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South by Southwest sued over no-refund policy after 2020 festival canceled

In a statement on Saturday, SXSW LLC said it does not have the financial resources to issue refunds.

AUSTIN, Texas — Two people who claim to have spent more than $1,000 to attend South by Southwest 2020 are suing the festival over its no-refund policy after the event was canceled amid the coronavirus pandemic.

A lawsuit filed in the U.S. District Court in Travis County on Friday is seeking class-action status on behalf of “hundreds of thousands” of others in a similar situation.

“[The plaintiffs] on behalf of themselves and all other persons who purchased wristbands, tickets, passes and badges to the 2020 South by Southwest festival, bring this action for breach of contract and unjust enrichment in order to recover (money) paid for a festival that never occurred,” the suit says.

In a statement on Saturday, SXSW LLC said it does not have the financial resources to issue refunds.

“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,” the company said. “SXSW, like many small businesses across the country, is in a dire financial situation requiring that we rely on our contracts (agreed to by would-be attendees at the time of purchase), 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.”

The event was canceled just days before it was set to begin last month, after Mayor Steve Adler declared a local disaster due to COVID-19.

Platinum badges for the conference and festival were priced at $1,600 this year. SXSW’s official policy states that refunds are not issued to festival-goers “under any circumstances.” Those who had badges and passes for the 2020 event have been offered to defer their credentials to any of the next three years, with 50% off the walk-up rate.

Plaintiff Maria Bromley of Massachusetts spent $1,600 on a platinum badge and $70 for meals and merchandise, while plaintiff Kleber Pauta of Colorado spent around $1,020. The lawsuit said the two do not “necessarily” plan to attend future festivals, “and even SXSW has acknowledged that future festivals may not occur.”

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The lawsuit calls 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.”

The company lacked insurance covering a cancellation due to a pandemic or disease, and has already laid off around a third of its year-round employees.

“The pandemic and the cancellation have caused a tremendous loss to our business, our staff, the city and its citizens,” the company said in its statement. “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.”

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