Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D. N.J.: Claims against concert promoter for wrongful ticket withholding fail, (Sep 17, 2014)

By Linda O’Brien, J.D., LL.M.

A consumer failed to state New Jersey Consumer Fraud Act claims against a concert tour promoter for allegedly wrongfully withholding tickets for sale to the general public, resulting in inflated ticket prices, the federal district court in Newark, New Jersey has held (Pollard v. AEG Live, LLC, September 16, 2014, Chesler, S.).

In 2010, Jessica Pollard purchased tickets to a Bon Jovi concert at MetLife Stadium and a Justin Bieber concert at the Prudential Center. Pollard filed suit against tour promoter AEG Live, alleging that she paid far in excess of the tickets’ face value in violation of the New Jersey Consumer Fraud Act (NJCFA). Specifically, Pollard asserted that the ticket prices were inflated as a result of the wrongful withholding of tickets for sale to the general public by the tour promoter. The defendants moved for dismissal.

The NJCFA prohibits those with access to tickets to performances and other public events from restricting the supply of tickets and thus unfairly driving up the price of admission to the general public. To state a claim under the NJCFA, a plaintiff must allege (1) unlawful conduct by the defendants, (2) an ascertainable loss by the plaintiff, and (3) a causal relationship between the defendant’s conduct and the plaintiff’s loss.

The court found that the plaintiff failed to state a plausible claim that the defendants withheld tickets from sale to the general public. Pollard’s allegations that AEG gave tickets to insiders and sponsors, and knowingly diverted tickets into the resale market, was conclusory and did not identify any act of withholding tickets, according to the court. The plaintiff argued that, because she purchased the concert tickets on the resale market and paid an amount in excess of the tickets’ face value, AEG must have withheld tickets from sale to the public. However, the court noted that it was equally plausible that the plaintiff’s purchase on the resale market occurred because general demand was such that all tickets had sold out prior to the date on which she bought her tickets.

However, the plaintiff adequately pleaded the elements of ascertainable loss and causation under the NJCFA. Pollard sufficiently alleged that she paid a price far in excess of the face value of the tickets as a result of AEG’s ticket diversion. In rejecting the defendants’ argument that the plaintiff’s economic loss relies on an invalid theory of price inflation, the court noted that the plaintiff did not allege any misrepresentations or fraud on the market. Rather, her claim that she overpaid for the tickets as a result of the defendants’ alleged NJCFA violation was premised on the economic reality of supply and demand. Finally, since the plaintiff outlined a potentially viable claim for relief, her claims were dismissed without prejudice, with leave to file an amended complaint.

The case is No. 14-1155.

Attorneys: Bruce Heller Nagel (Nagel Rice, LLP) for Jessica Pollard. James S. Richter (Winston & Strawn, LLP) for AEG Live, LLC, AEG Live NJ, LLC, and Concerts West.

Companies: AEG Live, LLC; AEG Live NJ, LLC; Concerts West

Cases: StateUnfairTradePractices NewJerseyNews