Finkelman v. Nat'l Football League
| Decision Date | 09 January 2019 |
| Docket Number | A-38 September Term 2017,080501 |
| Parties | Josh FINKELMAN, on Behalf of Himself and the Putative Class, Plaintiff-Appellant, v. NATIONAL FOOTBALL LEAGUE; NFL Ventures, L.P. ; NFL Properties, L.L.C., NFL Ventures, Inc. ; NFL Enterprises, L.L.C., Defendants-Respondents. |
| Court | New Jersey Supreme Court |
Bruce H. Nagel argued the cause for appellant (Nagel Rice, attorneys; Bruce H. Nagel, Robert H. Solomon, and Greg M. Kohn, Roseland, on the briefs).
Jonathan D. Pressment (Haynes and Boone) of the New York bar, admitted pro hac vice, argued the cause for respondents (Haynes and Boone and Fox Rothschild, attorneys; Jonathan D. Pressment, of counsel and on the briefs, and William Feldman, a member of the New York, Texas, and District of Columbia Bars, admitted pro hac vice, on the briefs, and Karen A. Confoy, and Allison L. Hollows, Lawrenceville, on the briefs).
Jeffrey S. Jacobson argued the cause for amicus curiae New Jersey Business and Industry Association (Kelley Drye & Warren, attorneys; Jeffrey S. Jacobson, on the briefs).
In this appeal, we review questions certified by the United States Court of Appeals for the Third Circuit. The Third Circuit certified the questions in the course of its review of Josh Finkelman's putative class action against defendants, the National Football League and related entities (NFL), arising from the NFL's distribution of tickets to the 2014 Super Bowl.
The certified questions concern N.J.S.A. 56:8-35.1 (section 35.1), a consumer protection statute that regulates ticket sales to sports and entertainment events. Section 35.1 provides:
It shall be an unlawful practice for a person, who has access to tickets to an event prior to the tickets' release for sale to the general public, to withhold those tickets from sale to the general public in an amount exceeding 5% of all available seating for the event.
The law was in force when the Super Bowl was held in New Jersey on February 2, 2014. The Legislature, however, has since repealed section 35.1, effective February 1, 2019.
The NFL, following its established practice for Super Bowl games, sold one percent of the tickets to the 2014 Super Bowl to members of the public who had won the right to purchase those tickets in an NFL-sponsored lottery. The NFL gave the remaining ninety-nine percent of the tickets to teams, broadcast networks, corporate sponsors, and other individuals and entities.
Plaintiff Josh Finkelman alleges that the NFL's allocation of the 2014 Super Bowl tickets constituted "withhold[ing]" of an excessive percentage of those tickets contrary to section 35.1. In his individual capacity and as the representative of a proposed class of individuals who either bought 2014 Super Bowl tickets at premium prices on the secondary market or could not afford to do so, plaintiff seeks various remedies including treble damages under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -210. The United States District Court for the District of New Jersey dismissed the action pursuant to Fed. R. Civ. P. 12(b)(6), and plaintiff appealed.
The Third Circuit submitted the following certified question to this Court: "Does plaintiff Josh Finkelman properly plead a claim under the New Jersey Ticket Law, N.J.S.A. 56:8-35.1 ?" We accepted the certified question and reformulated it as follows:
In response to the Third Circuit's inquiry, we construe the term "person" in section 35.1 to include not only ticket brokers and resellers, but also other individuals and entities with "access to tickets to an event prior to the tickets' release for sale to the general public." N.J.S.A. 56:8-35.1. We view the sale of tickets to winners of the NFL's ticket lottery to constitute a "release for sale to the general public" within the meaning of section 35.1.
We conclude, however, that the Super Bowl tickets sold to lottery winners were the only 2014 Super Bowl tickets designated by the NFL for "release for sale to the general public" within the meaning of section 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 withholding of more than five percent of "tickets to an event prior to the tickets' release for sale to the general public" under section 35.1.
We derive our summary of the facts and procedural history from the Third Circuit's Certification of Questions of Law, the pleadings and briefs, and the record submitted by the parties.
In 1983, the Legislature enacted the Ticket Resale Law, N.J.S.A. 56:8-26 to -38, as a provision of the CFA. L. 1983, c. 135. Pursuant to the Ticket Resale Law, the Division of Consumer Affairs in the Department of Law and Public Safety (Division) licenses ticket brokers and regulates those brokers' reselling of tickets for admission to "places of entertainment." N.J.S.A. 56:8-27 to -35.1
In 1997, Governor Whitman appointed the Ticket Brokering Study Commission to assess the efficacy of the Ticket Resale Law and recommend amendments to it. Among other suggestions, the Commission urged the Legislature to eliminate or curtail "the holding back of tickets" from initial sales, so that "the greatest number of tickets will be available to the greatest number of ordinary fans on the initial sale to the public." Ticket Brokering Study Comm'n, Dep't of Consumer Affairs, Ticket Broker Report 19 (Oct. 31, 2001).
Following the Commission's report, the Legislature enacted section 35.1 as a new provision of the Ticket Resale Law and amended the Ticket Resale Law in several other respects. The amendment was signed into law on January 8, 2002. Section 35.1 remained in effect throughout the period relevant to this appeal.
On August 24, 2018, the Legislature amended the Ticket Resale Law in several respects, effective on February 1, 2019. As part of that amendment, the Legislature repealed section 35.1 and two other provisions enacted as part of the 2002 amendments, N.J.S.A. 56:8-35.2 and -35.3. L. 2018, c. 117, § 6.
In February and March 2010, the New Jersey Senate and Assembly passed resolutions urging the NFL to hold the 2014 Super Bowl in New Jersey. Later that year, the NFL announced that the 2014 Super Bowl would be held at MetLife Stadium.
Consistent with its practice in prior Super Bowl games held at stadiums in other states, the NFL did not release the tickets to the 2014 Super Bowl to a ticket broker for a public sale. Instead, it reserved one percent of the tickets for the winners of a lottery conducted in 2013. The remaining ninety-nine percent of the tickets that were not included in the lottery were allocated as follows: five percent of the remaining tickets were shared by the host teams, the New York Giants and the New York Jets; thirty-five percent were shared by the teams that played in the Super Bowl, the Denver Broncos and the Seattle Seahawks; thirty-five percent were distributed to other NFL teams; and twenty-five percent were given to NFL-connected individuals and entities including corporations, broadcast networks, media outlets, sponsors, and the Super Bowl host committee.
In a putative class action complaint filed in the district court, plaintiff and another class representative2 alleged that defendants committed an unlawful practice under section 35.1 by withholding more than five percent of Super Bowl tickets from sale to the general public. Plaintiff contended that some of the tickets allocated to the NFL teams not playing in the Super Bowl were sold to ticket brokers, who in turn sold those tickets on the secondary market at inflated prices. He asserted that, as a result of defendants' violation of section 35.1, the two tickets he purchased on the secondary market were bought at an inflated price: two thousand dollars for each ticket, more than twice each ticket's face value of eight hundred dollars. Plaintiff sought certification of a class including "all persons who paid for, or will pay for, or could not afford to pay for tickets to [the 2014 Super Bowl] in excess of the printed ticket price."
Pursuant to Fed. R. Civ. P. 12(b)(6), the district court granted defendants' motion to dismiss plaintiff's complaint for failure to state a claim. In addition to addressing plaintiff's and the other class representative's standing, plaintiff's claim for unjust enrichment, and the question of causation, the district court found that defendants did not commit an unlawful practice under section 35.1. The court reasoned that because the NFL did not "withhold" tickets as that term is used in section 35.1 and did not release those tickets to the general public, the NFL's method of allocating those tickets did not contravene the statute.
The Third Circuit affirmed in part and reversed in part the district court's decision. Finkelman v. NFL, 810 F.3d 187, 203 (3d Cir. 2016). The circuit court affirmed the determination that the other class representative lacked standing but reversed as to plaintiff, finding that he also lacked standing. The panel therefore dismissed plaintiff's claims without prejudice for lack of subject matter jurisdiction. Ibid.
In an amended complaint, plaintiff expanded his allegation that the NFL violated section 35.1 in its distribution of tickets to the 2014 Super Bowl and supported that allegation with an expert's report. The district court again granted defendants' motion to dismiss for failure to...
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