BALTIMORE, Maryland (Legal Newsline) - The Maryland Court of Appeals has answered four certified questions submitted by a U.S. district court regarding the service charge fees charged by ticket agencies.
The opinion, filed Jan. 18, was authored by Justice Alan M. Wilner.
"The plaintiff, Mr. Bourgeois, purchased online from Ticketmaster a ticket to a concert held at the Lyric in November 2009. The price printed on the ticket that Mr. Bourgeois received was $52," the opinion states.
"It is asserted, and so far not disputed, that Mr. Bourgeois was informed of that charge before deciding to purchase the ticket from Ticketmaster and knowingly decided to proceed.
"He received the ticket and attended the concert. Two years later, on behalf of himself and a proposed class of others similarly situated, he filed this action challenging the legality of Ticketmaster's collection of the service charge."
The challenge is based on certain articles of the Baltimore City Code and was initially filed in the Circuit Court for Baltimore City. The defendants removed the action to the U.S. District Court.
Andre Bourgeois, individually and on behalf of a class of others similarly situated, is the Plaintiff, and Lyric Productions LLC and other entities collectively referred to as Ticketmaster, are the defendants.
"Article 15, subtitle 21 of the 2000 version of the City Code regulates the sale of tickets to certain licensed events in Baltimore City, both by the entity putting on the event, such as Lyric, and by certain ticket agencies that also sell tickets to those events.
The articles stipulate in pertinent part that a "licensee" can not charge "any greater amount than 50 cents" over the price printed on the ticket and that "Scalping" is prohibited.
Lyric, as part of a "Facility Agreement," granted to Ticketmaster "exclusive Outlet Sales and Telephone Sales rights for all Events." Lyric retained the right to sell tickets at its box office although Lyric used Ticketmaster's system to conduct the sales.
The Agreement purports to authorize Ticketmaster to charge service charges and other charges on each ticket it sells. The amount of the charges "shall be determined solely by Ticketmaster and may be increased over time.
For all tickets sold by telephone or other electronic means Ticketmaster remits to Lyric the entire amount of the fact value of the ticket plus a percentage of the Ticketmaster service charges. The Agreement refers to this percentage as a "rebate." This rebate is not disclosed to ticket buyers, according to the opinion.
"From all of this, it seems apparent that, on all telephone and outlet sales, both Ticketmaster and Lyric receive an amount of money in excess of the price stated on the ticket (and, indeed, in excess of 50¢ more than the price stated on the ticket) and that it also may be the case, even on box office sales of tickets by Lyric to its own events, that Lyric receives a sum greater than the price stated on the ticket.
The defendants had noted in the litigation that Lyric had collected a $3 facility charge on its box office sales for years and that this facility charge was not reflected on the price printed on the ticket.
The District Court certified four questions to the state's highest court:
(1) Where a ticket agency is authorized in writing by a licensed exhibitor to sell tickets to an event, and the ticket agency collects both the established price printed on the ticket and an additional, separately-stated per-ticket service charge that would not be charged as part of the established ticket price when tickets are sold directly by the exhibitor, does the exception contained in Article 15, § 21-1(b) of the Baltimore City Code apply, so as to exempt the ticket agency from the requirement of licensure, see id. § 21- 1(a), and from the limitation of maximum service charges, see id. § 21-2?
(2) Does Article 19, § 55-1(a) of the Baltimore City Code prohibit the collection of a service charge, in addition to the established price printed on a ticket in connection with the original sale of the ticket by the exhibitor or the exhibitor's authorized agent? Or, instead, does § 55-1(a) apply only to ticket resales?
(3) If Article 19, § 55-1(a) applies to original ticket sales, does the exemption contained in § 55-1(b) apply, so as to allow a seller of tickets to charge a per-ticket service charge in addition to the established price printed on the ticket, where the seller is not licensed under Article 15, § 21-
1(a), and the service charge exceeds the maximum service charge permitted under § 21-2, but the seller is exempt from licensure under § 21-1(b)?
(4) Does Maryland recognize a common-law cause of action for money had and received and, if so, may a claim for money had and received be maintained to recover money collected in violation of the above-referenced Baltimore City ordinances?
The Court answered Question No. 1:
As to whether a ticket agency with arrangements similar to that presented is required to be licensed in the Baltimore City articles, the Court held -
"The Facility Agreement clearly provides a written authorization for Ticketmaster to make original sales of tickets to Lyric events as an agent for Lyric, and, for that reason, Ticketmaster (as the only agency so authorized) is not required to be licensed by reason of exercising that authority." wrote Justice Wilner regarding the specific situation presented in this case.
And generally, "If a ticket agency is authorized in writing by a licensed exhibitor to sell tickets as an agent of the exhibitor, the ticket agency is not required to be licensed by reason of exercising that authority. A purported authorization by the exhibitor to charge more than the established price is invalid and does not limit or expand the exception in § 21- 1(b)."
Question No. 2:
As to whether the articles in question apply to original sales or only resales, the Court held -
"[T]he language used by the City Council is unambiguous and cannot properly be read as limited to the resale of tickets. If the City Council meant to limit the ordinance in that manner, it could easily have said so, as other legislatures have done.
"Except as permitted in § 55-1(b), it prohibits the collection of a service charge, in addition to the established price printed on a ticket, in connection with the original sale of the ticket by the exhibitor or the exhibitor's authorized agent."
Question No. 3:
As to whether a ticket action not licensed and not required to be licensed could add a service charge to the printed price, the Court held -
"Article 19, § 55-1(b) does not permit anyone other than a ticket agency licensed under Art. 15, § 21-1 to collect anything more for a ticket than the established price printed on the ticket plus applicable State or Federal taxes.
"Included in that prohibition is a ticket agency exempt from licensure under Art. 15, § 21-1(b). Section 55-1(b) does permit a ticket agency licensed under Art. 15, § 21-1 to collect an additional 50¢ per ticket."
Question No. 4:
As to whether Maryland continued to recognize the Common Law action of "money had and received, and if so, could such an action be maintained to recover money collected in violation of the Baltimore City Ordinance, the Court held -
"An action for money had and received is a well-established remedy with a long history in this State, and, so long as it continues to have any usefulness, we see no reason to abrogate it.
"Except with respect to a usurious contract, however, the action does not lie to recover money paid under a fully consummated contract as to which the parties may be regarded as being in pari delicto." (In pari delicto - equal wrongdoers)
Having been informed by the Maryland Court, the U.S. District Court will now continue proceedings in the original action.
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