By Nicholas P. Smith, MA & Michael S Carroll, PhD
Major League Baseball (MLB) has petitioned a California Court to dismiss a lawsuit claiming fans would not be able to receive refunds due to the COVID-19 pandemic that has affected professional sports in the United States and across the globe. Matthew Ajzenman and Susan Terry-Blazer, two New York baseball fans, purchased books of MLB tickets for the 2020 season totaling approximately $2,656. The two plaintiffs purchased from Sterling Doubleday Enterprises LP and Mets Partners Inc. (Ajzenman) and Ticketmaster (Terry-Blazer). The class action lawsuit was originally filed in in the U.S. District Court of Los Angles in April of 2020, after MLB told teams to list games not played as postponed rather than canceled. By rule, postponements are not awarded refunds for games that are still to be played. The league instead advises fans to hold on to tickets and await the decision at a later date. The complaint alleges that an estimated $1 billion in consumer capital is tied up in tickets to games that may or may not be played, due to the pandemic. The complaint cites that other businesses across the country have acted lawfully and ethically in providing refunds to consumers, sometimes at the risk of bankruptcy, yet MLB refuses to “do right by its fans” (Matthew Ajzenman et al v. Office of the Commissioner of Baseball et al, 2020, p. 2). The lawsuit asserts five separate claims for relief:
Defendants’ conduct constitutes violations under California’s Legal Remedies Act, Cal. Civ. Code § 1750, (CLRA) through misrepresentation, in that the representations regarding that the 2020 MLB regular season will be played is false and misleading.
Defendants’ conduct constitutes unfair business acts or practices under California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, as the retention of plaintiffs’ ticket payments is outweighed by the economic harm that is places upon those consumers.
Defendants’ conduct violates California’s Consumer Legal Remedies Act, Cal. Civ. Code § 1750, as class members have suffered an injury-in-fact by way of lost assets.
Defendants’ conduct represents a civil conspiracy in that they coordinated together to prop up a pretext of “postponed” games in order to avoid issuing refunds to consumers. This coordination and cooperation represented a conspiracy to violate California consumer and other laws, which continues to cause plaintiffs and class members harm.
Defendants’ conduct represents unjust enrichment at the expense of plaintiffs and class members.
The lawsuit essentially seeks the equitable remedy of refunds for all class members for the 2020 MLB season. Major League Baseball has since started operations and played games in every home market except the Toronto Blue Jays, who are playing their home games at Sahlen Field, the AAA home of the Buffalo Bisons (“Blue Jays set 2020 schedule,” 2020). Some MLB teams have offered their patrons choices of full refund or credits for the 2021 season. The Miami Marlins have offered fans a 10% bonus on credit for 2021 ticket plans (Jenkins, T., personal communication, July 15, 2020). A 3% ballpark credit based on 2021 memberships is also being offered at Marlins Park. Eight plaintiffs were named in the suit, five of them having purchased tickets through the league or its teams. MLB began a shortened 60-game season in late July, without the presence of fans.
The lawsuit involves claims from members of the plaintiff class against Ticketmaster and Stubhub, both of whom are league ticket partners. Stubhub and Ticketmaster petitioned the court to throw out the lawsuit as well, claiming that there was no fraud involved nor was there any violation of California consumer protection law, arguing that that game tickets were neither goods nor services under the California Consumer Legal Remedies Act, and that the company made no actual misrepresentations to consumers, as MLB was not clear on whether games would be played.
The law firm representing the complaint has asked for official documents, including profits and losses and projections from ticket sales on the 2020 season. The law firm also seeks documents to ascertain how each MLB teams plan to invest, retain, or spend those profits. Representatives from Stubhub, Ticketmaster, and MLB have petitioned the California Court to put those document requests on hold, pending a decision to throw out the suit entirely.
On September 15, 2020, U.S. District Judge Dale Fischer ruled that the five fans that had purchased their tickets directly from MLB or MLB teams could not bring their claims against Ticketmaster, its parent company Live Nation Entertainment Inc., StubHub Inc., or its subsidiary Last Minute Transactions Inc. The federal judge also ruled that the dispute would have to be moved to arbitration, as fans that used the companies’ websites entered into arbitration agreements when they did so. In his ruling, the judge found that the plaintiffs had failed to sufficiently allege that a conspiracy existed between MLB, its teams, and ticket sellers (e.g., StubHub), as most of the allegations were vague in nature. The judge noted that neither Ticketmaster nor StubHub had the power to cancel baseball games and that the decision rested solely with MLB, the commissioner, and team defendants.
MLB filed its own motion to dismiss in late July, arguing that refunds or credits had been issued in the case, thus making it moot. StubHub has faced at least one other proposed class action from consumers over changes made to its guaranteed ticket refund policy amid a torrid of cancellations of live events due to the COVID-19 pandemic.
References
Blue Jays set 2020 schedule, first game in Buffalo is August 11. (July 26, 2020) Retrieved from https://www.milb.com/buffalo/news/blue-jays-2020-home-schedule
Matthew Ajzenman et al v. Office of the Commissioner of Baseball et al., Case No. 2:20-cv-03643 (2020). Retrieved from: https://images.law.com/contrib/content/uploads/documents/403/49260/MLB-refund-lawsuit-complaint.pdf
Shaikin, B. (2020) Major League Baseball asks court to throw out ticket refund lawsuit. Los Angeles Times. Retrieved August 24, 2020 from https://www.latimes.com/sports/story/2020-07-30/mlb-ticket-refund-lawsuit-coronavirus-stub-hub-ticketmaster
Nicholas P. Smith is an Assistant Teaching Professor of Sport Management at Florida International University in the Department of Counseling, Recreation, and School Psychology. He is also a doctoral student in Sport Management at Troy University. He has over a decade of experience in various management positions with ASM Global formally SMG / Mercedes Benz Superdome / Smoothie King Center / Champions Square, University of New Orleans Athletics, New Orleans Babycakes, and Landmark Event Staffing Services.
Michael S. Carroll is an Associate Professor of Sport Management at Troy University specializing in research related to sport law and risk management in sport and recreation. He serves as Online Program Coordinator for Undergraduate, Graduate, and Doctoral Programs in Sport Management with Troy University. He lives in Orlando, FL.
