Lawyers squared off before the New Jersey Supreme Court, debating—for the benefit of the U.S. Court of Appeals for the Third Circuit—whether the National Football League’s Super Bowl ticket sales practices violate the state’s consumer fraud law.
The Third Circuit previously asked the Supreme Court in a certified question to interpret New Jersey’s Consumer Fraud Act and determine whether the NFL’s Super Bowl ticket sales practices—in which nearly none of the tickets were made available to the general public, except through the secondary market—violate the terms of the statute.
The justices are considering if the NFL’s policies ran afoul of the CFA’s language declaring it unlawful for persons controlling ticket sales to withhold from the general public more than 5 percent of available tickets to an event.
The suit focuses on ticket sales for Super Bowl XLVIII, held at MetLife Stadium in East Rutherford in February 2014. The suit claims 99 percent of game tickets went to teams and league insiders, and only 1 percent were sold to the public by lottery. Named plaintiff Josh Finkelman alleged he bought two tickets with a face value of $800 each, but claimed he paid $2,000 each for the tickets on the secondary market.
The plaintiffs’ attorney, Bruce Nagel, said in the Sept. 27 arguments before the state Supreme Court that the CFA always has been meant to be interpreted liberally to benefit “in a way that [gives] broad protections” to consumers.
The NFL’s Super Bowl ticket sales policy in effect requires fans to buy tickets off the secondary market, and thus illegally inflates the value of tickets, said Nagel, of Roseland’s Nagel Rice.
The MetLife Super Bowl should be classified as an “event” under the CFA, meaning that the NFL should not have been allowed to restrict ticket distribution in the manner that it did, Nagel said.
Aside from the inflated secondary market, “there was no way for the general public to procure tickets,” he said.
“It’s the single most-popular, well-known event in the United States,” Nagel told the court.
A number of justices posited hypothetical situations in which others, such as Google or musical artist Taylor Swift, scheduled private shows but decided to make a limited number of tickets available to the public.
At that point, Nagel said, those shows would be “public events” where ticket resales should not be restricted to the secondary market.
“Once they open the door, the CFA applies,” he said.
The NFL’s attorney, Jonathan Pressment, said the NFL did not act improperly, and contended that the Super Bowl was not a public event as defined by the CFA.
“It’s no secret that the NFL did not release tickets to the Super Bowl to the general public,” said Pressment, of the New York office of Haynes and Boone.
The NFL has the right to establish ticket sales rules for its own event, Pressment said, adding that the league has always dedicated the majority of Super Bowl tickets—of which there are a limited amount—to teams, league sponsors, corporations and others considered to be VIPs.
The NFL has no plans to make such tickets more available to the general public on the initial sales market, he said.
“That makes no sense,” he said. In effect, Pressment said, the Super Bowl is a private event held by the NFL, which has the right to determine who gets the first chance at tickets.
The suit, Finkelman v. NFL, filed in January 2014, is brought on behalf of a class of fans who bought tickets to the event for more than face value, claiming that most tickets are distributed to the 32 NFL teams who inflate the prices and then offer them in packages along with luxury hotels, meals and limousines.
The suit alleges the insiders are more likely to sell those tickets through third-party brokers, to keep those sales anonymous, and those brokers, in turn, charge higher prices. It claims that, if more tickets were made available to fans initially, more tickets would be sold through fan-to-fan sales, keeping the price down.
U.S. District Judge Peter Sheridan of the District of New Jersey dismissed the case twice for lack of standing, and the case was heard twice at the Third Circuit. The first time the case went to the court of appeals, the panel’s January 2016 ruling affirmed the court below on lack of standing. On its second trip to the appeals court, Finkelman was held in December 2016 to have demonstrated standing under Article III of the U.S. Constitution. Additionally, he made out claims in his amended allegations that the NFL’s withholding of tickets drove up prices in the secondary market, according to the appeals court. The appeals court then issued a certified question asking the New Jersey Supreme Court for its interpretation of the CFA.