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New Jersey judge tosses ticket reseller suit

August 31, 2010 8:09:07 PM PDT
A New Jersey judge has thrown out a lawsuit filed by the state against two concert ticket resellers over their sale of tickets to Bruce Springsteen shows at Giants Stadium last year.

The companies - Orbitz Worldwide and TicketNetwork Direct - were accused of violating the state's Consumer Fraud Act by offering tickets before they were made available to the public, some of which they allegedly didn't possess at the time or which didn't correspond to actual seats in the stadium.

In a 19-page ruling filed Aug. 26 and mailed to the parties, state Superior Court Judge Patricia Costello wrote that a 1996 federal law pre-empts state law and protects the companies from liability for statements or claims made by third parties on their Web site.

Neither company possessed any tickets for sale, but instead provided an Internet marketplace for independent ticket sellers.

"This is a very important decision that has never been presented to courts in New Jersey before," Peter Harvey, a former New Jersey attorney general who represented TicketNetwork, said Tuesday. "The question was, if a ticket seller makes a mistake in the description of the item being sold, does the provider have liability for that, and the answer is no."

According to court documents, an investigator for the state Division of Consumer Affairs bought tickets May 26, six days before Ticketmaster began selling tickets to the general public.

On the website, TicketNetwork and Orbitz notified prospective customers that the companies did not guarantee the accuracy of ticket information listed on the site. TicketNetwork's policy was to prohibit sellers from offering tickets they didn't possess or have a legal right to sell.

The lawsuit turned on the application of the 1996 federal Communications Decency Act, which states that no provider or user of an interactive computer service can be held liable for information originating with a third-party user of the service. The state claimed the CDA didn't cover Orbitz and TicketNetwork because the defendants were "commercial actors" and not merely speakers or publishers.

Costello disagreed, writing, "Defendants' services are consistent with the Congress's intent to encourage commerce over the Internet and ensure interactive computer services are not held responsible for how third parties use their services."

A spokesman for the attorney general said the office was reviewing the ruling.

Don Vaccaro, chief executive officer of TicketDirect, blamed the scarcity of highly sought-after concert tickets for artists who frequently hold back blocks of tickets from the public.

"The secondary ticket market and ticket brokers are not to blame for tickets that are sold out in minutes, but rather they provide an alternative outlet for purchasing these pre on-sale tickets that are normally unavailable to the general public," he said.

The lawsuit was brought a few months after Attorney General Anne Milgram reached a settlement with Ticketmaster over complaints that Springsteen fans were redirected to a subsidiary website that offered tickets for as much as hundreds of dollars above face value. The incident ultimately sparked a Federal Trade Commission investigation that also resulted in a settlement.


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