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Judge limits claims under Ticketmaster suit

The lawsuit that led the city of Baltimore to update its Truman-era ticket-surcharge law can proceed in U.S. District Court, but the plaintiff’s claims for damages have been significantly narrowed.

Judge Ellen L. Hollander dismissed claims of fraud, misrepresentation and federal racketeering against defendants Live Nation Entertainment Inc., Monumental Ticketing Limited Partnership and the Lyric Opera House, effectively eliminating the possibility of obtaining punitive damages.

However, the core of the damages lawsuit remains, the plaintiffs’ lawyers say, and they intend to begin the next step of certifying the case as a class action.

“The defendants argued the [cap on ticket surcharges] was unconstitutional and that the claims should be dismissed,” said Benjamin H. Carney of Gordon, Wolf & Carney Chtd. in Towson. “The court is holding that it is not unconstitutional under the law and that we can pursue these claims in court.”

The named plaintiff, Andre Bourgeois, can still seek damages for “money had and received” — funds that he has already given Ticketmaster, under the city’s 1949 cap on ticket surcharges.

The Maryland Court of Appeals found the surcharge law was still in effect in January 2013 after Hollander requested its advice on the law’s interpretation.

In the wake of that opinion, the Baltimore City Council quickly revised the law, eliminating the 50-cent cap on ticket fees last March.

Meanwhile, the underlying suit remains pending before Hollander in the federal court.

Bourgeois is challenging a $12 service fee on a $52 ticket he purchased for a Jackson Browne concert at the Lyric in 2009.

Bourgeois bought the ticket on Ticketmaster’s website. Ticketmaster has exclusive rights to sell tickets to shows at the Lyric; it keeps a portion of the service charge for itself and gives the rest back to the Lyric along with the original ticket fee.

In his lawsuit, Bourgeois claimed the practice violates two provisions of the Baltimore City Code, that the company practices fraud and misrepresentation by implying the service charge was legal and failing to disclose that it gives a portion of the funds back to the Lyric.

Bourgeois, of Baltimore, also claimed six counts of violations under the federal Racketeer Influenced and Corrupt Organizations Act (RICO), claiming the fees returned to the Lyric were a kickback scheme.

Hollander issued a memorandum opinion and order Monday allowing only the “money had and received” claim to move forward.

“I really think that what’s happening today, it’s a good day for consumers and people who go to events in Baltimore,” said another of Bourgeois’ attorneys, Martin E. Wolf of Gordon, Wolf & Carney.

The Lyric’s attorney, Lawrence J. Quinn of Tydings & Rosenberg LLP in Baltimore, declined to comment. Live Nation’s attorney, Robert J. Mathias of DLA Piper US LLP in Baltimore, did not respond to a request for comment.

“Monumental Ticketing is pleased that the district court outright dismissed nine of the ten claims that plaintiff asserted in his complaint,” its attorney, Patrick J. Carome of Wilmer Cutler Pickering Hale and Dorr LLP in Washington, D.C., said in a statement. “As for the lone surviving claim, the court’s decision points to significant reasons why it too may fail. The parties will need to conduct some discovery and Monumental Ticketing believes it has a very good chance both of defeating the named plaintiff’s one remaining claim and of defeating any effort that plaintiff makes to certify a class.”

A question of code

Hollander’s decision comes more than a year after the Maryland Court of Appeals ruled on several aspects of the case dealing with a portion of the 1949 code, which placed a 50-cent limit on service fees to deter scalpers at U.S. Naval Academy football games.

The Court of Appeals held in January 2013 that Ticketmaster did not need a license to sell tickets in Baltimore if it is authorized to sell by a licensed exhibitor, like the Lyric.

However, the court also held that a ticketing agency could not charge more than the face value of the tickets, and found that “money had and received” was still a good cause of action in Maryland for contracts that had not been completed.

After the Court of Appeals’ decision, the defendants filed a new motion to dismiss the suit in federal court.

Ticketmaster argued that the city code did not apply to Bourgeois’ purchase since he did not buy it within city limits. It also contended that Bourgeois could not seek damages because he and Ticketmaster were both equally at fault — in pari delicto — and because the contract to purchase the ticket has been fully executed.

The defendants also argued the money had and received claim was barred under the voluntary payment doctrine because Bourgeois had full knowledge of Ticketmaster’s fees and services, though he claimed he was not aware of the fee.

Hollander rejected those claims, finding that Bourgeois is not in pari delicto with Ticketmaster since the intent of the city code is to protect ticket buyers, and that the voluntary payment doctrine would not apply since Bourgeois did not have “full knowledge of the facts” — specifically, he was not aware Ticketmaster gave back a portion of the service fee to the Lyric, Hollander ruled.

However, Hollander agreed that Bourgeois failed to prove a misrepresentation occurred.

“Even if calling the $12 ‘service charge’ constituted a representation, it would not constitute a misrepresentation,” Hollander wrote.

That holding trickled down to the other counts, causing Hollander to dismiss claims of concealment and violations of the Maryland Consumer Protection Act and the federal RICO Act.

“Plaintiff has not alleged any fraudulent representation or misrepresentation and, in any event, his allegations do not give rise to a plausible inference that defendants acted with specific intent to defraud their customers,” Hollander wrote.