AUSTIN, Texas — The company behind the annual South by Southwest (SXSW) festival has agreed to settle a class-action lawsuit over the event's no-refund policy, according to a report by KVUE's media partners at the Austin American-Statesman.
SXSW was canceled a week before it was scheduled to begin in March 2020 as Mayor Steve Adler declared a public disaster in response to increasing COVID-19 concerns. The festival was one of the first major events canceled due to the pandemic.
After the event was canceled, SXSW LLC – the company behind SXSW – laid off about a third of its 175 year-round employees. In April 2020, the company said it lacked the financial resources to issue refunds to people who bought passes. Instead, it offered a deferral package option that would allow people to use their entry fees to attend SXSW in 2021, 2022 or 2023 and get 50% off the walk-up rate in any of those years.
The Statesman reports that about 80% of purchasers accepted the offer and granted SXSW a release of claims, according to the lawsuit.
The lawsuit, which was filed in April 2020, was brought on behalf of Massachusetts resident Maria Bromley and Colorado resident Kleber Pauta. According to the suit, Bromley spent $1,600 on a platinum badge and $70 for "meals and merchandise" while Pauta spent about $1,020. The lawsuit called the festival's no-refund policy "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."
Under the settlement agreement, SXSW will issue a payment of $30 to any member who deferred their pass to a later year. Anyone who didn't defer will get a refund of 40% of the total amount they paid. Anyone affected by the settlement can opt-out by Dec. 20, the Statesman reports.
The Statesman also reports that the settlement indicates a “fairness hearing” is scheduled for Feb. 18, during which a judge will determine if the settlement should be approved as “fair, reasonable and adequate.”
"The pandemic has been extremely challenging for everyone. Though SXSW has a longtime no refunds policy, we recognize these are unprecedented times. We are glad the court preliminarily approved the settlement and look forward to a final resolution," SXSW said in a written statement to the Statesman.
SXSW 2022 is scheduled for March 11-20. The initial music lineup has already been released.
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