Heerwagon v. Clear Channel Communication

Heerwagen v. Clear Channel Communication2nd Circuit Court of Appeals435 F.3d 219 (2nd Cir. 2006)

Key Search Terms: class certification, Sherman Act, antitrust,entertainment, FRCP 23, monopoly

FactsMalinda Heerwagen, an Illinois resident, attended ten concerts in the Chicagoarea between 1997 and 2004. She did not purchase or research ticket pricesfor any other market. Heerwagen brought this suit as a representative for anational class of victims, against Clear Channel Communications for violatingSection Two of the Sherman Antitrust Act. She claimed Clear Channel inflatedticket prices and monopolized the concert market. Clear ChannelCommunications is a Texas based company, which owns subsidiaries ClearChannel Radio, Inc. and Clear Channel Entertainment, Inc. In 2001 ClearChannel accounted for 70 percent of concert ticket revenue in the UnitedStates. Heerwagen sought certification as representative for a nationwide classof ticket purchasers injured by Clear Channels’ monopoly. Heerwagen claimsthat Clear Channel engaged in anticompetitive, predatory and exclusionarypractices to extend its monopoly power in the national market for concerttickets, violating § 2 of the Sherman Antitrust Act.

IssueThe issue on appeal is whether local market or the national market is morerelevenat and whether Heerwagen properly represented the relevant market.

HoldingThe 2nd Circuit affirmed the district court’s holding that Clear Channel did nothave the power to control national prices and exclude competition, soHeerwagen’s local market was more relevant. The 2nd Circuit reasoned thatHeerwagen failed to show her claim was relevant to a national market becauselocal markets for ticket sales are not transformed into national markets simplybecause concert tours are coordinated nationally. The court of appeals heldthat Heerwagen failed to show that she represented the relevant local ticketmarket.

Summarized By: Vanessa Sheehan