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Law360 (April 15, 2020, 6:39 PM EDT ) The company behind the Lightning in a Bottle Festival was hit with two putative class actions on Tuesday in California federal court after canceling the annual music event due to the COVID-19 pandemic but declining to refund the ticket fees.
The electronic dance music festival had been scheduled for May but the company behind the event, Do Lab Inc., informed would-be attendees in March that the show was canceled and there would be no refunds, although in an email the company promised to make 2020 ticketholders "whole" in the coming years at future festivals.
The email acknowledged the decision "will not be received well" but said Do Lab is "a small family business" and does not have "deep pockets or outside investors." The email also claimed all of the money brought in for the festival was already paid out on nonrefundable deposits, building materials and staff.
One lawsuit filed by lead plaintiff Yesenia Jimenez claims Do Lab has collected between $8 million and $10 million in ticket sales for the 2020 event and "unjustly enriched itself by retaining the ticket fees of thousands of consumers while simultaneously canceling its festival in its entirety."
The suit filed by lead plaintiff Tess Nesis names not just Do Lab but also the company's co-owners Jason "Dede" Flemming, Jesse Flemming and Josh Flemming as defendants.
According to Nesis, the Flemmings "have absconded with millions of dollars from passes/ticket sales compromising of monies belonging to plaintiff and the class and used that money for purposes other than LIB. LIB was not to take part until end of May 2020. Yet, the Flemmings would have the class believe that they sold 10,000-20,000 tickets and somehow expended all of that money by March 2020, nearly three months before LIB was to take place."
According to Jimenez, tickets for the five-day festival started at $319 and could go as high as $999. Customers could also purchase car camping passes for $130 or RV camping passes for $355 to $1,200 and "boutique" camping set-ups or packages from $1,500 to $3,300.
Nesis said "LIB has grown tremendously in popularity and scope — and now greed."
"What started as an 800-person event in 2004 has developed into a 25,000-plus person event and continues to grow," Nesis said.
She added that she believes the Flemmings "are laying the groundwork to dissolve and/or reinvent DLI as a separate entity so as to avoid all obligations of DLI and abscond with monies belonging to the class."
Nesis claims the refund policy included with the 2020 tickets contains unconscionable and illusory terms and conditions, as it says no refunds will be granted "for any reason." Nesis said that under California law, a contract is unenforceable when one party has the "unfettered or arbitrary right to modify or terminate the agreement or assumes no obligations thereunder."
Both lawsuits seek to represent a putative class of ticket purchasers for the 2020 festival and are seeking unspecified damages.
The Nesis lawsuit includes claims for violations of the California Business and Professional Code, the Consumer Legal Remedies Act and rescission under California Civil Code Section 1689. The Jimenez suit has 10 counts including violation of California's False Advertising Law, breach of express warranty and fraud.
"Do Lab Inc. and its owners' refusal to refund their customers is not only wrong, it's fraudulent," Michael Geragos of the Geragos Law Group, who represents Nesis, told Law360 in an email Wednesday. "Greed has eclipsed the core principles they purport the festival to espouse, including '[Taking] responsibility for your actions.'"
Do Lab and counsel for Jimenez did not immediately respond to requests for comment Wednesday.
Jimenez is represented by Scott A. Bursor, Yeremey Krivoshey and Brittany S. Scott of Bursor & Fisher PA.
Nesis is represented by Matthew J. Geragos and Michael Geragos of the Geragos Law Group and Reza Sina of the Sina Law Group.
Counsel for Do Lab and the other defendants could not immediately be determined.
The cases are Yesenia Jimenez et al. v. Do Lab Inc., case number 2:20-cv-03462, and Tessa Nesis et al. v. Do Lab Inc. et al., case number 2:20-cv-03452, both in the U.S. District Court for the Central District of California.
--Editing by Janice Carter Brown.
For a reprint of this article, please contact reprints@law360.com.
