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Finkelman v. National Football League

Supreme Court of New Jersey

January 9, 2019

Josh Finkelman, on behalf of himself and the Putative class, Plaintiff-Appellant,
v.
National Football League; NFL Ventures, L.P.; NFL Properties, L.L.C., NFL Ventures, Inc.; NFL Enterprises, L.L.C., Defendants-Respondents.

          Argued September 27, 2018

          On certification of questions of law from the United States Court of Appeals for the Third Circuit.

          Bruce H. Nagel argued the cause for appellant (Nagel Rice, attorneys; Bruce H. Nagel, Robert H. Solomon, and Greg M. Kohn, on the briefs).

          Jonathan D. Pressment (Haynes and Boone) of the New York bar, admitted pro hac vice, argued the cause for respondents (Haynes and Boone and Fox Rothschild, attorneys; Jonathan D. Pressment, of counsel and on the briefs, and William Feldman, a member of the New York, Texas, and District of Columbia Bars, admitted pro hac vice, on the briefs, and Karen A. Confoy, and Allison L. Hollows, on the briefs).

          Jeffrey S. Jacobson argued the cause for amicus curiae New Jersey Business and Industry Association (Kelley Drye & Warren, attorneys; Jeffrey S. Jacobson, on the briefs).

          PATTERSON, J., writing for the Court.

         In this appeal, the Court reviews questions certified by the United States Court of Appeals for the Third Circuit in the course of its review of Josh Finkelman's putative class action against defendants, the National Football League and related entities (NFL), arising from the NFL's distribution of tickets to the 2014 Super Bowl.

         The questions concern N.J.S.A. 56:8-35.1 (section 35.1), which was in force in 2014 and states that "[i]t shall be an unlawful practice for a person, who has access to tickets to an event prior to the tickets' release for sale to the general public, to withhold those tickets from sale to the general public in an amount exceeding 5% of all available seating for the event."

         The NFL, following its established practice for Super Bowl games, sold one percent of the tickets to members of the public who had won the right to purchase those tickets in an NFL-sponsored lottery and gave the remaining ninety-nine percent to teams, broadcast networks, corporate sponsors, and other individuals and entities. Plaintiff Josh Finkelman alleges that the NFL withheld an excessive percentage of those tickets contrary to section 35.1. In his individual capacity and as the representative of a proposed class of individuals who either bought 2014 Super Bowl tickets at premium prices on the secondary market or could not afford to do so, plaintiff seeks various remedies including treble damages under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -210. The United States District Court for the District of New Jersey dismissed the action, and plaintiff appealed.

         The Third Circuit submitted the following certified question: "Does plaintiff Josh Finkelman properly plead a claim under the New Jersey Ticket Law, N.J.S.A. 56:8-35.1?" The Court accepted the certified question and reformulated it as follows:

2) Are tickets to an event that are sold to winners of a lottery "release[d] for sale to the general public" within the meaning of [section 35.1], and, if so, are tickets distributed to selected entities "[withheld] . . . from sale to the general public" within the meaning of [section 35.1]?

         HELD: (1) The term "person" in section 35.1 includes not only ticket brokers and resellers, but also other individuals and entities with "access to tickets to an event prior to the tickets' release for sale to the general public." N.J.S.A. 56:8-35.1. (2(a)) The sale of tickets to winners of the NFL's ticket lottery constitutes a "release for sale to the general public" within the meaning of section 35.1. (2(b)) The Super Bowl tickets sold to lottery winners were the only 2014 Super Bowl tickets designated by the NFL for "release for sale to the general public" within the meaning of section 35.1, however. The NFL's distribution of other tickets to the 2014 Super Bowl to its teams, other selected individuals, and entities therefore does not constitute the unlawful withholding of more than five percent of "tickets to an event prior to the tickets' release for sale to the general public" under section 35.1.

         1. In 1983, the Legislature enacted the Ticket Resale Law, N.J.S.A. 56:8-26 to -38, as a provision of the CFA. In 1997, Governor Whitman appointed the Ticket Brokering Study Commission to assess the efficacy of the Ticket Resale Law and recommend amendments to it. Among other suggestions, the Commission urged the Legislature to eliminate or curtail "the holding back of tickets" from initial sales, so that "the greatest number of tickets will be available to the greatest number of ordinary fans on the initial sale to the public." Following the report, the Legislature, in addition to other amendments, enacted section 35.1 as part of the CFA, a remedial statute applied broadly to root out consumer fraud. (pp. 5-6, 12)

         2. The Court's first inquiry is whether the term "person," as used in section 35.1, denotes only ticket brokers and resellers or applies more broadly to other individuals and entities who have "access" to tickets prior to their release for sale to the general public. The Legislature defined "ticket broker" in N.J.S.A. 56:8-26(f), and that term appears in provisions of the Ticket Resale Law that address the licensing and regulation of ticket brokers and limit the premium that can be collected by resellers who are not registered ticket brokers. In contrast, the Legislature used the term "person" in section 35.1 and several other provisions of the Ticket Resale Law. Section 35.1's plain language thus evinces a legislative intent to apply the statute not only to ticket brokers and resellers, but also to a broader class of individuals and entities with "access to tickets to an event prior to the tickets' release for sale to the general public." The Court answers the first certified question in the negative. (pp. 12-15)

         3. The Court next considers whether tickets sold to winners of the NFL's lottery were "release[d] for sale to the general public" within the meaning of section 35.1. The NFL conducted its 2014 Super Bowl ticket lottery to make a limited number of tickets available to the general public. The public was invited to submit entries for the lottery, and winners were selected by random drawing. Each lottery winner was permitted to purchase two tickets at face value. Applying section 35.1's plain language, it is clear that the ticket lottery effected a "release" of tickets for sale to the "general public" for purposes of section 35.1. Nothing in section 35.1 or its legislative history suggests that to constitute a "release for sale to the general public," tickets must be made available to any member of the public who wants to purchase them. The tickets were indeed "release[d] for sale" to the winning entrants; the NFL sold two tickets to each winner. Thus, when the NFL made one percent of the tickets available for sale to the lottery winners it "released" those tickets for sale, and the Court answers the first component of the second certified question in the affirmative. (pp. 15-16)

         4. The final inquiry is whether the tickets distributed to selected entities -- in this case, the ninety-nine percent of 2014 Super Bowl tickets given to NFL teams, corporations, broadcast networks, media, sponsors, and the Super Bowl host committee -- constitute "tickets to an event prior to the tickets' release for sale to the general public" that are "[withheld] . . . from sale to the general public" within the meaning of section 35.1. According to plaintiff, the Legislature enacted section 35.1 to ensure that ninety-five percent of all seats for an event would be available to the general public for purchase. Section 35.1's plain language suggests the Legislature sought to impose a more modest constraint on the sale of tickets to sports and entertainment events. By the statute's express terms, the Legislature imposed restrictions only on the withholding of tickets that would -- if not diverted -- be destined to be available for sale to the general public. The provision plainly would be implicated if the NFL, or another individual or entity within the statutory definition of "person," were to withhold more than five percent of the tickets designated for lottery winners, thus reducing the number of tickets available to those winners to a number below the intended one percent. No such unlawful withholding of tickets reserved for lottery winners, however, is alleged in this case. The tickets at the heart of plaintiff's action were part of the ninety-nine percent of tickets reserved long before the 2014 Super Bowl for specific entities with ties to the NFL. Those tickets were never destined to be part of a public sale. Tickets distributed to selected entities were not "[withheld] . . . from sale to the general public" within the meaning of section 35.1, and the Court answers the second component of the second certified question in the negative. (pp. 16-20)

          CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE PATTERSON'S opinion.

          OPINION

          PATTERSON JUSTICE

         In this appeal, we review questions certified by the United States Court of Appeals for the Third Circuit. The Third Circuit certified the questions in the course of its review of Josh Finkelman's putative class action against defendants, the National Football League and related entities (NFL), arising from the NFL's distribution of tickets to the 2014 Super Bowl.

         The certified questions concern N.J.S.A. 56:8-35.1 (section 35.1), a consumer protection statute that regulates ticket sales to sports and entertainment events. Section 35.1 provides:

It shall be an unlawful practice for a person, who has access to tickets to an event prior to the tickets' release for sale to the general public, to withhold those tickets from sale to the general public in an amount exceeding 5% of all available seating for the event.

         The law was in force when the Super Bowl was held in New Jersey on February 2, 2014. The Legislature, however, has since repealed section 35.1, effective February 1, 2019.

         The NFL, following its established practice for Super Bowl games, sold one percent of the tickets to the 2014 Super Bowl to members of the public who had won the right to purchase those tickets in an NFL-sponsored lottery. The NFL gave the remaining ninety-nine percent of the tickets to teams, broadcast networks, corporate sponsors, and other individuals and entities.

         Plaintiff Josh Finkelman alleges that the NFL's allocation of the 2014 Super Bowl tickets constituted "withhold[ing]" of an excessive percentage of those tickets contrary to section 35.1. In his individual capacity and as the representative of a proposed class of individuals who either bought 2014 Super Bowl tickets at premium prices on the secondary market or could not afford to do so, plaintiff seeks various remedies including treble damages under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -210. The United ...


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