TRENTON, N.J. (Legal Newsline) - The National Football League has filed a reply memorandum in further support of its motion to dismiss the class action lawsuit against it that alleges it violated the New Jersey Consumer Fraud Act while selling 2014 Super Bowl tickets.
The NFL's memorandum was filed on May 15 in the U.S. District Court for the District of New Jersey after plaintiffs Josh Finkelman and Ben Hoch-Parker filed a brief in opposition to the defendant's motion to dismiss on May 8.
"Plaintiffs' opposition to defendants' motion to dismiss serves merely to confirm that plaintiffs' amended complaint should be dismissed," the memorandum states.
"Indeed, plaintiffs put the proverbial cart before the horse -- devoting the first half of their brief to arguments concerning the alleged legislative history underlying Section 35.1 before addressing the actual language of the statute or threshold deficiencies in standing, causation and damages that, alone, warrant dismissal of plaintiffs' claims."
The plaintiffs do not and cannot demonstrate that Hoch-Parker has standing when he did not purchase tickets for the Super Bowl and, even if he did, he is a resident of Oregon to whom the NJCFA does not apply, according to the defendant's memorandum.
The NFL claims the plaintiffs' assertion that Hoch-Parker is entitled to standing is based purely on a purported "loss of opportunity" because he allegedly considered purchasing Super Bowl tickets but chose not do is "so baseless it would essentially confer standing on anyone who even though about attending the Super Bowl."
"Plaintiffs also cannot overcome the absence of allegations sufficient to demonstrate causation," the defendant's memorandum states. "Neither plaintiff alleges that he attempted to purchase tickets at face value through the NFL lottery. In the absence of any such allegations, plaintiffs cannot demonstrate that defendants caused them to pay...above face value for their tickets."
In the plaintiffs' brief in opposition to the NFL's March 14 motion to dismiss, the plaintiffs stated that each year the NFL uses the same distribution method, which withholds from sale to the general public almost 99 percent of the tickets.
Seventy-five percent of withheld Super Bowl tickets are split among the 32 NFL teams, five percent to the host team, 17.5 percent to each team represented in the Super Bowl, and 35 percent split among the remaining 29 teams, with each getting 1.2 percent.
The remaining 25 percent of tickets are withheld for broadcast networks, media sponsors, the host committee and other league insiders, according to the plaintiffs' brief.
"The NFL asks the court to ignore the very reason why the law was passed and completely overlooks the legislative history and governmental studies which required 95 percent of tickets be sold to the public," said Bruce H. Nagel, an attorney for the plaintiffs. "The NFL fails to read the plain language of the law and puts its head in the sand hoping to avoid what is clear as day."
The NFL parties place no restrictions on the NFL's member clubs use of Super Bowl tickets, resulting in the auctioning by NFL franchises of their ticket allotments to the highest bidding ticket broker, according to the brief.
"The brokers then sell the tickets for exorbitant amounts on the secondary market," the brief states.
The NFL's actions force all consumers wanting tickets to the Super Bowl into the secondary market, where they have to pay substantially more than face value, according to the brief.
"Hoch-Parker has standing because he alleges a loss of opportunity," the brief states. "In addition, he has standing to assert his claims because the event giving rise to the claim occurred in New Jersey, a New Jersey statute regulates the NFL parties' conduct in New Jersey and New Jersey has a strong interest in protecting consumers from the unlawful acts of companies doing business in New Jersey."
While the plaintiffs' contend that the amended complaint is more than adequate to survive this motion, in the event that the court finds that any of the counts are lacking, the plaintiffs respectfully request an opportunity to amend their pleadings, the brief states.
In its motion to dismiss, which was filed March 14 in the U.S. District Court for the District of New Jersey, the NFL stated that the class action is billed as an attempt to address alleged violations of the NJCFA, a statute that regulates the practices of ticket brokers who are involved in the business of reselling ticket of admissions to places of entertainment within New Jersey and who charge premiums in excess of price, plus taxes, printed on the tickets.
"In reality, the action represents a challenge to a law considerably older and more tested than the NJCFA -- that of supply and demand," the motion to dismiss states. "Plaintiffs... aim to attribute the prices of Super Bowl tickets on the secondary market to the NFL's ticket distribution policies rather than the overwhelming demand for tickets to one of the most popular sporting events in the world."
Where there are numerous justifications warranting dismissal of the amended complaint for failing to state a claim, at the outset, the action should be seen for what it is -- a "strained attempt to stretch the NJCFA far beyond its obvious scope," according to the motion.
Every year the NFL prints "tens of thousands of Super Bowl tickets, yet it only allocates a meager one percent of these tickets for release to the general public through a lottery system, forcing all other fans into a secondary market for the tickets where they must pay substantially more than the ticket's face value to attend one of the most popular and iconic sporting events of the year," according to a complaint filed Jan. 6 in the U.S. District Court District of New Jersey.
Josh Finkelman and Hoch-Parker claim the profits from these secondary market sales are returned to the NFL and its franchisees in lucrative contracts with secondary ticket buyers who must purchase large blocks of tickets to regular season games of a franchise team in order to secure a small allotment of Super Bowl tickets.
The plaintiffs' claim the secondary market buyer then enhances their profitability by packaging their tickets into expensive deals requiring the interested fan to purchase extras, such as multi-night minimum stay hotel rooms, pre-game parties and limousine services.
The plaintiffs claim the practice of withholding all but one percent of its tickets to the general public constitutes a violation of the New Jersey Consumer Fraud Act.
On Dec. 30, Finkelman purchased two tickets to Super Bowl XLVIII for $2,000 per ticket, which was far in excess of the face value of the tickets, according to the suit.
Hoch-Parker considered purchasing Super Bowl tickets, but ultimately decided not to because of the cost.
The plaintiffs claim the NFL already has tax-exempt status and its acts and omissions allow it to gain millions of dollars in profits that it otherwise would not have gained.
The plaintiffs are seeking judgment against the NFL on their own behalf and that of others similarly situated for disgorgement of the monies by which the defendant was unjustly enriched, compensatory damages with interest and punitive damages. They are being represented by Nagel, Diane E. Sammons and Greg M. Kohn of Nagel Rice LLP.
The NFL is being represented by Jonathan D. Pressment of Haynes and Boone LLP; and Karen A. Confoy of Fox Rothschild LLP.
The case has been assigned to District Judge Peter G. Sheridan.
U.S. District Court for the District of New Jersey case number: 3:14-cv-00096
From Legal Newsline: Kyla Asbury can be reached at firstname.lastname@example.org.