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Ticket Resale Action Against StubHub, eBay and the New York Yankees Dismissed With Prejudice

Weil, Gotshal & Manges scored a complete dismissal with prejudice at the pleading stage of a proposed class action alleging that clients StubHub and eBay Inc., parent of StubHub, and the New York Yankees Partnership, deceived consumers into paying higher prices for tickets purchased on StubHub’s website. In its opinion and order dismissing plaintiff’s amended complaint with prejudice, issued June 27, 2011, the court concluded that “[p]laintiff has struck out,” and there was “no need to embark on costly and time intensive briefing of a motion to amend” because plaintiff’s proposed amendments would not overcome the complaint’s “legal defects.”

Plaintiff filed suit in federal court in New York late last year, claiming that StubHub’s practice of not disclosing the identity of the seller and the face value of the resold ticket violated New York’s Arts and Cultural Affairs Law (ACAL), which regulates the resale of tickets, and General Business Law, which prohibits unfair or deceptive trade practices. The court held that plaintiff could not circumvent the exemption in the ACAL for websites that merely facilitate ticket sales, like StubHub; that plaintiff’s ACAL claims otherwise failed because StubHub is not an “operator” of a place of entertainment according to the language of the statute; and that the statute contains no requirement that ticket resale or auction websites, again, like StubHub, print face value information on such tickets. The court also held that plaintiff was seeking to impose on operators, such as the Yankees, an ongoing duty to ensure that every resold ticket contain face value information that was not supported by the language of ACAL. Because the court found no ACAL violations, and because the StubHub website included disclaimers that it was not the ticket seller and that ticket prices may differ from face value, plaintiff's unfair and deceptive trade practices claim failed as well.

The Weil Litigation team was based in New York and included partner David Lender and associates Mark Fiore, Eric Hochstadt, and Kristen Echemendia.

Legalese