Bourgeois v. Live Nation Entm't, Inc.

• Decision Date: 20 March 2014
• Docket Number: Civil Action No. ELH–12–cv–00058.
• Parties: Andre BOURGEOIS, Plaintiff, v. LIVE NATION ENTERTAINMENT, INC., et al., Defendants.
• Court: U.S. District Court — District of Maryland

3 F.Supp.3d 423

Andre BOURGEOIS, Plaintiff,

v.LIVE NATION ENTERTAINMENT, INC., et al., Defendants.

Civil Action No. ELH–12–cv–00058.

United States District Court,

D. Maryland.

March 10, 2014.

As Corrected March 20, 2014.

Benjamin Howard Carney, Martin Eugene Wolf, Richard S. Gordon, Gordon, Wolf & Carney, Chts., Towson, MD, for Plaintiff.

James D. Mathias, Melissa Rubin Roth, Robert J. Mathias, DLA Piper US LLP, Lawrence Joseph Quinn, Kelly M. Marzullo, Tydings and Roenberg LLP, Baltimore, MD, Daniel Patrick Kearney, Jr., Heather T. Mowell, Patrick J. Carome, Wilmer Cutler Pickering Hale and Dorr, Washington, DC, for Defendants.

MEMORANDUM OPINION

ELLEN LIPTON HOLLANDER, District Judge.

Andre Bourgeois, plaintiff, on behalf of himself and a proposed class of others similarly situated, filed suit against Live Nation Entertainment, Inc. (“Live Nation”); its licensee, Monumental Ticketing Limited Partnership (“Monumental”) (collectively with Live Nation, “Ticketmaster”); and Lyric Productions, LLC, d/b/a Lyric Opera House (the “Lyric”), defendants.¹ The Lyric operates the Arthur and Patricia Modell Performing Arts Center. The litigation is rooted in plaintiff's purchase of a ticket in 2009 through Ticketmaster's website for a concert held at the Lyric; plaintiff was charged $52 for the ticket and an additional $12 in “service charges.”

In particular, plaintiff now challenges the legality of Ticketmaster's collection of such “service charges” in connection with its sales of tickets to entertainment events in Baltimore City (hereinafter sometimes referred to as “Baltimore” or the “City”). For events held at the Lyric, Ticketmaster remits a portion of the “service charges” to the Lyric, pursuant to a Facility Agreement.²

The Complaint contains ten counts. Generally, plaintiff asserts three substantive allegations of wrongdoing. First, plaintiff contends that Ticketmaster's collection of service charges violates two provisions of the Baltimore City Code. Second, plaintiff alleges that Ticketmaster engaged in fraud and/or misrepresentation by falsely representing that the service charges it collected were legal. Third, plaintiff alleges that Ticketmaster engaged in fraud and/or misrepresentation by concealing and/or failing to disclose that it remits to the Lyric a portion of the service charges it collects.

The first four counts, asserted against all defendants, are as follows: (I) “Money Had and Received”; (II) “Negligent Misrepresentation”; (III) “Violation of the Maryland Consumer Protection Act”, Md.Code (2005 Repl.Vol., 2011 Supp.), §§ 13–101 et seq. of the Commercial Law Article (“C.L.”); and (IV) “Deceit by Non–Disclosure or Concealment”. The other six counts allege claims against various combinations of the defendants for violations of several provisions of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq.³ In particular, Bourgeois alleges that Ticketmaster represented that the $12 fee it charged Bourgeois was for its services when, in reality, a portion of that $12 was “secretly” remitted to the Lyric as an undisclosed “kickback.”

Initially, each defendant moved to dismiss for failure to state a claim, see ECF 18, 19, 21, while plaintiff moved to certify questions of law to the Maryland Court of Appeals. ECF 25. All of the motions were fully briefed. See ECF 24, 30, 33, 34, 39. Because plaintiff alleged that defendants had violated two Baltimore City ordinances that had not been interpreted by the Maryland appellate courts prior to plaintiff's suit, I certified several questions to the Maryland Court of Appeals. ECF 53. In an opinion of January 18, 2013, the court answered those questions. See Bourgeois v. Live Nation Entm't, Inc., 430 Md. 14, 17, 59 A.3d 509, 511 (2013).⁴

Thereafter, defendants filed a joint, second Motion to Dismiss (“Motion,” ECF 60), along with a Memorandum (“Memo,” ECF 60–3), and exhibits. Plaintiff opposes the Motion (“Opp.,” ECF 63), and has also filed exhibits. ⁵ No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons set forth below, I will deny the Motion as to Count I and will grant the Motion as to Counts II–XI.

Factual Summary⁶

Ticketmaster operates a nationwide ticket business through which it conducts original ticket sales to events on behalf of performance venues and promoters, pursuant to written agreements with the venues and promoters. The ticket sales relevant to this lawsuit are Ticketmaster's ticket sales to events in Baltimore City, including events at the Lyric, which operates a theater for live performances in Baltimore City.⁷

The Lyric and Ticketmaster are parties to an agreement (“Facility Agreement,” ECF 18–7) under which Ticketmaster has the exclusive right to sell tickets by telephone or over the internet to events held at the Lyric (except for performances of the Baltimore Opera). Compl. ¶¶ 6–8. Although the Lyric retains the exclusive right to sell tickets in person at the Lyric's box office, it utilizes Ticketmaster's ticketing system to conduct such sales. See Facility Agreement.

In addition to the “face value” price charged for each ticket purchased by telephone or over the internet, Ticketmaster assesses what plaintiff refers to as “service charges.” Id. ¶ 13. Pursuant to the Facility Agreement, the amount of the service charges is set by Ticketmaster. For each ticket to a Lyric event sold by telephone or over the internet, Ticketmaster remits the entire face value of the ticket to the Lyric, along with a portion of the service charges.⁸ The remitted portion of the service charges is characterized in the Facility Agreement as a “rebate”; plaintiff characterizes it as a “kickback.” Id. ¶¶ 14, 28, 46.⁹

Bourgeois purchased a ticket from Ticketmaster to a concert by the singer-songwriter Jackson Browne, which was held at the Lyric on November 9, 2009. Id. ¶ 40. Bourgeois bought the ticket over the internet, using Ticketmaster's website (www. ticketmaster. com). Id. The face value of the ticket—the price that Bourgeois alleges was publicly advertised and that was printed on the ticket—was $52. Id. ¶ 41. However, Bourgeois was also charged more than $12 in what he refers to as “service charges.” Id. ¶ 42. The amount of the service charges was disclosed to Bourgeois during the purchase process, before he agreed to purchase the ticket. The $52 face value of the ticket, along with a portion of the service charges, allegedly was remitted by Ticketmaster to the Lyric. Id. ¶ 43.

Bourgeois alleges that the collection of these service charges by the Lyric and/or by Ticketmaster violates Article 15, Subtitle 21 (the “Licensing Ordinance”) and Article 19, Subtitle 55 (the “Police Ordinance”) of the Baltimore City Code (collectively, the “Ordinances”). The text of the Ordinances is as follows:

Article 15

Licensing and Regulation

* * *

Subtitle 21

Ticket Agencies

§ 21–1. License required.

(a) In general.

No person shall engage in the business of selling the tickets, cards, or other tokens evidencing the right of admission to exhibitions, performances, games, or sports conducted by licensees under licenses issued by the State of Maryland or [the] City of Baltimore, or shall open or conduct an office, agency, or other place by whatever name known at which such tickets are sold or offered for sale, unless a license shall have been issued to such persons by the Director of Finance upon the payment of the fee herein prescribed.

(b) Exception.

Provided, however, that no license shall be required of any agent duly authorized in writing by a licensed exhibitor to sell tickets for said licensee at the established price printed thereon.

(c) Scope; term; fee.

(1) Each such license shall be limited to a single location or place of business and shall expire on January 1 next ensuing the grant thereof.

(2) The fee for such a license shall be $250 and the said license fee shall not be prorated.

§ 21–2. Maximum service charge.

A licensee under this section, or any officer or employee thereof, shall not directly or indirectly exact, accept, or receive for any ticket or token of admission to an exhibition, performance, game, or sport conducted by a licensee under a license granted by the State of Maryland, or the City of Baltimore, any greater amount than 50¢ in excess of the sum of the regular or established price or charge therefor printed on the face of such ticket, plus the amount of any tax imposed by the Government of the United States or by the State of Maryland upon such ticket or the right of admission thereunder.

§ 21–3. “Scalping” prohibited.

(a) Price to be on ticket.

Wherever the right of admission to any licensed exhibition or performance or to any game or sport where a charge is made is evidenced by a ticket, card, or other token, the regular or established price or charge therefor shall be conspicuously printed thereon.

(b) Sale for more prohibited; penalties.

(1) If such licensee, or any of his officers or employees, shall extract, accept, or receive, directly or indirectly, any greater amount than such regular or established price or charge, plus the amount of any tax imposed by the Government of the United States or the State of Maryland:

(i) the license of such licensee may be revoked and annulled; and

(ii) such licensee, officer, or employees shall be guilty of a misdemeanor and, upon conviction thereof, shall be subject to a fine of not more than $500 for each such violation.

(2) The sale of each ticket in violation thereof shall constitute a separate offense.

§ 21–4. Revocation of licenses.

The license of any licensee under this subtitle may be revoked and annulled by the Director of Finance for any violation of this subtitle.

§ 21–5. Penalties for operating without license.

Any person who shall engage in any business or conduct an office, agency, or other place for which a license is required by this subtitle, without procuring such license, shall be guilty of a...