Hill v. Stubhub, Inc.
| Decision Date | 06 March 2012 |
| Docket Number | No. COA11–685.,COA11–685. |
| Citation | 727 S.E.2d 550 |
| Parties | Jeffrey A. and Lisa S. HILL, individually and on behalf of all others similarly situated, Plaintiffs v. STUBHUB, INC. d/b/a “StubHub!” and/or “stubhub.com”, Justin Holohan, and “John Doe Sellers 2” et. al., Defendants. |
| Court | North Carolina Court of Appeals |
OPINION TEXT STARTS HERE
Appeal by defendant from judgment entered 4 March 2011 by Judge Ben F. Tennille in Guilford County Superior Court. Heard in the Court of Appeals 4 December 2011.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Jeffrey E. Oleynik, Greensboro, and Charles E. Coble, Raleigh, and the Law Offices of Jeffrey K. Peraldo, PA, by Kara W. Edmunds, Greensboro, and Jeffrey K. Peraldo for Plaintiffs Jeffrey A. and Lisa S. Hill.
K & L Gates, LLP, Charlotte, by John H. Culver III, and Molly L. McIntosh; Weil, Gotshal & Manges LLP, New York, by David J. Lender; and Cooley Godward Kronish LLP, by Michael G. Rhodes, for Defendant StubHub, Inc.
Wilmer Cutler Pickering Hale & Dorr LLP, Washington, by Patrick J. Carome, Samir Jain, Daniel P. Kearney, Jr., and Womble Carlyle Sandridge & Rice, PLLC, Raleigh, by Burley B. Mitchell, Jr., and Robert T. Numbers II, for Amicus Curiae Center for Democracy & Technology; Computer & Communications Industry Association; Consumer Electronics Association; Ebay, Inc.; Electronic Frontier Foundation; Internet Commerce Coalition; NetChoice; NetCoalition; Public Knowledge; TechAmerica; and TechNet.
Defendant StubHub appeals from an order granting summary judgment in favor of Plaintiffs Jeffrey A. and Lisa S. Hill with respect to their claim that Defendant engaged in unfair or deceptive trade practices by violating the provisions of N.C. Gen.Stat. § 14–344. On appeal, Defendant argues that Plaintiffs' “ticket scalping” claim is barred by 47 U.S.C. § 230 and that Defendant did not violate the “fee” provisions of N.C. Gen.Stat. § 14–344. After careful consideration of Defendant's challenges to the trial court's order in light of the record and the applicable law, we conclude that the trial court's order should be reversed.
Defendant operates an online marketplace that enables third parties to buy and sell tickets to sporting contests, concerts, and similar events. Among other things, Defendant serves as an intermediary between buyers and sellers in order to facilitate transactions in which the identities of the buyer and the seller are not disclosed to each other. As part of that process, sellers are provided with prepaid FedEx™ labels for shipping tickets; a guarantee of payment even if the buyer uses an invalid or fraudulent credit card; and the assurance that Defendant will assist in resolving any customer service issues that might arise. On the other hand, buyers are assured that they will receive valid tickets, or tickets of the same or equal value, in a timely manner.
In order to consummate a transaction using Defendant's website, a person must first create a user account, a process that requires the person to provide personal information and agree to abide by the terms and conditions set out in a User Agreement. The User Agreement requires the user to agree to refrain from “us[ing] this Site for unlawful purposes or in an unlawful manner” and “to comply with all applicable local, state[,] federal and international laws, statutes and regulations regarding use of the Site and the selling of tickets,” including regulations governing the “selling value of the tickets.” 1
In the event that a ticket sale occurs, Defendant charges both parties for its services, with 10% of the ticket price deducted from the proceeds that would otherwise be payable to the seller and 15% of the ticket price, plus a shipping fee, added to the buyer's total cost. Defendant calculates the total amount due and provides the buyer with that information, processes the buyer's payment, and remits the amount at which the ticket sold, less Defendant's fee, to the seller. As a result, the seller does not receive the buyer's credit card information and the buyer does not learn the identity of the seller.
In September, 2007, Plaintiffs decided to buy tickets to a “Miley Cyrus as Hannah Montana” concert to be held at the Greensboro Coliseum in November, 2007. After unsuccessfully attempting to purchase tickets to this event using the Coliseum's website, Ms. Hill purchased four tickets to the concert through Defendant's website for $149.00 each. In addition to the aggregate ticket price, Plaintiffs paid a shipping charge of $11.95 and a fee for Defendant's services of $59.60, increasing the total amount of her order to $667.55. Tickets to the Hannah Montana concert had a face value of $56.00 apiece.
The tickets that Ms. Hill purchased were sold by Justin Holohan, an accountant living in Massachusetts who had sold hundreds of tickets using Defendant's website. Mr. Holohan owned the tickets in question and selected the sale price. Mr. Holohan did not remember if he used any pricing information function available through Defendant's website to arrive at the price he selected for the tickets purchased by Ms. Hill.
At the time that he registered to use Defendant's website, Mr. Holohan provided various items of personal information and agreed to abide by Defendant's User Agreement. In the event that a prospective buyer offered to purchase a ticket that Mr. Holohan had listed on Defendant's website, he would receive an email from Defendant asking if he wanted to accept the offer. If Mr. Holohan accepted the buyer's offer, he would print out a prepaid FedEx™ label and use that label to ship the tickets to the purchaser. Defendant functioned as an intermediary between the purchasers and Mr. Holohan, collected credit card information from buyers, and provided him with a marketplace in which he could sell tickets “to an anonymous party.”
On 17 October 2007, Plaintiffs filed a complaint, both individually and as representatives of a proposed class consisting of “all others similarly situated,” against Defendant; “John Doe Seller 1,” the individual who sold the Hannah Montana tickets to Ms. Hill; and “John Doe Sellers 2,” other sellers of tickets using Defendant's website. In their complaint, which was subsequently amended on two occasions to assert additional factual allegations concerning the manner in which Defendant's website operated and to substitute Mr. Holohan for “John Doe Seller 1,” Plaintiffs alleged that they had purchased four tickets to the Hannah Montana concert at substantially in excess of face value and that the Defendant's fee exceeded $3.00 per ticket. As a result, Plaintiffs claimed that they were entitled to recover compensatory and punitive damages based upon Defendant's alleged violation of N.C. Gen.Stat. § 14–344, a statute making it unlawful to sell a ticket for more than $3.00 over its face value; Defendant's decision, along with the other defendants, to participate in a civil conspiracy to violate N.C. Gen.Stat. § 14–344; tortious action in concert by Defendant and the other defendants; and the fact that Defendant had allegedly engaged in an unfair and deceptive trade practice in violation of N.C. Gen.Stat. § 75–1.1.
On 21 April 2008, Defendant moved for dismissal of Plaintiffs' complaint pursuant to N.C. Gen.Stat. § 1A–1, Rule 12(b)(6) on the grounds that “Section 230 of the Communications Decency Act (47 U.S.C. § 230) preempts the application of state law and provides a complete immunity to Plaintiffs' claims.” On 21 July 2008, the trial court entered an order dismissing all of Plaintiffs' claims except for their unfair and deceptive trade practices claim.
On 3 September 2008, Defendant filed an answer to Plaintiffs' complaint in which it denied the material allegations set out in that pleading and asserted various affirmative defenses, including a contention that Plaintiffs' claim was barred by 47 U.S.C. § 230. On 25 October 2010, Plaintiffs filed a motion for summary judgment. On 4 March 2011, the trial court entered an order determining that Defendant was not entitled to immunity from liability pursuant to 47 U.S.C. § 230, that Defendant had violated N.C. Gen.Stat. § 14–344, that Defendant's conduct constituted an unfair and deceptive trade practice, and that Plaintiffs were entitled to judgment in their favor in an undetermined amount with respect to the individual claims that they had lodged against Defendant pursuant to N.C. Gen.Stat. § 75–1.1. Defendants noted an appeal to this Court from the trial court's order.
According to N.C. Gen.Stat. § 1A–1, Rule 54(a), a “judgment is either interlocutory or the final determination of the rights of the parties.” “An interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy.” (Veazey v. Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381,reh'g denied,232 N.C. 744, 59 S.E.2d 429 (1950)). Given that the trial court's order granted summary judgment in favor of Plaintiffs with respect to their individual claims without making a specific damage award or addressing Plaintiffs' request for class certification, the order from which Defendant has attempted to appeal is clearly interlocutory in nature.
As a general proposition, “there is no right of immediate appeal from interlocutory orders and judgments.” Travco Hotels v. Piedmont Natural Gas Co., 332 N.C. 288, 291, 420 S.E.2d 426, 428 (1992) (citing Goldston v. American Motors Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990)). However, immediate appellate review of an interlocutory order is available “when the trial court enters a final judgment as to one or more, but fewer than all, claims or parties and certifies that there is no just reason for delay” pursuant to N.C. Gen.Stat. § 1A–1, Rule 54(b) or when “the interlocutory order affects a substantial...
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