The New Jersey Supreme Court has ruled that the National Football League’s ticket sales practices for the 2014 Super Bowl did not violate the state’s Consumer Fraud Act.
The ruling, issued at the request of the U.S. Court of Appeals for the Third Circuit, appears to spell defeat for a class action targeting the NFL’s manner of distributing tickets to Super Bowl XLVIII, held at MetLife Stadium in East Rutherford in February 2014.
The Third Circuit asked the Supreme Court to decide whether the NFL’s practice of distributing nearly all Super Bowl tickets to teams, league insiders, advertisers and the media violated 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 Third Circuit is addressing the issue after a U.S. District Court judge dismissed the class action, Finkelman v. National Football League.
The plaintiff appealed the dismissal to the Third Circuit, which asked the Supreme Court to address the question, “Does plaintiff Josh Finkelman properly plead a claim under the New Jersey Ticket Law, N.J.S.A. 56:8-35.1?”
The Supreme Court accepted the certified question and split it into three questions: The first question was does the term “person who has access to tickets to an event prior to the tickets’ release for sale to the general public” encompass only ticket brokers and resellers? The justices answered with ”no.”
The court answered “yes” to the second question, “Are tickets to an event that are sold to winners of a lottery ‘released for sale to the general public’ within the meaning of [section 35.1]?”
Finally, the court answered “yes” to whether “tickets distributed to selected entities are ‘withheld from sale to the general public’ within the meaning of [section 35.1].”
But the court concluded that the 1 percent of tickets made available to the public, via lottery, were the only 2014 Super Bowl tickets designated by the NFL for release for sale to the general public within the meaning of Sec. 35.1.
“Accordingly, we do not consider the NFL’s distribution of other tickets to the 2014 Super Bowl to its teams, other selected individuals, and entities to constitute the unlawful holding of more than five percent of ‘tickets to an event prior to the tickets’ release for sale to the general public’ under Sec. 35.1,” Justice Anne Patterson wrote for the court.
U.S. District Judge Peter Sheridan dismissed the class action after holding that Finkelman failed to state a claim under Sec. 35.1. Sheridan construed that section to apply only to ticket brokers, not to event sponsors such as the NFL, and concluded that the NFL had not withheld tickets because it never retained tickets in its custody.
The statute was in effect when the Super Bowl was held in New Jersey in 2014, but Sec. 35.1 has since been repealed, effective Feb. 1 of this year.
On appeal, Finkelman contends the statute is not limited to ticket brokers and resellers, and the Legislature’s definition of “person” is broader than its definition of “ticket broker.” He further asserted that the NFL’s Super Bowl ticket lottery constituted a release of tickets for sale to the general public for purposes of Sec. 35.1, and that the NFL’s allocation of 99 percent of Super Bowl tickets to individuals and entities connected to its operations constitutes a “withholding” of tickets for sale within the meaning of Sec. 35.1.
The NFL, for its part, contended that the statute applies only in events where the sponsor makes tickets available to the general public, and argued that the 2014 Super Bowl was not such an event. The justices concluded that the Super Bowl tickets sold to winners in the lottery were released for sale to the general public.
On the question of whether the 99 percent of Super Bowl tickets distributed to selected entities constitute tickets to an event that are withheld from sale to the general public, the court said the statute is unclear. Finkelman contended the Legislature enacted Sec. 35.1 to ensure that 95 percent of all tickets to an event would be made available to the public. But Patterson wrote for the court that the Legislature would have made that provision “in unmistakable terms” if it had intended to impose such a restriction.
The justices concluded that the Legislature sought to impose a more modest constraint on the sale of tickets to sports and entertainment events.
“There is no evidence in Section 35.1′s language—or in its history over the seventeen years for which it was effective and during which New Jersey hosted countless sports and entertainment events—that the Legislature intended it to be the draconian measure that the plaintiff describes,” Patterson wrote.
Bruce Nagel of Nagel Rice in Roseland, New Jersey, who represents Finkelman and the potential class, called the ruling “illogical” and “the worst consumer fraud ruling out of the Supreme Court in decades.”
The court’s finding that the NFL has the right to withhold 99 percent of Super Bowl tickets from sale to the public “makes no sense,” Nagel said.
“I can’t figure it out. The bottom line is it’s a very sad day for consumers,” Nagel said.
Nagel said he has not yet looked into options for how to proceed with the case.
Jonathan Pressment of Haynes and Boone in New York, who argued for the NFL, referred questions to the NFL.
Brian McCarthy, vice president for communications at the NFL, said in a statement, “We are pleased by today’s ruling by the New Jersey Supreme Court, which unanimously confirmed that the NFL’s distribution of Super Bowl XLVIII tickets was in full compliance with applicable law.”