People v. Concert Connection, Ltd.

• Decision Date: 22 May 1995
• Citation: 629 N.Y.S.2d 254,211 A.D.2d 310
• Parties: PEOPLE of State of New York, etc., Respondent, v. The CONCERT CONNECTION, LTD., and Jason Berger, Appellants.
• Court: New York Supreme Court — Appellate Division

Page 254

629 N.Y.S.2d 254

211 A.D.2d 310

PEOPLE of State of New York, etc., Respondent, v. The CONCERT CONNECTION, LTD., and Jason Berger, Appellants.

Supreme Court, Appellate Division Second Department.

May 22, 1995.

Davidoff & Malito, New York City (Matthew Feigenbaum and Joan M. Schmidt, of counsel), for appellants.

Dennis C. Vacco, Atty. Gen., New York City (Gary Brown, of counsel), for respondent.

Before MANGANO, P.J., and SULLIVAN, BALLETTA and MILLER, JJ.

BALLETTA, Justice.

"Ticket scalping" is the common name given to the practice of selling tickets to popular entertainment events at prices which greatly exceed the established price for those tickets. Considered to be a major source of "fraud, extortion, exorbitant rates and similar abuses" (Arts and Cultural Affairs Law § 25.01), ticket scalping has long been regulated by statute in this State (see, L.1922, ch. 590, § 1). Those regulations, now embodied in Arts and Cultural Affairs Law article 25, are currently being challenged by the out-of-State appellants, who argue, essentially, that since they are not present in New York, they should not be subject to New York ticket resale regulations and, further, that such regulations unconstitutionally violate their right to scalp tickets. We disagree and find that the statute was properly applied to the appellants.

Jason Berger is the president of The Concert Connection, Ltd. (hereinafter The Concert Connection), a Connecticut corporation, having its principal place of business in Greenwich, Connecticut. The Concert Connection is engaged in the business of reselling entertainment tickets, including tickets for events at numerous places of entertainment located in New York State. As part of its activities, The Concert Connection advertises in New York newspapers and maintains two New York telephone numbers.

Arts and Cultural Affairs Law § 25.07(2) makes it "unlawful for any person, firm or corporation to resell or offer to resell any ticket to any place of entertainment for more than the maximum premium price". The maximum premium price is defined as the established printed price plus the greater of five dollars or 10% of the established printed price and any lawful taxes (Arts and Cultural Affairs Law § 25.03[4].

Executive Law § 63(12) empowers the Attorney-General to seek an injunction, restitution, and damages against any person who engages in repeated illegal acts. The statute defines "repeated" conduct as the "repetition of any separate and distinct fraudulent or illegal act, or conduct which affects more than one person" (Executive Law § 63[12].

The Attorney-General's office investigated the activities of The Concert Connection and documented, through transcripts of telephone conversations and affidavits, that The Concert Connection did, on at least three separate occasions, resell tickets for entertainment events taking place in New York to two different individuals, who were both located in New York, for prices far in excess of the maximum premium price. For instance, $20 tickets for the 1992 United States Tennis Open were resold by The Concert Connection for prices between $100 and $300; $15 tickets to New York Yankee baseball games were resold for $45; and $22 to $30 tickets for concerts at metropolitan arenas were resold for prices of $65 to $300. Based upon these repeated illegal acts, the Attorney-General commenced the instant proceeding in the Supreme Court, Westchester County, to enjoin The Concert Connection and Jason Berger from continuing the illegal "ticket scalping", to require the appellants to pay restitution and damages to eligible consumers, and to award the State $2,000 costs against each appellant.

The Supreme Court determined that there were no triable issues of fact, denied the appellants' cross motion to dismiss the petition, and granted the petition in its entirety. We now affirm the order and judgment of the Supreme Court.

I

On appeal, The Concert Connection and Jason Berger assert that the court lacked a proper basis for exercising personal jurisdiction over them since neither one is a resident of New York State for jurisdictional purposes.

As a general rule, in order for the courts of one State to exercise personal jurisdiction over an individual or corporation located in another State, constitutional due process requires that there be sufficient minimum contacts between that individual or corporation and the forum State such that the latter's assertion of jurisdiction will not offend "traditional notions of fair play and substantial justice" (International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95). The underlying rationale for the "minimum contacts" standard is to protect a defendant from having to litigate in a distant forum and to prevent the individual States from overreaching the judicial limits appropriate to "their status as coequal sovereigns" (World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 564, 62 L.Ed.2d 490). Accordingly, personal jurisdiction may be had over a defendant when his "conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there" (World-Wide Volkswagen Corp. v. Woodson, supra, at 297, 100 S.Ct. at 567). In this regard, a person who "purposefully avails [himself] of the privilege of conducting activities within the forum State" should be able to reasonably foresee being subjected to jurisdiction there (World-Wide Volkswagen Corp. v. Woodson, supra, at 297, 100 S.Ct. at 567, quoting from Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283).

The individual States have enacted a wide variety of so-called "long-arm" statutes to empower their courts to exercise personal jurisdiction over non-domiciliaries. These statutes may seek to extend the State's jurisdiction to its constitutional limits, as mentioned above, or they may stop at some point short of the full reach of those limits.

In 1979, the New York State Legislature amended New York's own long-arm statute in order to permit the courts in this State to exercise personal jurisdiction over a non-domiciliary who "contracts anywhere to supply goods or services in the State" (CPLR 302[a][1]. The legislative intent was "to abrogate the 'mere shipment' rule established by prior case law (see, e.g., Kramer v. Vogl, 17 N.Y.2d 27, 267 N.Y.S.2d 900, 215 N.E.2d 159) and * * * to extend New York long-arm jurisdiction to its constitutional limits" (Island Wholesale Wood Supplies, Inc. v. Blanchard Inds., 101 A.D.2d 878, 879, 476 N.Y.S.2d 192). Under prior case law, personal jurisdiction did "not extend to nondomiciliaries who merely ship[ped] goods into the State without ever crossing its borders" (McGowan v. Smith, 52 N.Y.2d 268, 271, 437 N.Y.S.2d 643, 419 N.E.2d 321). However, the amended CPLR 302(a)(1):

"is a 'single act statute ' and proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted" (Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 522 N.E.2d 40 [emphasis added].

In this case, The Concert Connection contracted, via telephone, to resell tickets to New York residents and thereafter shipped those tickets into New York to those residents. Although the contract was arguably made in Connecticut since the corporate employee was on the telephone in the appellants' Connecticut office (see, e.g., Greenberg v. R.S.P., 22 A.D.2d 690, 253 N.Y.S.2d 344), this fact does not preclude the exercise of New York's long-arm jurisdiction over the appellants since the statute specifically covers "contracts anywhere to supply goods or services in the State" (CPLR 302[a][1]. Thus, when The Concert Connection contracted to send the tickets to purchasers located in New York, it was subjecting itself to personal jurisdiction in New York for any cause of action that arose out of those contracts (see, Drake Am. Corp. v. Speakman Co., 144 A.D.2d 529, 530, 534 N.Y.S.2d 679; see also, Anderson Dev. Corp. v. Isoreg Corp., 154 A.D.2d 859, 860, 546 N.Y.S.2d 720; Island Wholesale Wood Supplies, Inc. v. Blanchard Inds., supra ).

Moreover, The Concert Connection purposefully availed itself of business opportunities in New York (see, Hanson v. Denckla, supra ) by advertising in New York newspapers, maintaining two New York telephone numbers, reselling tickets for New York events to New York residents, and actually shipping those tickets into New York. These acts are clearly sufficient to establish the minimum contacts with this State necessary to satisfy the constitutional due process requirements (see, Anderson Dev. Corp. v. Isoreg Corp., supra ) as well as to place The Concert Connection squarely within the reach of this State's long-arm statute.

There can be no doubt that the conduct engaged in by the appellants violated the New York statute prohibiting the reselling of tickets for more than the maximum premium price (see, Arts and Cultural Affairs Law § 25.07). Since the tickets that The Concert Connection sold and shipped to New York residents were sold for prices clearly in excess of the maximum premium price, it is clear that the causes of action set forth in the petition of the Attorney-General arose out of the contracts to resell the tickets.

Furthermore, the Supreme Court properly concluded that it had personal jurisdiction over the individual appellant Jason Berger. In Kreutter v. McFadden Oil Corp. (71 N.Y.2d 460, 468, 527 N.Y.S.2d 195, 522 N.E.2d 40, supra ), the Court of Appeals rejected the application of the fiduciary shield doctrine to CPLR 302(a)(1). "Nothing in the statute's language or the legislative history relating to it suggests that the Legislature intended to accord any special treatment to fiduciaries acting on behalf...