Day 16: Judge Rips Counsel Apart Over Secret Witness Documents...
A secret cache tied to Live Nation employee's firing from rival AEG ..
Judge Subramanian came into the courtroom fuming Friday morning as lawyers once again hid information from him until the eleventh hour.
The issue arose ahead of the morning’s testimony from Rick Mueller, an executive who left a job at Live Nation to join rival AEG for 13 years (where he served as president), before returning to Live Nation in 2024. On Tuesday, the plaintiff states received a “cover email” with document attachments relating to Mueller’s departure from AEG. It’s understood the email contained a termination letter reflecting that he agreed to resign so as to not be terminated for cause and some other damning information related to his termination that neither party was previously aware of.
The plaintiffs did not share the documents with the defense or Judge Subramanian. Two days later, however, Adam Gitlin from the plaintiffs’ team and Jennifer Giordano from the defense wrote to the judge that they had reached a tentative agreement to limit questioning of Mueller to the general circumstances of his departure, i.e., that he agreed to resign rather than be terminated for cause.
Thursday night this all unraveled.
The exact order of events is unclear, but at 5 p.m. plaintiffs emailed Judge Subramanian ex parte (privately) informing him that there was an issue related to Mueller. This email, the judge said, was imbued with “complete secrecy,” and so he convened a phone call at 8 p.m. with the parties (13 hours before Mueller was set to take the stand), during which he suggested counsel continued to be evasive. It was only after the call, when he received the document attachments from the email, that he understood the issue.
We don’t know the contents of these documents likely related to Mueller’s termination from AEG and the issue they presented, but Judge Subramanian said in court that this had been “brewing,” which was why it was “imperative to raise this issue in advance.” Are you getting tired of the word “issue” yet?
Counsel for Live Nation maintained that they, too, had only learned of the documents’ contents that evening. Judge Subramanian pushed, suggesting they should understand why it seems odd that the company for whom Mueller now works would not know the details of his departure from his previous place of work. Lawyer and Live Nation EVP Dan Wall said he had some awareness, but “nothing approaching the materials provided.”
The parties’ conduct outside the jury’s presence throughout this trial has been defined by dropping major issues on the judge at the last minute and without the involvement of their chief trial attorneys. Yesterday, Judge Subramanian said this was “a problem with both parties.” Of course, I could have told you that nearly three weeks ago when we learned how the DOJ-Live Nation settlement came to pass.
Gitlin seemingly wanted to use the contents of these secret documents in his cross-examination of Mueller yesterday. But it was just the day before that he and defense attorney Giordano told the judge about set terms for the scope of Mueller’s questioning, which did not include whatever specifics these documents contain. Judge Subramanian was not happy.
“Are you saying it was not a deal?” Judge Subramanian questioned, increasingly raising his voice. “Are you saying that you shouldn’t be held to the deal, subject to witness answers?” The judge asked Gitlin to respond yes or no: “Are you prepared to proceed under the arrangement described yesterday?”
When Gitlin obfuscated without a yes or no answer, the temperature definitely rose a couple of degrees in the courtroom.
“No, you’re not going to hold up your end of the bargain; I think the answer is a no,” Subramanian declared.
At this point, Gitlin was struggling to put forth a response. “Don’t look around,” the judge charged. If he was indeed looking around, I don’t know who he could’ve been looking to for support. Rockstar antitrust attorney Jeffrey Kessler, who swooped in after the DOJ settled to help take the states over the finish line, was absent yesterday. Fitting with the chaos of this trial, he appears to have had a medical issue arise. His team said he was getting a small procedure and hopes to return on Monday.
Gitlin argued that he shouldn’t be held to the terms of the tentative agreement because the deal wasn’t between lead counsel, and he has known Giordano for years, suggesting that made it less official.
“Unconvincing,” the judge responded, informing the parties that yesterday’s agreement would be final.
Moving to the defense, the judge ripped apart a defense attorney for emailing him Thursday night with a request to destroy documents (it’s unknown if it was related to the secret Mueller documents.) Dumbfounded, Judge Subramanian said he would not do so and that they should “never ever email a Court and tell them to destroy documents.”
Mueller Takes the Stand
After a sip of his Coca-Cola to turn the page, Judge Subramanian ordered the jury be brought in, and soon enough Mueller was on the stand. On direct, he testified about Ticketmaster being superior to AXS, AEG’s ticketing service. He said his promoters were routinely frustrated with AXS. In one email a promoter called AXS “the worst ticketing service,” “pathetic” and “#3 in a 2-horse race.” Another email featured a conversation discussing the potential that an AEG partner would ask to switch from AXS to Ticketmaster, which they described as a “nuclear option.”
Mueller Reveals Beliefs About Ticketmaster’s Anticompetitive Conduct
It’s fair to say that Gitlin did a far better job asking Mueller questions than he did answering Judge Subramanian’s, and, ultimately, that is what matters for the outcome of the case. The defense typically counters the claims of Live Nation witnesses who have praised Ticketmaster’s ticketing systems by presenting instances where those witnesses complained about or experienced issues with the company. Unless the ticketing issues are groundbreaking, it’s a limited argument, because as we’ve heard repeatedly throughout this trial, every ticketing platform has issues.
What Gitlin was able to extract from Mueller was not just previous troubles with Ticketmaster’s tech but also Mueller’s beliefs that Ticketmaster and Live Nation banded together to use anticompetitive tactics against rivals, the heart of this case.
I’ll walk you through a couple highlights.
In one email exchange, Mueller and another AXS employee discussed a successful pitch they presented to a potential client. The other employee followed up that the venue’s larger team preferred ACS and had a “bad taste” about Ticketmaster from previous experiences. Not long after, Mueller got word that the venue got Live Nation for booking, writing that as a result they would likely go with Ticketmaster for ticketing.
In another instance, Ticketmaster had sold tickets in a fashion that violated the terms of service for a show AEG was promoting. They agreed to invalidate the tickets but then began delaying the process. Mueller said on the stand that he believed Ticketmaster was slow-peddling not because they were technologically incapable of getting it done fast but because AEG is a competitor of Live Nation and Ticketmaster.
Mueller also wrote in emails that Verified Fan, the Ticketmaster tool that makes customers register before buying tickets in an effort to prevent fraud, was ineffective and simply used to give Ticketmaster “exponentially” more data and, by virtue, a competitive advantage. In emails shown in court yesterday, Live Nation CEO Michael Rapino was quoted as writing that Verified Fan was “just to tell artist agents that you tried to stop scalpers…” There are no claims in this case directly related to Verified Fan or any Ticketmaster tool for that matter, but Live Nation will spend the next week arguing that its market share is due to the quality of its products. If plaintiffs can poke enough holes in this, they’re in a good spot.
Ironically, the termination of Mueller from AEG was one of the more unremarkable moments of the testimony. The witness list is stacked with rival promoters, ticketing executives and venue owners, as well as Live Nation employees, relatives and, of course, the company’s single biggest individual stockholder. Let’s just say there’s more than enough bias on all sides, and Mueller blends right in. That being said, we can’t say what the impact would have been had Gitlin been able to reveal the substance of these documents. Whatever it is, it seems bad.
On Monday we will likely hear from one of the defense’s most important witnesses, expert economist Eric Budish.