By Carla Varriale
The putative class action lawsuit filed by a disgruntled consumer, Marilyn Sweet, against the Colorado Rockies Baseball Club, Ltd. (“the Rockies”) in the Colorado Federal Court (“the Sweet Class Action”) may not remain in federal court. The Colorado Federal Court has requested that the parties demonstrate whether the Court has, or should decline to exercise, jurisdiction over the Sweet Class Action.
The Sweet Class Action posits that the Rockies have an exclusive arrangement with online secondary ticketing mammoth www.StubHub.com (“StubHub) that violates Colorado’s consumer protection law, the Colorado Consumer Protection Act (“CCPA”). The CCPA was initially enacted by the Colorado General Assembly in 1969 to protect Colorado citizens from anti-consumer practices employed by dance studios, telemarketers and other businesses. The CCPA was amended in 2008 with respect to entertainment ticket sales. Section 6-1-718 (3) (a) (IV) of the CCPA provides, in part, that it is void as against public policy to apply a term or condition to the original sale to the purchaser to limit the terms or conditions of resale, including, but not limited to, a term or condition that imposes a sanction on the purchaser if the sale of the ticket is not through a seller approved by the operator A“ticket” is defined by the CCPA to include a license issued by the operator of a place of entertainment (such as a stadium) for admission to an event at the date and time specified on the ticket, subject to the terms and conditions as specified by the operator.
According to the Sweet Class Action, consumers, such as the plaintiff, who want to resell their tickets or purchase resold tickets are compelled to use StubHub (and pay its fees, which are purportedly shared with the Rockies). This arrangement purportedly imposes a term or condition to the original ticket sale upon the purchaser that violates the CCPA and scuttles both personal preference and an opportunity for profit maximization. Moreover, according to the Sweet Class Action, the purchaser risks a sanction[1] if the purchase or sale of the ticket is not in a manner approved by the Rockies. The sanction could be as severe as invalidation of the ticket license and expulsion from the Stadium. The Sweet Class Action seeks an order certifying a class action lawsuit, an injunction preventing the Rockies’ alleged imposition of unlawful restrictions on the resale of tickets to its baseball games, actual damages and reasonable attorneys’ fees, among other things.
The Colorado Federal Court initiated the jurisdiction motion pursuant to 28 U.S.C. Section 1332 (d) (3) or (4). Among the factors the Colorado Federal Court will examine with respect to the motion are whether the number of citizens of the forum state of Colorado is substantially larger than the number of citizens of from any other state, whether the claims involve matters of national or interstate interest and whether the action was brought in a forum with a distinct nexus with the class members, the alleged harm, or the defendants.
In response, the plaintiff claimed that the prohibition against exercising jurisdiction because more than two-thirds of the proposed class reside in Colorado is not supported by the initial data. The plaintiff noted that over one-third of the putative class members “may” hold citizenship in states other than Colorado. Moreover, the plaintiff argued that the putative class includes all ticketholders over a four year period and involves residents of states other than Colorado, given its proximity to states that do not have a professional baseball team and the “travelling nature of baseball fans.”[2] The plaintiff further contended that the Sweet Class Action “raises complex issues of fact and law that have commercial implications reaching well beyond the state’s borders.”[3] Noting that the litigation could have potential impact on StubHub and Major League Baseball franchises, the plaintiff argued that the interests of several states are implicated so that the Colorado Federal Court should have an interest in hearing the dispute. The plaintiff has further alleged it is a case of first impression and warrants the involvement of an experienced federal jurist. As such, the plaintiff has argued that the Court has jurisdiction over the Sweet Class Action and that there are grounds for the Colorado Federal Court to exercise its discretionary jurisdiction. Whether the Colorado Federal Court does so, or whether the case will be heard in state court, will be closely watched.
Carla Varriale is a partner at Havkins Rosenfeld Ritzert and Varriale, LLP (“HRRV”) in New York. Her practice focuses on the representation of sports and recreational venues. She can be reached at carla.varriale@hrrvlaw.com
[1] The Colorado Rockies home game ticket restricts resale via the Internet or any other interactive media except for the Rockies’ official website (the authorized is allegedly owned and operated by Stub Hub) at risk of invalidating the license granted by the ticket.
[2] See, Plaintiff’s Response to Order to Show Cause Regarding Jurisdiction, filed September 11, 2013.
[3] See, Plaintiff’s Response to Order to Show Cause Regarding Jurisdiction, filed September 11, 2013.
