maria Bromley and Kleber Pauta on behalf of the perhaps “hundreds of thousands of people” who might also have been affected. The annual festival was expected to take place March 13 to March 20 in Austin, Texas.

Bromley says on Feb. 3, 2020, she purchased a platinum badge for the event for $1,670. When she found out the event was canceled, she says she contacted SXSW by phone to request a cash refund but was told the event would not provide one. After sending an email in March that went unanswered, Bromley says she received an email on April 1, “offering to defer her badge to use for the 2021, 2022 or 2023 Festival.”

Pauta detailed a similar situation, though he purchased a badge for $1,020.

The lawsuit says that the festival’s no refund policy is “unlawful, unconscionable and unenforceable.” They are suing for breach of contract and unjust enrichment “in order to recover monies paid for a festival that never occurred.”

A spokesperson for SXSW gave TheWrap the following statement:

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.

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.

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.

In addition to the option to defer their badge to a different year, ticketholders were also given the opportunity to purchase a pass to a future festival at a 50% discount.

Pamela Chelin contributed to this report.

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