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New Jersey Association of Ticket Brokers v. Ticketron

Decided: June 30, 1988.

NEW JERSEY ASSOCIATION OF TICKET BROKERS, PLAINTIFF-APPELLANT, AND BIRN-MAR TICKETS, INC. T/A THE TICKET BOX AND THE TICKET RACK, PLAINTIFF-RESPONDENT,
v.
TICKETRON, A DIVISION OF CONTROL DATA CORP., A DELAWARE CORP., AND THE NEW JERSEY SPORTS AND EXPOSITION AUTHORITY, DEFENDANTS-RESPONDENTS, AND IRWIN I. KIMMELMAN, ATTORNEY GENERAL OF NEW JERSEY, AND THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS-THIRD-PARTY PLAINTIFFS, V. RICHARD BIRNBACK AND MICHAEL BIRNS, INDIVIDUALLY AND AS PRESIDENT, OFFICERS, DIRECTORS AND OWNERS OF BIRN-MAR TICKETS, INC., T/A THE TICKET BOX AND THE TICKET RACK, THIRD-PARTY-DEFENDANTS-RESPONDENTS (TWO CASES). NEW JERSEY ASSOCIATION OF TICKET BROKERS, PLAINTIFF-RESPONDENT, AND BIRN-MAR TICKETS, INC. T/A THE TICKET BOX AND THE TICKET RACK, PLAINTIFF-APPELLANT, V. TICKETRON, A DIVISION OF CONTROL DATA CORPORATION, A DELAWARE CORPORATION, AND THE NEW JERSEY SPORTS AND EXPOSITION AUTHORITY, DEFENDANTS-RESPONDENTS



Michels, Gaynor and Arnold M. Stein. The opinion of the court was delivered by Gaynor, J.A.D.

Gaynor

In these consolidated cases, plaintiffs challenge the validity and application of N.J.S.A. 56:8-26 et seq., the anti-ticket-scalping law enacted in 1983.

Plaintiffs, New Jersey Association of Ticket Brokers (Ticket), an unincorporated association of ticket brokers operating in New Jersey, and Birn-Mar Tickets, Inc. (Birn-Mar), a New Jersey corporation engaged in the business of ticket brokerage, appeal from the summary judgment dismissing those portions of their complaints attacking the constitutionality of the statute and determining that they and third-party defendants, Michael Birns and Richard Birnback, had violated the statute thereby subjecting them to the statutory penalties. On this appeal from judgments entered in the Chancery Division, Ticket renews its constitutional arguments contending the statute violates due process of law, the Commerce Clause of the United States Constitution, the Contract Clause of the United States Constitution, prohibits free choice of occupation, and denies it equal protection as guaranteed by the State and Federal Constitutions.

It is also claimed that the existence of disputed issues precluded the granting of a summary judgment. Birn-Mar also challenges the constitutionality of the statute, urging that it violates the substantive due process rights accorded by the Fourteenth Amendment of the United States Constitution and Art. I, para. 1 of the New Jersey Constitution and further that the statute is not reasonable or appropriate to the objective sought by the legislation. We disagree and affirm.

As ticket brokers, plaintiffs individually sell tickets to concerts, sporting events and other entertainments at a premium per ticket, a price in excess of the face value printed on the ticket. The major part of their New Jersey business was the resale of tickets for concerts, Giants' football games and other sporting events staged by the New Jersey Sports & Exposition Authority (NJSEA) at the Meadowlands complex. Assertedly, plaintiffs service a secondary market of those members of the public who are unable to stand in ticket lines because of jobs, school or parental disapproval, or, who do not want tickets months in advance of the event. Tickets for Giants games are obtained from season ticket holders for two or three times the ticket price and concert tickets are purchased from youths who stand in line at premiums of $7 to $25 per ticket. Brokers also allegedly offer expertise in locating prime seat locations.

Statutory control over the resale of tickets commenced with the legislation enacted in 1947 permitting municipalities to enact ordinances regulating this activity. L. 1947, c. 385, codified as N.J.S.A. 40:48-2.18, et seq.*fn1 Municipalities were authorized to license ticket brokers and to limit the maximum premium upon a resale to $1 plus tax in excess of the original price of the ticket. The enforcement of the ordinance and penalties, not more than $100 for each offense, as well as revocation and suspension of any license were left to the individual municipalities which had enacted the licensing ordinances.

The ineffectiveness of municipal regulation prompted a review by the office of the attorney general in 1982 of various ticket scalping complaints. The abuses thus disclosed induced legislative activity resulting ultimately in the enactment of the legislation under attack in the present litigation.

Under N.J.S.A. 56:8-26, et seq., a ticket agent is a "person who is involved in the business of selling or reselling tickets of admission to places of entertainment who charges a premium in excess of the price, plus taxes, printed on the tickets." N.J.S.A. 56:8-26f. A "place of entertainment" is defined as "any privately or publicly owned or operated entertainment facility within the State of New Jersey such as a theater, stadium, museum, arena, racetrack, or other place where performances, concerts, exhibits, games or contests are held and for which an entry fee is charged." N.J.S.A. 56:8-26d. A "person" is defined as a corporation, company, association, society, firm, partnership or joint stock company as well as an individual. N.J.S.A. 56:8-26c. The statute proscribes the reselling of tickets to a place of entertainment by any person without first having obtained a license from the Division of Consumer Affairs to engage in the business of reselling tickets. N.J.S.A. 56:8-27 and 28; N.J.A.C. 13:45A-20.3(a). In addition to the payment of an application fee, currently $300, an applicant is required to file a bond in the amount of $10,000, conditioned upon compliance with the statute and regulations, the payment of all damages occasioned to any person by reason of misrepresentation, fraud, deceit or other unlawful act in connection with the licensed business and the promise that the applicant, his agents or employees, will not be guilty of any fraud or extortion. N.J.S.A. 56:8-30.

A further provision requires that each place of entertainment print the price charged on the face of each ticket and include the price in any advertising for the event. N.J.S.A. 56:8-33. The statute limits the premium chargeable on a resale by providing:

Except for tickets printed prior to the enactment of this act, each ticket shall have endorsed thereon the maximum premium not to exceed 20% of the ticket price or $3.00, whichever is greater, plus lawful taxes, at which the ticket may be resold. No person shall resell, offer to resell, or purchase with the intent to resell a ticket at any premium in excess of the maximum premium as set forth in this act. [ N.J.S.A. 56:8-33]

Plaintiffs maintain that the impact of this law is to compel each person interested in attending a public or private entertainment within the State of New Jersey to stand in line or be eliminated from attendance. According to counsel for Ticket, only two licenses had been issued as of December 7, 1984. Plaintiffs claim there is no point in putting up a bond because they can't make a living by selling tickets within the statutory limit, particularly when they must buy concert tickets from Ticketron offices and pay Ticketron a service fee of $1.25 per ticket.

At the time this action began, Ticketron had a contract with NJSEA designating Ticketron as the exclusive agent of NJSEA for the sale of tickets for events in the Brendan Byrne Arena and Giants Stadium. All concert tickets were initially offered first by Ticketron and subsequently at the box office. The contract with Ticketron expired on July 31, 1985 at which time a five-year contract was awarded by NJSEA to Ticket World USA. Chief among the complaints voiced by plaintiffs was their allegation that the tickets from Ticketron do not afford the best seats and that the Ticketron agents and promoters skim off the very best seating for their own uses and purposes, including resale. An opinion of the attorney general declared that Ticketron (and accordingly its successor Ticket World) as agents of the State were exempt from the operation of the licensing statute.

After the effective date of N.J.S.A. 56:8-26, et seq., Birn-Mar began selling tickets to concerts within New Jersey charging a premium within the statutory limit but coupling that with a consultation fee. On January 7, 1984 it offered two tickets to a concert with a face value of $13.50 for $35 each. The ticket agent represented that $18.50 of the $35 purchase price was a

consultation fee and requested the buyer to sign a contract which specified that personal services were performed by the agent in selecting the seat, taking into consideration the patron's weight, sex, age, type of crowd, type of music and other factors.

Again on January 20, 1984, two police officers, seeking tickets to the Van Halen concert at the Meadowlands, were offered tickets by an agent at the Birn-Mar Ticket Box, Bergen Mall, for $18 plus a $17 consultation fee and they were asked to sign what was called a waiver form. These two violations in January 1984 formed the basis for the municipal court complaints which plaintiff Birn-Mar sought to restrain by filing suit. As a result of these problems, Birn-Mar claims that it has closed its New Jersey office.

Plaintiffs jointly claim that resale ticket agents serve a vital social and economic function by catering to the needs of those who are unable to stand in line, by offering an excellent choice of seats and by providing a convenience to the public. Without these services assertedly their customers would be forced to use unlawful scalpers. Further, by maintaining permanent places of business within the State they are giving employment to New Jersey residents, paying state and federal taxes and utilizing public utilities.

Plaintiffs further contend that less confiscatory methods are available to curb the alleged abuses. They also claim that the problem of intimidation and harassment can be dealt with by our criminal laws independently of limiting the resale price or outlawing resales, and additionally urge that the problem of stolen tickets should be dealt with by imposing strict sanctions for theft and resale of stolen tickets. Plaintiffs also point out that they agree to be bound for a refund of the purchase price in the event of a cancellation or postponement of any event. While stating that their average selling ...


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