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Top court answers questions on ticket-fee add-ons

Ticketing agents in Baltimore must abide by the 50-cent limit on additional fees set forth in the city’s licensing code more than 60 years ago, the Court of Appeals said Friday.

However, in another part of the opinion, the court limited the right of people who have already used their tickets to file suit.

The state’s highest court answered several questions posed by the U.S. District Court in Baltimore, where a judge is hearing a lawsuit over the fees charged by Live Nation Entertainment Inc., which merged with Ticketmaster Entertainment LLC in 2010.

The case was filed by Gordon & Wolf Chtd. on behalf of ticket-buyer Andre Bourgeois against Live Nation; its local ticketing agency, Landover-based Monumental Ticketing L.P.; and Lyric Productions LLC, which owns the Lyric Opera House in Baltimore.

“We are happy,” said Martin E. Wolf, a principal at the Towson-based firm. “We think it is a very important decision and a big decision and we are very pleased with what court came out with.”

Live Nation’s attorney, Patrick J. Carome of Wilmer Cutler Pickering Hale and Dorr LLP in Washington, declined to comment on the case.

The suit alleged that Live Nation is violating a Baltimore law that requires ticketing agencies to be licensed as well as a provision that limits add-on fees by licensed agencies to 50 cents per ticket.

The court said that ticket agents need not have their own license if the exhibitor (in this case, the Lyric) is licensed; but whether it is licensed or not, the agent must abide by the terms of the law.

“The ordinance ensures that whoever is selling ticket, the price is clear, whether it’s a ticketing agency or the venue itself,” Wolf said.

The suit stems from a 1949 law intended to cull scalpers selling overpriced tickets to Naval Academy football games.

“All that has happened since 1949 is that, along with prices and costs generally, the price of tickets to sports and entertainment events has risen significantly — from between one and four dollars to, in this case, $52 — but the 50 cent markup limit for licensed agents has remained the same,” Judge Alan M. Wilner, a retired judge sitting by special assignment, wrote for the unanimous Court of Appeals. “The ordinance may be functionally obsolete in that regard, but it is not legally so.”

Live Nation is not licensed and earned an average of $7.82 per ticket in 2009, according to the complaint. Ticketmaster and the Lyric have a “facility agreement” granting Ticketmaster exclusive rights to sell Lyric tickets in-person, online and by telephone.

Live Nation, however, argued that the law only applies to the resellers of tickets, not entities making original sales. It also argued that the addition of a service charge does not count as selling the ticket for more than its marked price because the extra money is for the convenience of buying the tickets electronically.

The court found otherwise.

“The language used by the City Council is unambiguous and cannot properly be read as limited to the resale of tickets,” Wilner wrote. “If the City Council meant to limit the ordinance in that manner, it could easily have said so, as other legislatures have done.”

The complaint also accuses Live Nation of giving a portion of the money it receives through service charges to the Lyric as a kickback, which it says makes the prices the Lyric advertises deceptive.

Bourgeois, of Baltimore, filed the lawsuit in July 2011 after buying tickets to a Jackson Browne concert at the Lyric about two years before. Bourgeois bought the tickets for $52, but was charged an additional $12 since he bought the tickets through Ticketmaster.

Judge Ellen L. Hollander, who is handling the case in U.S. District Court, sent certified questions to the Court of Appeals last June.

Hollander asked the Court of Appeals to interpret the sections of the Baltimore code that are quoted in the lawsuit since the ordinances have never been interpreted by the appellate courts.

The top court heard arguments on Nov. 29 and issued its opinion Friday.

The court agreed that Live Nation did not need a separate license. Live Nation had also argued that Maryland no longer recognized the right to sue for the return of “money had and received” on an illegal contract.

The Court of Appeals said such actions are allowed, but not for contracts that have been fully “executed” — that is, completed.

“When the contract is fully executed … the situation is different, for in that setting, the parties ordinarily are in pari delicto and neither should be able to take advantage of the illegality,” Wilner wrote.

With the questions answered, the case will resume in federal court.

“What the Court of Appeals has determined is the City Code has protected people buying tickets,” said Benjamin Carney, a principal at Martin Wolf. “Now, people know what the price is for their tickets.”