Eventbrite, Inc. v. M.R.G. Concerts Ltd.

• Court: Court of Appeals for the Ninth Circuit
• Decided: December 26, 2023
• Docket: 22-16848
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS DEC 26 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

EVENTBRITE, INC., No. 22-16848

Plaintiff-Appellee, D.C. No. 3:20-cv-04040-SI

v. MEMORANDUM* M.R.G. CONCERTS LTD.; MATTHEW GIBBONS,

Defendants-Appellants.

Appeal from the United States District Court for the Northern District of California Susan Illston, District Judge, Presiding

Argued and Submitted December 11, 2023 San Francisco, California

Before: GOULD, KOH, and DESAI, Circuit Judges.

M.R.G. Concerts Ltd., along with its owner, Matthew Gibbons (collectively,

“MRG”), appeals the district court’s denial of its motion for judgment as a matter

of law or, in the alternative, a new trial. A jury determined that MRG had

unjustifiably and materially breached a contract between it and Eventbrite, Inc.

(“Eventbrite”) and awarded Eventbrite $11 million in damages. On appeal, MRG

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. no longer challenges the verdict on liability. Nor does MRG challenge roughly

$4.7 million of the jury’s damages award. However, MRG contends that the

remaining $6.3 million of the damages award was improper because such damages

stemmed from a “True-Up Provision” in the parties’ agreement that, MRG

contends, either (1) was not an applicable remedy for breach of the agreement, or

(2) is an unenforceable penalty under California law.

We have jurisdiction under 28 U.S.C. § 1291. We agree with MRG that,

under the parties’ agreement, the True-Up Provision does not apply to MRG’s

breach. Accordingly, we vacate the judgment as to damages and remand with

instructions to order remittitur and enter an amended final judgment.

1. Section 7 of the parties’ agreement states that, if MRG materially

breaches the agreement, MRG “must immediately repay the Sponsorship Payments

that Eventbrite has paid,” which totaled $3 million. Section 7 adds that “[t]he

parties agree that the damages to Eventbrite from the foregoing are difficult or

impossible to ascertain and that repayment of the Sponsorship Payments is a

reasonable approximation of such damages and will be deemed liquidated damages

and not a penalty.”

This contractual language is typical of liquidated damages provisions, which

permit parties to “provide ahead of time that a certain sum of money is

conclusively presumed to represent the amount of damage that will be caused by a

2 specified breach of the contract,” because “fixing the amount of actual damages

[is] . . . impracticable or extremely difficult.” Util. Consumers’ Action Network,

Inc. v. AT&T Broadband of S. Cal., Inc., 135 Cal. App. 4th 1023, 1028–29 (Cal.

App. 2006) (citations omitted). Where a commercial contract contains a liquidated

damages provision, a party’s damages for breach of contract will be limited to the

specified amount “unless the party seeking to invalidate the provision establishes

that the provision was unreasonable under the circumstances existing at the time

the contract was made.” Cal. Civ. Code § 1671(b).

Eventbrite has not contended at any point that Section 7 is unreasonable.

Accordingly, Eventbrite is limited to the specified amount, even if that amount, in

practice, fails to adequately compensate Eventbrite for MRG’s breach. See

generally, e.g., Better Food Mkts., Inc. v. Am. Dist. Tel. Co., 40 Cal. 2d 179 (Cal.

1953) (limiting recovery to $50 despite nearly $36,000 in actual damages). The

inclusion of Section 7 in the agreement is persuasive evidence that the parties

intended that the remedy for MRG’s breach would be MRG’s return of

Eventbrite’s sponsorship payments. Thus, under the contract, the remedy for

MRG’s breach is $3 million.

2. Eventbrite’s retorts are unpersuasive. Eventbrite primarily relies on a

clause in the True-Up Provision stating that “remedies under this section are

cumulative and in addition to all other available remedies.” This contention rests

3 on an error of logical reasoning. The quoted clause states that, if the True-Up

Provision applies, then other available remedies are also applicable. Eventbrite is

attempting to rely on the converse of this statement (i.e., “If other available

remedies apply, then the True-Up Provision is also applicable.”), which does not

necessarily follow. In other words, the cumulative remedies clause of the True-Up

Provision says nothing about whether the True-Up Provision itself applies in the

first place. Indeed, as MRG observes, the liquidated damages provision (Section

7) does not contain a cumulative remedies clause. Instead, Section 7 states that it

represents the “reasonable approximation” of damages from MRG’s breach.

3. At oral argument, Eventbrite suggested that, by accepting the jury’s

award of $4.7 million in damages, MRG had necessarily conceded that Eventbrite

was not limited to $3 million in damages from the liquidated damages provision.

To be sure, the jury awarded (and MRG does not contest) roughly $1.7 million in

additional damages under Section 1 of the parties’ agreement. Section 1, however,

was not a remedy for breach. Section 1 simply identified MRG’s outstanding

debts to Eventbrite under a previous agreement, consisting of advances to help

MRG promote events and customer refunds issued by Eventbrite. That a jury

awarded Eventbrite money that MRG already owed to Eventbrite does not mean

that the parties agreed to bypass the general rule that liquidated damages are the

exclusive remedy for breach.

4 4. Because we conclude that the parties’ agreement did not intend for the

True-Up Provision to be a remedy for breach, we do not address MRG’s argument

that the provision is invalid under California law.

5. The judgment is vacated as to damages. The district court’s decision

denying remittitur is reversed, and the court is instructed to enter an amended final

judgment reducing damages by $6,335,334.72 and accompanying prejudgment

interest on damages under the True-Up Provision.1 The parties shall bear their own

costs.

VACATED AND REMANDED.

1 MRG has not requested, in its briefing or at oral argument, that our court resolve the issue of prejudgment interest, and so we leave it to the district court to calculate in the first instance.