Seventh Circuit Disposes of Class Action Lawsuit Involving U.S. Grand Prix

Jun 22, 2007

The 7th U.S. Circuit Court of Appeals has denied an appeal of a summary judgment ruling from a group of plaintiffs, who claimed they were entitled to damages after witnessing an automobile race in which a majority of the teams competing in the event withdrew at the last minute.
In affirming the dismissal of the breach of contract claim, the court concluded that the Indianapolis Motor Speedway Corporation (IMS), which hosted the event, sold tickets to the plaintiffs for purposes of admitting them to the grounds “to view whatever event transpires,” no matter how diminished the plaintiffs might perceive it to be.
The court also affirmed dismissal of the Promissory Estoppel claim, which centered on the plaintiff’s contention that FIA (Formula One’s governing body) promised that at least 20 cars would race, finding that the plaintiffs “cannot seriously contend” that the defendants had promised 20 cars would race.
The event that led to the suit occurred on June 19, 2005. Leading up to the race, several teams complained that the layout of the track was leading to tire failures and could subsequently lead to crashes in practice and during the race. When no solution was reached, the cars took the formation lap on race day, before leaving the track to enter the pits. This left six cars to compete in an uneventful race before more than 100,000 very frustrated fans. Some of the fans sued.
The litigation was consolidated into federal court, where a district judge ultimately dismissed the lawsuit for failure to state a claim.
On appeal, the plaintiffs argued that the IMS and other defendants promised a “regulation” race that included at least 12 cars in exchange for the ticket price. As mentioned above, the court found that the IMS’ only obligation was to admit spectators to the grounds. Castillo v. Tyson, 701 N.Y.S.2d 423, 423 (N.Y. App. Div. 2003); see
also Petrich v. MCY Music World, Inc., 862 N.E.2d 1171, 1180 (Ill. App. Ct. 2007); Yarde Metals, Inc. v. New England Patriots Ltd. P’ship, 834 N.E.2d 1233, 1236 (Mass. App. Ct. 2005); Sweeny v. United Artists Theater Circuit, Inc., 119 P.3d 538, 540-41 (Colo. Ct. App. 2005); Six Flags Theme Parks, Inc. v. Dir. of Revenue, 102 S.W.3d 526, 533 (Mo. 2003); Wichita State Univ. Intercollegiate Athletic Ass’n v. Marrs, 28 P.3d 401, 403 (Kan. Ct. App. 2001). But see Miami Dolphins, Ltd. v. Genden & Bach, P.A., 545 So.2d 294, 296 (Fla. Dist. Ct. App. 1989) (holding that a provision of a season ticket agreement requiring a refund when games were cancelled due to labor strikes was triggered when a football team played a game using strikebreakers).
“The plaintiffs provide us no reason not to construe their tickets this way. While one could contract to provide a spectacle, one wonders why an exhibitor like IMS would do so, given that it has control over its grounds but not over the performers and their scheduled performances,” wrote the court.
In another interesting claim, the plaintiffs argued that promissory estoppel binds the defendants to pay them their expenses for traveling to see the 2005 USGP (They had already been refunded their ticket price by Michelin).
“This claim must fail because no reasonable promoter or racing fan would have regarded a race’s ‘advertising and promotion’ concerning the number of cars scheduled to roll as a promise upon which someone could reasonably rely,” wrote the court.
The IMS was represented by Mark Richards of Ice Miller in Indianapolis.
Larry Bowers et al. v. Federation Internationale de L’Automobile et al.; 7th Cir.; No. 06-2718; 5/25/07


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