Thursday, February 26, 2009

Promoting Season Ticket Deals While Relocating Team Not Consumer Protection Act Violation

This posting was written by Jody Coultas, Editor of CCH State Unfair Trade Practices.

An NBA team owner’s promotion of multi-year season ticket deals, while working to relocate the team, did not violate the Washington Consumer Protection Act, absent proof that complaining season ticket holders suffered injury that could be compensated by the Act, according to the federal district court in Seattle.

After the Professional Basketball Club, LLC bought the Seattle Supersonics franchise in 2006, rumors began to circulate that the new ownership would move the team to Oklahoma City. In order to curb uncertainty over the team’s future in Seattle, the owners created a benefit program for season ticket holders named the “Emerald Club.”

Commitment Through 2010

Advertising for the Emerald Club offered an “unprecedented commitment to provide three-year cost certainty through the 2009-10 season,” guaranteeing that 2006-2007 season ticket holders could purchase tickets for the next three seasons with no price increases.

The complaining parties, who were 2007-2008 season ticket holders, enrolled in the Emerald Club and bought season tickets for the 2008-09 season. Nearly 1,400 other season ticket holders made the same decision. Nevertheless, the Professional Basketball Club moved the Supersonics to Oklahoma City after the 2007-2008 season ended.

A number of season ticket holders filed a class action under the Consumer Protection Act (CPA) against PBC for “impliedly representing that the team would remain in Seattle through the 2010 season in order to entice season ticket holders to renew, while simultaneously making undisclosed efforts to move the Sonics from Seattle.” The ticket holders sought class certification and a full refund for the final season at the Seattle arena, plus attorney fees and costs.

Compensable Injury

However, the ticket holders failed to state a CPA action because they did not present evidence of a compensable injury that arose from the Professional Basketball Club’s allegedly deceptive conduct, the court held. A cognizable injury under the CPA is the diminishment of a plaintiff’s property interest or money because of unlawful conduct.

Although there was sufficient evidence to conclude that the ownership was working to relocate the Sonics even as it promoted the Emerald Club and future seasons in Seattle, the season ticket holders did not suffer an injury that could be remedied by the CPA.

The ticket holders alleged that they would not have bought tickets for the 2008-2009 season had the owner been upfront with its plan to move the team to Oklahoma City. Nevertheless, the ticket holders fully appreciated their season tickets and went to every game. They did not present a loss that could be compensated. Furthermore, the ticket holders presented no evidence to demonstrate that the value of their 2007-2008tickets decreased as a result of the PBC’s deception.

Although the ticket holders’ CPA claims and request for class certification failed, the ticket holders’ breach of contract claims survived summary judgment.

The decision is Brotherson v. The Professional Basketball Club, L.L.C, February 23, 2009. It will appear at CCH State Unfair Trade Practices ¶31,771.

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