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Egan v. Live Nation Worldwide, Inc.

United States District Court, W.D. Pennsylvania

July 24, 2018

JOHN EGAN, Plaintiff,
v.
LIVE NATION WORLDWIDE, INC., Defendant.

          MEMORANDUM OPINION

          MARK R. HORNAK, UNITED STATES DISTRICT JUDGE

         On March 12, 2018, this Court denied Defendant Live Nation Worldwide's Motion to Compel Arbitration, ECF No. 35, on the basis that the Defendant had not demonstrated the existence of a valid agreement to arbitrate. (Op. of Mar. 3, 2018, ECF No. 46, at 1 (attached as Exhibit A).) Defendant appealed that decision to the Court of Appeals on April 9, 2018, and filed a Motion to Stay proceedings in this Court pending that appeal, ECF No. 57, on April 30, 2018. Plaintiff opposes the stay, asserting that Defendant's appeal is frivolous. Upon full consideration of the Motion and briefings of the parties, for the following reasons, Defendant's Motion to Stay is denied without prejudice to the Defendant seeking a stay from the Court of Appeals.

         I. Legal Standard

         An appeal of a denial of a motion to compel arbitration automatically deprives the District Court of jurisdiction to proceed unless the appeal is deemed frivolous or forfeited. Kim v. Dongbu Tour & Travel, Inc., 529 Fed.Appx. 229, 223 (3d Cir. 2013) (citing Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207, 215 n.6 (3d Cir. 2007)). An appeal is considered frivolous '"when it is utterly without merit' or without 'colorable arguments' raised in support." Hilmon Co. (V.I.) Inc. v. Hyatt Int'l et al, 899 F.2d 250, 251 (3d Cir. 1990) (quoting Sun Ship, Inc. v. Matson Navigation Co., 785 F.2d 59, 64 (3d Cir. 1986); In re Hall's Motor Transit Co., 889 F.2d 520, 523 (3d Cir. 1989) (internal citations omitted)).

         II. Analysis

         Defendant asserts that it has five viable arguments to assert on appeal. First, with respect to its claim that Plaintiff agreed to arbitrate in 2012, Defendant asserts that:

(1) Plaintiff waived all evidentiary objections to the 2012 [Terms of Use ("TOU")] by failing to object;
(2) the Court was required to give Defendant an opportunity to supplement the record to cure any perceived deficiencies in light of Plaintiff s failure to object;
(3) the declaration and deposition testimony of Mr. Han adequately authenticated the 2012 TOU; and
(4) Defendant's evidence regarding the design of its Website was sufficient to prove a valid agreement to arbitrate.

(Def.'s Br. in Supp. of Mot. to Stay Pending Appeal, ECF No. 58, at 6-7.) Lastly, as to Defendant's argument that Plaintiff agreed to arbitrate in 2017, Defendant claims that:

(5) the evidence submitted shows that Plaintiff proceeded past the landing page of the Website when he entered the presale code and clicked on the Website to attempt to purchase tickets.

(Id. at 7.)

         The Court will address each asserted appeal issue. Because Issues 3 through 5 each deal with the adequacy of Defendant's evidence to authenticate documents and/or prove a valid agreement to arbitrate (in both 2012 and 2017) and fail for similar reasons, the Court will address those issues together.

         A. Issue 1: Waiver of 2012 TOU Objections

         Defendant asserts that the Court was required to accept its evidence as authentic- specifically, the 2012 Terms of Use ("2012 TOU")-because (it believes) the Plaintiff did not properly object on authenticity grounds. Plaintiff asserts that he did properly object, since his concerns with Defendant's evidence of the website in 2012-including the 2012 TOU-and Mr. Han's inability to authenticate it based on personal knowledge (despite the fact that his declaration purported to be based on personal knowledge) are what brought the issue to the Court's attention. (Pis.' Resp. in Opp'n to Def.'s Mot. to Stay, ECF No. 60, at 5-6.)

         As an initial matter, the Court notes that the competency of Defendant's evidence was clearly a matter before the Court, and it was a matter raised by the Plaintiff, both in its briefs and at oral argument. (See, e.g., Pis.' Resp. in Opp'n to Def.'s Mot. to Compel Arbitration, ECF No 37, at 7-8, 8 n.5; Tr. of Oral Arg. Proceedings of Jan. 30, 2018, ECF No. 61, 14:9-16:15.) Secondly, what objections (and the specific grounds of those objections) may or may not have been preserved by a party for appeal is a question for the Court of Appeals-not for this Court in ruling on the Motion to Compel Arbitration. When the issue was before this Court, it identified it, addressed it, and ruled on it. A district court judge's discretion is not bound by specific evidentiary objections raised by the parties, Fed.R.Evid. 103(c), 901(a), and a district court may raise authenticity issues sua sponte. See, e.g., Maddox v. Patterson, 905 F.2d 1178, 1180 (8th Cir. 1990) ("[I]t is clearly within the trial court's discretion to exclude evidence sua sponte."). Whether the Plaintiff objected or not, the Court actually addressed and considered the authenticity issue as it considered whether the Defendant was entitled to the relief it sought. Accordingly, the Defendant's argument on this point is frivolous.

         B. Issue 2: Required Opportunity to Supplement the Record

         Next, Defendant asserts that even if Plaintiff did not waive his objections to the 2012 TOU, this Court was required to allow Defendant to supplement the record to authenticate the 2012 TOU prior to issuing its decision.

         The Court concludes that this appeal issue is similarly frivolous. As an initial matter, the Court notes that this was Defendant's Motion to Compel Arbitration, which the Court denied after oral argument based on Defendant's lack of evidence. In that regard, Defendant's citations to cases involving a court granting summary judgment without oral argument and without giving a party notice of the authenticity issues of its evidence opposing summary judgment are therefore clearly distinguishable. (Def.'s Br. in Supp. of Mot. to Stay Pending Appeal, ECF No. 58, at 11 (citing, e.g., Rodriguez v. Fill. Green Realty, Inc., 788 F.3d 31, 46-47 (2d Cir. 2015).)

         Secondly, and importantly, Defendant was well on notice that its evidence faced substantiation issues. Plaintiff raised the issue in its briefing, and a substantial portion of the oral argument in this matter was devoted to the question of how Mr. Han, who did not begin working for Defendant until 2013, could speak with personal knowledge in his declaration and deposition as to the contents of the website in 2012-which included the 2012 TOU. (Tr. of Oral Arg. Proceedings of Jan. 30, 2018, ECF No. 61, 14:9-16:15, 19:25-20:5, 42:4-7, 50:6-51:19.)[1] The majority of the rest of the argument was devoted to discussing whether there was a "hole in the factual record" as to the rest of Defendant's evidence, and the Court identifying exactly what it might conclude that hole was. (See, e.g., Id. at 40:14-41:18.)

         Despite this extensive discussion (including the Court's observations on this issue during oral argument) about the inadequacies of Defendant's evidence (both in regards to the 2012 TOU and the design of the website in both 2012 and 2017), Defendant never asked to nor offered to supplement the record, either in response to Plaintiffs arguments in his brief or to the Court's extensive questioning at oral argument. Further, in the month and a half between oral argument and the date the Court issued its decision-January 30, 2018, to March 12, 2018-Defendant made no effort to supplement the record regarding any of the evidentiary deficiencies discussed at oral argument, and it never asked to do so. Defendant did not need an engraved invitation to provide further support of its own Motion to Compel Arbitration, and it is not the Court's responsibility to affirmatively offer this opportunity to a litigant who makes no effort to request it-particularly after the Court identified the potential evidentiary issues on the record at oral argument. Finally, although Defendant includes a single line in its brief in support of this Motion to Stay requesting permission to supplement the record now, it does not attempt to explain what it would supplement the record with. (Def.'s Br. in Supp. of Mot. to Stay Pending Appeal, ECF No. 58, at 12.) At any rate, this request is irrelevant to the Court in deciding the present Motion to Stay.

         Finally, the Court's Order did not deny the Motion to Compel Arbitration with prejudice. Defendant could have supplemented the record and reasserted that Motion with competent evidence at any time, but it chose not to. Instead, Defendant decided to appeal, in part on the basis that it did not have a chance to supplement the record-something it never tried to do prior to this Motion to Stay. This appeal issue is therefore frivolous and wholly of the Defendant's own making.

         C. Issues 3, 4, and 5: The Adequacy of Defendant's Evidence

         The three remaining issues in Defendant's appeal each assert that Defendant's evidence was competent to demonstrate an agreement to arbitrate. Specifically, Defendant claims that the declaration and deposition testimony of Mr. Han adequately authenticated the 2012 TOU; that Defendant's evidence regarding the design of its Website was sufficient to prove a valid agreement to arbitrate in 2012; and that the evidence submitted pertaining to Plaintiffs attempt to purchase tickets in 2017 shows that Plaintiff proceeded past the landing page of the Website when he entered the presale code and clicked on the Website to attempt to purchase tickets. (Def.'s Br. in Supp. of Mot. to Stay Pending Appeal, ECF No. 58, at 6-7.)

         Defendant's appeal is frivolous as to these issues because it does nothing to rebut the evidentiary gaps, holes, and insufficiencies that the Court laid out in detail in its Opinion as the basis for its denial of Defendant's Motion to Compel-and, indeed, it cannot. (Op. of March 12, 2018, ECF No. 46, at 5-7, 8-12.) This was Defendant's Motion to Compel Arbitration, and Defendant could have supported it however it wanted. Defendant decided to support its Motion with a declaration by a declarant with no real personal knowledge[2] (and no temporal basis to have such knowledge), and once this issue was pointed out to it, Defendant made no effort to support its evidence any other way, or explain how this declarant could have obtained personal knowledge. (Id. at 6-7.)

         Further, Defendant's argument that the Court should have held a trial on the issue of agreement to arbitrate before denying the Motion is frivolous because the Court did not deny the Motion because it resolved a disputed fact against the Defendant; the Defendant's Motion (and its evidence) simply didn't show that there was an agreement to arbitrate. At this stage, there was nothing to schedule a trial on. As this Court's Opinion denying the Motion to Compel Arbitration laid out, even considering the Defendant's proffered evidence, that evidence did not prove ...


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