(March 9, 2012, Weil News)
Weil, Gotshal & Manges LLP, along with co-counsel Cooley Godward Kronish LLP and K&L Gates LLP, obtained a major victory for StubHub, the online marketplace for the resale of tickets by third-party buyers and sellers to entertainment events, on March 6, 2012, on an issue of critical importance to Internet websites and the growth of e-commerce when the North Carolina Court of Appeals held that StubHub could not be held liable for the resale of allegedly overpriced tickets by third-party sellers on its website based on federal immunity under Section 230 of the Communications Decency Act.
At issue in the case were tickets to a Hannah Montana concert. Plaintiffs claimed they were entitled to damages because the price of the tickets were in excess of the maximum resale price allowed at the time under the state’s “ticket scalping” statute and the trial court agreed, holding that StubHub was not entitled to immunity from liability under the Communications Decency Act because its conduct “constituted an unfair and deceptive trade practice.”
The case involved an issue of first impression for North Carolina. The North Carolina Court of Appeals issued a writ of certiorari in order to hear this interlocutory appeal and determine the proper scope of Communications Decency Act immunity and its application to StubHub in the case before it. The decision reversed the trial court’s decision below and granted summary judgment for StubHub because it did not "materially contribute" to the unlawful ticket price in the transaction at issue, which was set by a third-party seller, and StubHub did not otherwise lose immunity for fees it charged for its services because it was neither the ticket seller nor the ticket seller's agent.
Eleven amici submitted a joint brief supporting Weil's argument that the trial court's decision to narrowly construe the scope of immunity under the Communications Decency Act would have created uncertainty by going against the weight of authority on this issue, and would also have a chilling effect on Internet businesses. Wilmer Cutler Pickering Hale & Dorr LLP represented the amici.
This is the third time in less than a year that StubHub has prevailed in actions involving ticket resales. In June 2011 StubHub won dismissal, with prejudice, in a ticket resale action involving New York Yankees tickets
, and in February 2012 an action involving the resale of Philadelphia Phillies tickets was dismissed, also with prejudice
. Weil represented StubHub in these matters as well.
The Weil litigation team on the instant action was led by partner David Lender, who argued the appeal, and included associates Eric Hochstadt and Kristen Echemendia. The team was assisted by Jonathan Bloom, Gregory Silbert, and Mark Fiore, counsel in Weil’s Appellate and Intellectual Property practice areas.