PHOENIX /PRNewswire/ — A Federal Court approved a settlement yesterday involving a class-action lawsuit filed against Ticketmaster which claimed the ticket-selling giant conspired with the National Collegiate Athletic Associate (NCAA) to violate the law by operating an illegal lottery to distribute tickets to certain Division One sporting events. The suit, filed last May, claims the two companies conspired to increase profits by running an illegal lottery for limited tickets to Division One championship games. The alleged lottery collects non-refundable application fees from fans for a limited number of tickets. Under state law, this practice is considered gambling and is illegal.
Plaintiffs also claim both parties failed to disclose the true number of tickets available through the lotteries or failed to refund customers’ application fees if they didn’t win tickets. After the suit was filed, plaintiffs learned that Ticketmaster only participated in part of the lottery and only for one year. The NCAA ran all other alleged illegal ticket lotteries.
The settlement agreement says that after the 2008 ticket application process concluded, Ticketmaster refunded the $10 fees paid by customers who applied for tickets through the lottery to the NCAA 2009 men’s basketball tournament and did not win. The company also agrees it will not process tickets for NCAA events where non-refundable fees are required to apply for a number of insufficient tickets.
Though not part of this settlement, the NCAA appears to have changed its ticketing policies outlined on its Web site last week. The site indicates that the NCAA reversed course and doesn’t allow multiple entries for ticketing lotteries and if a fan doesn’t win, the application fee is returned in full.
“This is a great first step for plaintiffs,” said lead attorney Rob Carey. “Ticketmaster and the NCAA knowingly painted customers into a corner to increase profits, and our lawsuit helped return some of that money. If the NCAA changed its policies, that’s great, but that doesn’t mean what they did was right or that they don’t have to return those illegal fees.”
The settlement class includes anyone who submitted an application to Ticketmaster and paid a non-refundable fee for tickets to the 2009 preliminary rounds of the NCAA men’s basketball tournament. As part of the settlement, plaintiffs are dropping all claims against Ticketmaster with the exception of a conspiracy claim that continues in the case against the NCAA.
Both Ticketmaster and the NCAA operate in states in which lotteries are illegal unless run by the state or licensed charities.
According to the original lawsuit, plaintiffs claim the NCAA and Ticketmaster created two types of lotteries, one for the preliminary rounds and one for the “Final Four,” the final three games of the extraordinarily popular college basketball playoff held each spring.
Fans who wanted to purchase face-value tickets to preliminary-round NCAA basketball games were required to participate in a lottery by sending in an application requesting up to eight tickets, the suit says. To take part in the lottery, applicants must pre-pay the full ticket price for all the games in that round, along with a $10 “service fee.”
According to the suit, if the applicant won the lottery, the NCAA released the tickets. If the applicant was not selected, NCAA refunded only the value of the ticket price while pocketing the fees. Those seeking tickets could enter more than one time so long as they paid a non-refundable entry fee for each application.
The lawsuit moving forward against the NCAA, if approved, represents all fans who submitted an application for tickets to an NCAA championship tournament — including women’s basketball and men’s hockey — and paid a fee to enter a drawing for the right to purchase one or more tickets from 1998 until the present.
The lawsuit lists several charges against the NCAA, including unjust enrichment, civil conspiracy, violations of the Indiana Consumer Protection Act and monies had and received.
To sign up to join this class action, please visit www.hbsslaw.com/NCAA . To contact HBSS regarding this case, please e-mail ncaa@hbsslaw.com or call (602) 840-5900.
Source: Hagens Berman Sobol Shapiro; Web Site: http://www.hbsslaw.com/