Court Favors NCAA in Ticket Distribution Case

Feb 27, 2009

A federal judge has sided with the NCAA in its bid to have a claim brought against it for allegedly employing an illegal ticket distribution scheme moved to its home district, the Southern District of Indiana. Central to the court’s ruling was its belief that a transfer would be more “convenient” for all parties.
In providing the background for the case, the court wrote that the NCAA, for the last decade, has used a ticket distribution system by which it sells tickets to championship tournament games for men’s and women’s basketball and hockey as well as additional sports.
“The system is fairly simple,” wrote the court. “An individual who wishes to purchase tickets to a preliminary round tournament game must pay an up-front service fee of $10 to submit an ‘application’ for tickets (one application per household) in addition to the ticket price. Payment of the service fee and ticket price results in the purchaser’s application being placed into a pool of potential ticket-holders. If the number of tickets requested exceeds the number of tickets available, which is usually the case; the NCAA randomly chooses applications and awards tickets to the individuals who filled those applications. Thus, there is no guarantee that a purchaser will receive the desired tickets. Those purchasers whose applications are not chosen receive a full refund of the money spent on the tickets (sometimes not until several months later), but are not reimbursed the service fee. And of course, those who do receive tickets are not reimbursed the service fee either.”
The court went on to note that the ticket distribution system “is similar for the three Final Four games, but is modified to allow each purchaser to submit up to ten ‘entries,’ at $6 each.
“Thus, the system is set up to incentivize purchasers to spend $60 to purchase ten entries, because doing so increases the chances of being selected for the desired tickets. The catch, however, is that for each entry, the purchaser must again pay the price of the tickets up front, and must do so for each entry even though the purchaser cannot obtain more than one set of tickets. Thus, an individual who desires two tickets to a Final Four game, at $ 150.00 each, must pay $ 306.00 for each entry, or $3,060.00, up front. Again, the purchaser will eventually be reimbursed for all monies spent on tickets she does not receive, but in no event will the purchaser be refunded the entry fee.”
The court wrote that Ticketmaster’s involvement in the alleged lottery scheme began recently. “Ticketmaster was the NCAA’s ticketing agent only for the upcoming 2009 Division I Men’s Basketball Championship. As explained below, the plaintiffs have, in essence, admitted that their claims against Ticketmaster are tenuous at best. As a result, the plaintiffs have agreed to release or not prosecute their various claims in exchange for Ticketmaster’s reimbursement of the service charges to those individuals who did not receive tickets for the upcoming 2009 Division I Men’s Basketball Championship, and for Ticketmaster’s promise to no longer participate in the NCAA’s ticket distribution process.”
Next, the court turned to the NCAA’s motion to transfer the case to the Southern District of Indiana. The court quoted Goodyear Tire & Rubber Co. v. McDonnell Douglas Corp., 820 F. Supp. 503, 506 (C.D. Cal. 1992) concerning the defendant’s burden: “To support a motion for transfer the moving party must show: (1) that venue is proper in the transferor district; (2) that the transferee district is one where the action might have been brought; and (3) that the transfer will serve the convenience of the parties and witnesses and will promote the interest of justice.”
Based on this, “Ticketmaster could hardly argue that it would be unreasonable to require it to litigate in an Indiana court. And with respect to subject matter jurisdiction, the district court in Indiana would have had the power to adjudicate this dispute on the same basis as this Court, namely under the Class Action Fairness Act where there is minimal diversity among the parties. 28 U.S.C. § 1332(d)(2). Thus, the Court focuses its attention on the question of whether the Southern District of Indiana would be a more convenient forum than the Central District of California.”
The court wrote that the Southern District of Indiana “would plainly be a more convenient forum than the Central District of California. The NCAA has identified eight witnesses who possess “significant experience and knowledge concerning the NCAA’s ticket processes,” all of whom are located in Indiana. (Martin Decl. P 6.) By contrast, the plaintiffs merely refer to witnesses who are associated with Ticketmaster and, thus, presumably located in California. The plaintiffs’ failure to produce a witness list suggests that the plaintiffs’ contentions regarding such witnesses are speculative. Moreover, the bulk of relevant evidence in this case will likely come out of Indiana, not California, because Ticketmaster did not become involved in the NCAA’s ticket distribution process until 2008, meaning that the relevant knowledge of Ticketmaster witnesses would likely be limited. The Court also is not persuaded by the plaintiffs’ conclusory assertions that the District Court for the Southern District of Indiana would lack the ability to compel Ticketmaster’s testimony. Plaintiffs likewise do not sufficiently explain how or why they would be inconvenienced if the District Court for the Southern District of Indiana were to oversee the class action settlement with Ticketmaster.
“In addition, the proposed class action settlement agreement between the plaintiffs and Ticketmaster confirms that the focal point of the plaintiffs’ suit is the NCAA’s design and implementation of the allegedly illegal ticked distribution scheme. (See Mot. Prelim. App., Ex. A [Settlement Agreement] at 2-3.) As the plaintiffs themselves admit, Ticketmaster has played a ‘short and limited role in the challenged practice.’ (Id. at 3.) Furthermore, once the proposed settlement agreement is finalized and Ticketmaster is dismissed from this lawsuit, the plaintiffs’ suit will no longer implicate California law because the plaintiffs’ sole California claim was their section 17200 claim, which they asserted only against Ticketmaster. All that will remain will be a nationwide class action lawsuit brought by residents of Arizona, Oregon, and New York against an unincorporated association that has its principal place of business in Indiana, and involving claims arising under Indiana statutory and common law. Thus, as a matter of public policy, the Southern District of Indiana has a much stronger interest in adjudicating this action than does this Court.”
George et al. v. Nat’l Collegiate Athletic Ass’n et al.; C.D. Cal.; Case No. CV 08-03401 GAF (AGRx), 2008 U.S. Dist. LEXIS 106049; 12/17/08


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