By Robert J. Romano, JD, LLM, Senior Writer
In March 2021, eleven Personal Seat License (PSL) holders filed suit against the NFL’s Tennessee Titans and Cumberland Stadium, Inc. in the Chancery Court of Tennessee at Nashville. Per their complaint, the plaintiffs sought a declaratory judgment, alleging that the NFL franchise violated Tennessee law by unilaterally changing the terms of their agreed upon PSL contract after labeling them as ‘ticket resellers’. In addition to the request for a declaratory judgment, the plaintiffs alleged five additional causes of action: Breach of Contract and Breach of the Duty of Good Faith and Fair Dealing, Violation of the Tennessee’s Consumer Protection Act (TCPA), Negligent Misrepresentation, Breach of Contract and Breach of the Duty of Good Faith and Fair Dealing (Course-of-dealing), and Promissory Estoppel.
The plaintiffs’ claim that when they initially purchased their individual PSLs, the Titans, through its subsidiary Cumberland Stadium, Inc., made various representations and assertions which ended up not being accurate. These representations included “the right to purchase season tickets at a fair and reasonable rate comparable to similarly situated seats in the stadium, the right to transfer or sell their PSLs, and that they would be treated fairly and reasonably.”[1] The plaintiffs allege that since being classified as ‘ticket resellers’, wherein they resell single-game tickets associated with their PSL instead of using them for their own personal use, the Titans have unilaterally implemented a series of ‘post purchase’ policies that discriminates against them. These policies included (a) increasing the price of their season-ticket packages, and (b) restricting their ability to sell single-game tickets to non PSL holders.
After being served with the plaintiffs’ lawsuit, Tennessee Football and Cumberland Stadium, Inc. didn’t sit idly by the sidelines, but moved quickly to dismiss Counts II through VI of the plaintiffs’ six-count complaint. On October 4, 2021, the Chancery Court of Tennessee, after hearing oral argument, ruled on the defendants’ motion, finding that the plaintiffs’ Negligent Misrepresentation and Promissory Estoppel counts must take a backseat, while allowing the Breach of Contract and Breach of the Duty of Good Faith and Fair Dealing, TCPA, and Breach of Contract and Breach of the Duty of Good Faith and Fair Dealing (Course-of-dealing) counts to move forward.
With regards to the Breach of Contract and Breach of the Duty of Good Faith and Fair Dealing and the Breach of Contract and Breach of the Duty of Good Faith and Fair Dealing (Course-of-Dealing) claims, the plaintiffs’ position was that the Tennessee Titans violated its implied covenant of good faith and fair dealing when it breached the terms of the PSL contract by instituting subsequent, discriminatory practices against the PSL owners it alone deemed to be ‘ticket resellers’.[2] The NFL franchise’s defense was that the plaintiffs cannot allege breach of contract since the terms of the PSL agreements were clear and unambiguous and because of this, they, the plaintiffs, cannot rely on the covenant of good faith and fair dealing to modify the terms of the original contract.
The Chancery Court determined that under Tennessee law, “an implied covenant of good faith and fair dealing is imposed in the performance and enforcement of every contract”,[3] and that, “after a contract is made, it may be modified by express agreement or by conduct that evidences the contracting parties’ consent”.[4] Therefore, based on such, the Court concluded that because the plaintiffs properly alleged that the defendants’ course of conduct modified the terms of their original PSL agreements, and that the implied covenant of good faith and fair dealing is effectively tied to the underlying breach of contract claim, that this was enough for the plaintiffs complaint to survive the defendants’ motion to dismiss.[5]
Regarding the allegation that the Titans violated the TCPA, the Chancery Court determined that in order for the plaintiffs to move forward, they must prove: (a) that the Titans engaged in an unfair or deceptive act, and (b) that this conduct caused an “ascertainable loss of money and/or property”.[6]
The plaintiffs asserted in their complaint that the Titans indicated to them at the time of purchase that the PSLs “had certain characteristics that they did not actually have”, identifying statements made on the Titans’ website regarding season tickets prices associated within specific seating zones at the stadium and that PSL holders could transfer or sell their PSL without incident.[7] The plaintiffs also referenced various statements made by the Titians to the media, such as the “resale of tickets to NFL games is a common and accepted practice,” a 2010 brochure which referenced how to resell PSL seat-tickets, and statements made by a Titian’s employee to a particular plaintiff who encouraged him to buy an additional PSL beyond that PSL’s listed purchase price.[8]
Based upon these allegations, the Chancery Court felt that the plaintiffs adequately demonstrated how the defendants’ engaged in unfair and deceptive acts. This, together with the plaintiffs’ contention that defendants engaged in a practice of what they referred to as ‘targeted inflation of ticket prices’, while at the same time restricting their ability to resell single-game tickets or their PSL, caused the plaintiffs to lose money and therefore was an ascertainable economic damage sufficient for their TCPA claim to withstand the motion to dismiss.
The truth of the matter is that the Tennessee Titans have been trying to find ways to limit the number of opposing fans who attend its home games. During the pre-Covid-19 season of 2019, a large number of Buffalo Bills and Kansas City Chiefs fans were at Nissan Stadium to watch their respective teams and that these ‘away’ fans purchased their tickets from the so-called PSL “ticket resellers’. This, together with the fact that the Titans have recently partnered with Cole Rubin, a Florida ticket broker, to sell single-game tickets after allegations surfaced that the Titans failed to pay taxes for tickets designated as’ military comps’ when they were not, are the just some of the reasons behind why the Tennessee Titans have put into place various policies to ‘drive out’ ‘ticket resellers’. However, the Titans may not have such an easy time in the courtroom as they do on the playing field, and as this case works its way through the court system, we will all have a ringside seat – free of charge.
[1] Greg Carl, et al vs. Tennessee Football Inc. and Cumberland Stadium, Inc. Case No. 21-0252-BC.
[2] Id.
[3] Jones v. BAC Home Loans Servicing, No. W2016-00717-COA-R3-CV, 2017 WL 2972218.
[4] Lancaster v. Ferrell Paving, Inc., 397 S.W.3d 606, 611-12 (Tenn. Ct. App. 2011).
[5] Greg Carl, et al vs. Tennessee Football Inc. and Cumberland Stadium, Inc. Case No. 21-0252-BC.
[6] Audio Visual Artistry v. Tanzer, 403 S.W.3d 789, 809-10 (Tenn. Ct. App. 2012)
[7] Greg Carl, et al vs. Tennessee Football Inc. and Cumberland Stadium, Inc. Case No. 21-0252-BC.
[8] Id.
