Monday, August 01, 2011

Secondary Market Sales of Yankees’ Tickets Not Deceptive Practices

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

Purchasers of New York Yankees tickets failed to state a deceptive practices claim under New York General Business Law against online ticket marketer StubHub; its parent, eBay; and the New York Yankees for StubHub’s failure to identify the individual seller and face value of tickets, the federal district court in New York City has ruled.

The putative class representative alleged that the Yankees’ website directed purchasers to the retailers’ website and that StubHub deceptively failed to identify the seller and the face value of the tickets.

Standing to Sue

Since none of the members of the proposed class purchased tickets through an eBay auction, the sole basis for the purchaser’s standing to sue eBay was the company’s parent/subsidiary relationship with StubHub. However, a parent corporation is not liable for the actions of its subsidiary absent facts sufficient to pierce the corporate veil, the court stated. In this instance, the purchaser did not plead facts that would justify piercing the corporate veil.

Deceptive Practices

To state a claim for deceptive practices under New York General Business Law §349, the purchaser needed to show the defendants engaged in a deceptive act that was directed at consumers, was misleading to reasonable consumers, and caused an injury.

The purchaser argued that—because the Yankees’ website links to StubHub and StubHub sellers are anonymous—the “least sophisticated consumer” would likely believe that he or she is purchasing tickets directly from the Yankees and StubHub’s practice of not printing the face value of a ticket reinforces the misconception that the tickets were purchased from the Yankees.

The court pointed out (1) that the applicable legal standard is whether a reasonable consumer—not the “least sophisticated consumer”—would be misled by the defendants’ actions and (2) that the link on the Yankees’ site led to an entirely new website with a different URL and offers of tickets to non-Yankee events. The tickets printed from the linked website included a StubHub customer number and StubHub confirmation number.

In addition, the purchaser pleaded no facts establishing that the alleged deceptive acts caused any injury. The purchaser claimed two injuries:
(1) lack of information about pricing, and

(2) that consumers were “forced” to pay higher ticket prices because of the failure to include face value of the tickets.

Lack of information is not an injury, but the factual underpinning of the deceptive practices claim, the court held. As to higher prices, the purchaser was willing to pay $33 per ticket to see the Yankees. There was no claim that she would not have made the purchase had she known that the face value of the tickets was $20 apiece.

Because the purchaser could not show that a reasonable person would believe that the tickets were being sold by the Yankees or a measurable injury, the court dismissed the claim.

Liability for Third-Party Sales

A contrary ruling would make the Yankees liable for every sale of tickets by a third party, according to the court.

There was no evidence that declining to inform consumers of the face value of the tickets caused consumers to overpay or that any deceptive conduct was undertaken by any of the parties. Consumers could always compare the ticket price to prices listed on the Yankees' website.

The decision is Weinstein v. eBay, Inc., CCH State Unfair Trade Practices Law ¶32,295.

Further information about CCH State Unfair Trade Practices Law appears here.

No comments: