NPS, LLC v. StubHub, Inc.

25 Mass. L. Rptr. 478
CourtMassachusetts Superior Court
DecidedJanuary 26, 2009
DocketNo. 064874BLS1
StatusPublished

This text of 25 Mass. L. Rptr. 478 (NPS, LLC v. StubHub, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
NPS, LLC v. StubHub, Inc., 25 Mass. L. Rptr. 478 (Mass. Ct. App. 2009).

Opinion

Gants, Ralph D., J.

The New England Patriots (“the Patriots”) have brought this action seeking, among other things, permanent injunctive relief barring de[479]*479fendant StubHub, Inc. (“StubHub”) from participating in the resale of Patriots tickets on its internet website.3 As against StubHub, the Amended Complaint claims (1) intentional interference with advantageous relations (Count I); misappropriation of name (Count II); and unfair trade practices in violation of G.L.c. 93A, §11 (Count III).4 In Count VII, the Patriots ask the Court to hold all StubHub profits obtained through the sale of Patriots’ tickets in a constructive trust. StubHub has moved for partial summary judgment on Count I. For the reasons detailed below, the motion is DENIED.

BACKGROUND

The following facts are undisputed unless otherwise noted. Each season, the Patriots make available tickets to home football games. Over 95% are season tickets issued by NEP; the balance are premium seating tickets issued by NPS. Until 2007, the following warning was printed on the back of each ticket in large block letters:

ANY NON-LICENSED INDIVIDUAL RESELLING THIS TICKET BY ANY METHOD INCLUDING WITHOUT LIMITATION, IN PERSON, ON AN AUCTION WEB SITE, OR OTHERWISE OVER THE INTERNET AND ANY LICENSED INDIVIDUAL OR ENTITY RESELLING THIS TICKET IN VIOLATION OF APPLICABLE LAW, IS SUBJECTTO ARREST, LEGAL ACTION AND LOSS OF SEASON TICKET PRIVILEGES.5

In addition, each ticket stated that it was a revocable license, that the Patriots reserved the right to revoke the ticket at any time and for any reason, and that the Patriots may refuse admission to, or eject, any ticket holder who fails to comply with any applicable rules or terms.

In an effort to maintain what the Patriots describe as a safe, secure, and family-friendly environment for home games, they have exercised their right to revoke season tickets when ticket holders, either the ticket owners themselves or their guests, have engaged in what the Patriots consider to be unsafe or unacceptable conduct. See Yarde Metals, Inc. v. New England Patriots, LP, 64 Mass.App.Ct. 656, 660 (2005). Thus, for example, should a season ticket holder give his or her tickets to another person for any single home game, and should the Patriots eject that person for unacceptable conduct, the Patriots may revoke the season tickets, regardless of the fact that the original holder was not present at the game. Upon learning that a ticket holder has impermis-sibly transferred a ticket or tickets, the Patriots have revoked that holder’s season tickets and refunded the full face value. In this way, all season ticket holders are responsible for the behavior of their guests. In order to effectuate this policy, each ticket bears a unique bar code that is electronically scanned upon entrance. Should the Patriots cancel a ticket, the bar code is voided, and the ticket is useless.

The Patriots are blessed with many loyal fans who wish to buy season tickets but are unable to do so. The Patriots have therefore established a wait list where, for a $100 deposit per seat, fans may join the list and await the opportunity to buy season tickets as they become available. The deposit is credited toward the purchase of season tickets when they do become available, and is refundable if no seats are available when the fan removes his or her name from the wait list.

The Patriots also recognize that season ticket holders may not be able to attend all the pre-season and home games. For this reason, the Patriots provide an online forum through TicketMaster, called TicketExchange, whereby holders may post their tickets on a secure website accessible only to other season ticket holders and wait list members.6 Once a match is made on TicketExchange between the season ticket holder who has posted the seats, and the person seeking them, the Patriots cancel the original tickets, void the bar code, and issue to the recipient new tickets with a different and valid bar code. The Patriots sell the tickets at face value, and reimburse the original holder of the unused tickets. Since the tickets sold through TicketExchange are can-celled, not transferred, the original holder is not responsible for the behavior of persons sitting in those seats. Neither the selling ticket holder, the purchasing ticket holder, nor the Patriots profit in any way from any TicketExchange transaction.7

StubHub operates a website (www.stubhub.comj that allows people to buy and sell tickets to sporting, concert, theater, and other live entertainment events. In order to use the website, an individual must register as a StubHub member, and agree, among other things, to comply with “all applicable local, state, federal and international laws, statutes and regulations regarding the use of the Site and the selling of tickets.” On its seller “Q&A” page, StubHub states that Massachusetts law prohibits the reselling of tickets at more than $2.00 above face value, except that a licensed broker may charge additional expenses “related to acquiring and selling the ticket.” See G.L.c. 140, §§185A & D

Sellers list their available tickets on the website and assign a price to each ticket in one of three formats; (1) auction, where the seller lists a minimum price and an auction length, up to seven days, and buyers may bid accordingly; (2) fixed price, where the seller lists a definite price at which the ticket will sell immediately when the buyer clicks “Buy Now”; and (3) declining price, whereby the seller sets a maximum price which will decrease linearly each day until the seller’s minimum price has been reached. Pursuant to the user agreements, Stub-Hub receives a 25% commission from each sale: 15% of the selling price from the seller, and 10% added to the total sales price due from the buyer. It is undisputed that the majority of Patriots tickets sell on StubHub for prices greatly in excess of face value.

StubHub offers buyers its “FanProtect Guarantee” in the event that tickets are invalid, or are not honored by the venue. To invoke this Guarantee, the buyer must first obtain independent confirmation from the venue, in this case the Patriots, that the tickets are invalid. Upon receipt of this confirmation, StubHub will refund the full [480]*480purchase price to the buyer, including all service fees and handling charges. This guarantee is limited to two claims, or a lifetime maximum of $1,000.

In addition to the above services, in 2005 StubHub created a category of sellers it has identified as “LargeS-ellers.” As defined by StubHub, LargeSellers are those who “take a large interest in tickets spanning over multiple events and genres” for whom StubHub provides extended privileges and incentives above those provided to its regular users. The 2005 “LargeSeller’s Handbook” states that “StubHub strongly urges our LargeSellers to check the website from time to time for underpriced tickets or exclusive listings that may not be seen elsewhere.”8 As an incentive to LargeSellers, StubHub offers “the additional benefit of purchasing tickets with no ‘buy-side’ fee. In other words, the standard fee of 10% that is added to the listing price at the END of the transaction is removed for LargeSellers.” LargeSeller’s Handbook, April 2005.9

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Bluebook (online)
25 Mass. L. Rptr. 478, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nps-llc-v-stubhub-inc-masssuperct-2009.