PHILADELPHIA (CN) – The Third Circuit revived claims Friday that Super Bowl ticket hoarding by the NFL caused fans to pay inflated prices on the secondary market.
Lead plaintiff Josh Finkelman has seen his class action dismissed twice in the last four years, but the Dec. 15 decision out of Philadelphia says Finkelman’s recent changes to his allegations of price gouging established his standing to bring the suit.
The NFL was holding Super Bowl XLVIII at the MetLife Stadium in East Rutherford, N.J., when the Finkelman first brought his suit. Though the stadium has a seating capacity of 77,500, he noted that the NFL made just 1 percent of those seats available to the public via lottery, reserving the lion’s share for football teams, TV stations and other “league insiders.
Finkelman ultimately paid $4,000 on the secondary market for two tickets that had a face value of $800 each. The complaint alleged violations of the New Jersey Ticket Law, which prohibits withholding more than 5 percent of available seating to the public, but Finkelman stumbled initially to show standing.
In affirming dismissal last year, the Third Circuit noted that Finkelman’s pleading failed to how the NFL’s practice of withholding most of the tickets affected pricing. “We can only speculate — and speculation is not enough to sustain Article III standing,” the court ruled.
Finkelman tried to beef up his claims in an amended complaint, including testimony from economist Daniel Rascher who specializes in secondary ticket markets. Rascher submitted evidence that, without the NFL’s withholding, more fans would sell their tickets to other fans, and that the market is instead dominated by brokers with inroads to league insiders who jack up ticket prices.
A three-judge panel of the Third Circuit held oral argument on Finkelman’s second appeal in July. On Friday, the court was unanimous that Rascher’s analysis regarding insider sales establishes standing.
“Finkelman did not just allege that prices would be lower on the secondary market were it not for the NFL’s withholding,” U.S. Circuit Judge Julio Fuentes wrote for the court. “Instead, Finkelman alleged a causal chain justifying why the NFL’s withholding set into motion a series of events that ultimately raised prices on the secondary market.”
The NFL “may be correct that Finkelman will not be able to prove that the 2014 Superbowl [sic] secondary ticket market worked as he claims,” the 18-page opinion says.
“But Finkelman is not required to prove his economic theory in his complaint, and at this stage in the litigation, Finkelman has alleged sufficient factual allegations to show that [the NFL’s] withholding raised the price that he paid for the tickets on the secondary market,” Fuentes added.
Finkelman’s attorney, Bruce Nagel of Roseland, New Jersey, said he was “extremely thrilled” by the reversal, which now exposes the NFL to damage claim of more than $300 million.
NFL spokesman Brian McCarthy said in a statement that the NFL’s ticket distribution policy complies with New Jersey’s law.
The Third Circuit invited the New Jersey Supreme Court to rule on whether the amended complaint has standing under state law.
Of the total tickets to the 2014 Super Bowl, the NFL gave 17.5 percent each to the two teams in the contest, the Denver Broncos and Seattle Seahawks. Remaining NFL teams were given 35 percent, and 25 percent went to companies, broadcast networks, host committee and other league insiders.
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