By Jeff Birren
According to the cynic Jacques in Shakespeare’s As You Like It:
“All the world’s a stage, And all the men and women merely players.” But according to the Third Circuit, all the men and women do not have standing to sue the NFL because they were unable to buy face value tickets to the Super Bowl in the New Jersey Meadowlands in 2014.
The Super Bowl has grown by leaps and bounds since the first game held at the Los Angeles Coliseum back in 1967. At the time it was not even known as the Super Bowl and today it is an unofficial national holiday. Cities are eager to spend millions to host the event and unlike the championships in baseball, basketball and hockey, the site is selected years in advance without regard to which teams might be participating in the game. Game tickets are snapped out with out regard to price, as are local hotel rooms, flights and meals. As the Third Circuit noted: “The Super Bowl is perhaps the ultimate example of an event where demand for tickets exceeds supply,” (Finkelman v. NFL, No. 15-1435, (U.S.C.A., Third Circuit, January 14, 2016)).
Mr. Finkelman desired to attend the game, as did Ben Hoch-Parker. Neither entered the NFL ticket lottery. Finkelman bought tickets from a scalper, allegedly for more than face value. Hoch-Parker did nothing. After the game was played, they filed a putative class action against the NFL, alleging that the NFL’s traditional practice of allotting tickets to the participants, the other NFL teams, the League Office, broadcasters and sponsors violated a New Jersey statute concerning the sale of tickets to the public. Finkelman also damages for unjust enrichment.
The District Court dismissed the case. It held that the NFL did not “withhold” tickets from the public but all were distributed according to its regular practice and the specific New Jersey statute only applied to tickets to be sold to the general public.
It held that Finkelman had failed to prove causation because he had not entered the NFL ticket lottery, and thus failed to use every mechanism to avoid his loss. Moreover, he failed to prove causation because he might have purchased the tickets from a lottery winner who bought the tickets at face value, and therefore it would be hard to blame the NFL. It held that Hoch-Parker failed to prove standing because he never bought tickets. Finally, it held that they had failed to prove unjust enrichments because the relationship between the plaintiffs and the NFL was too remote or attenuated.
The Third Circuit focused solely on the issue of Article III standing, or in this case, the lack of standing by either plaintiff, and ordered supplemental briefing on that sole issue. The Court laid out the test and noted that the burden is on the plaintiff(s) to prove standing. The plaintiffs must plead the elements of standing, the Court then eliminates allegations that are mere conclusions, and if there are well-pleaded factual allegations, the Court assumes that those allegations are truthful, but then looks to see if facts as pled affirmatively and plausibly suggest that it has standing to sue.
The Court then examined the two plaintiffs. It quickly determined that Hoch-Parker “lacks Article III standing because he never purchased a ticket to the Super Bowl, meaning no out-of-pocket loss and, in the District Court’s view, no injury in fact. This is plainly correct” (Id. at 4). Apparently aware of the thin nature of his claim, Hoch-Parker tried to recast his claim as one for “lost opportunity.” That, too, failed. The Court was well aware that “[d]emand for Super Bowl tickets was so great that Hoch-Parker might have been unable to obtain tickets at his preferred prices even if the NFL had made all tickets to the Super Bowl available to members of the general public,” (Id.). The Court said it “was not a hard call” and that If his theory of standing was correct, “everyone who contemplated buying a Super Bowl tickets but decided against it would have standing to bring a claim under the Ticket Law. Article III standing is simply not that expansive,” (Id. at 4/5).
The Court came to the same conclusion for Finkelman, though it took more time with its analysis. He stated class was for “all persons who paid for tickets to Super Bowl XLVIII in excess of the printed ticket price.” Finkelman’s first theory is that NFL misconduct prevented him from purchasing a ticket. However, he never entered the ticket lottery but purchased it on the secondary market. “As a result, there was always a zero percent chance that he could procure a face-value ticket. In this sense, any harm that Finkelman suffered is properly attributed not to the NFL, but rather to his own decision not to enter the ticket lottery,” (Id. at 5). The NFL’s purported misconduct was simply not the “but for” cause of Finkelman’s injury.
The Court further stated that any “other conclusion is untenable. Were we to adopt Finkelman’s view of standing, anyone who bought a Super Bowl ticket from a reseller could sue the NFL to recover three-times the difference between the purchase price and face price,” (Id. at 6).
Finkelman’s second theory was to claim that the but for the NFL’s alleged wrong doing, Finkelman paid a higher price than he would have done had tickets not been withheld. This theory was equally infirm. By selling more tickets to NFL insiders—that is, the Clubs of the NFL and their players, under Finkelman’s theory more tickets hit the secondary market, and under simple supply and demand principles, that would decrease the price on the secondary market, not increase it. Moreover, there is not way of knowing whether this plan “would have had the effect of increasing or decreasing prices on the secondary market. We can only speculate—and speculation is not enough to sustain Article III standing,” (Id. at 7). “It is pure conjecture about what the ticket resale market might have looked like if the NFL had sold tickets differently. Article III injuries require a firmer foundation,” (Id.)
“We conclude that Finkelman’s difficulties in alleging an injury-in-fact are insurmountable. Because the District Court lacked subject matter jurisdiction to reach the merits of plaintiff’s claims, we will therefore vacate the dismissal of Finkelman’s Ticket Law and unjust enrichment claims under Rule 12(b)(6),” (Id.) at 8).
However, the NFL had not challenged Finkelman’s claims based on lack of standing. The Court dismissed the appeal without prejudice for lack of personal jurisdiction and remanded the case to the District Court. The District Court “may exercise its discretion as to whether plaintiffs should be granted leave to amend their complaint,” (Id.). That proceeding, consistent with the Circuit’s opinion, should be swift and sure.
One can only imagine the size of a potential class of would-be money seekers who claim that they wanted to go to the Super Bowl, did not, and therefore should be handsomely rewarded, though less than their lawyers, because the NFL chose to play its championship game in a venue that could not accommodate everyone who wished to go. Indeed, it would be remarkable to see how many people would suddenly be found who now claim to have wanted to go all along but where unable to do so due to whatever ticket distribution formula was used.
Finkelman’s theories, such as they are, would also come as a surprise to the participant players, coaches, trainers, and staff and their families, as they would be branded as part of a scheme to deprive some one like Finkelman of his apparent right to attend the game.
It is also fascinating that Finkelman thought the NFL was unjustly enriched when he paid a scalper, rather than the scalper, but then again, his lawyer was going where the money is, and not where Finkelman’s money actually went. This sort of claim cries out for the English rule where the loser pays. Article III standing is required by the Constitution, no matter how much Finkelman and Hoch-Parker and their lawyers want to be paid.
Birren is former general counsel of the Oakland Raiders and a frequent contributor to Sports Litigation Alert.
