CPY Document Title - Wexler Wallace LLP

Transcription

COPY
CONFORMED COpy
OF ORIGINAL fiLED
Mark J. Tamblyn (State Bar No. 179272)
Ian J. Barlow (State Bar No. 262213)
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LOS Angeles superior Court
WEXLER WALLACE LLP
455 Capitol Mall, Suite 231
Sacramento, California 95814
Telephone: (916) 492-1100
SEP 112009
Officer/Cle
Dep
JOh~C
Facsimile: (916) 492-1124
[email protected]
[email protected]
By
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l
R-
Ralph B. Kalfayan (State Bar No. 133464)
David B. Zlotnick (State Bar No. 195607)
KRAUSE KALFAY AN BENINK & SLAVENS, LLP
625 Broadway, Suite 635
San Diego, California 92101
Telephone: (619) 232-0331
Facsimile: (619) 232-4019
[email protected]
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Attorneys for Plaintiff
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF LOS ANGELES
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Be 42 16 68
Case No. -
15 KELLY KOCH, on behalf of herself and all
others similarly situated,
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CLASS ACI'lON COMPLAINT
Plainti£t
v.
18 HOB ENTERTAINMENT, INC., a Delaware
19 corporation; INE NATION, INC., a
Delaware corporation; TICKE'IMASTER, a
20 Delaware cozporation; and DOES 1 through
20. inclusive;
21
Defendants.
JURY TRIAL DEMANDED
File by Fax
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Plaintiff, Kelly Koch ("Plaintifi'j, alleges for her complaint, upon information and belief,
24 as follows:
NATURE
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26
OF THE
ACTION
This action arises from defendants HOB Entertainment Inc. 's (''HOB'') and Live
1.
27 Nation, loc.'5 ("live Nation") unlawful advertising and unfair business practices, as well as
28 Ticketmaster's payment of secret rebates and allowances to HOB and Live Nation, in connection
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CLASS ACTION COMPLAINT
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with the sale of tickets to music concerts throughout California.
2.
HOB's and Live Nation's (collectively, the "Promoter Defendants")
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advertisements for concert tickets are designed to and have the effect of systematically misstating
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the true prices of those tickets. The Promoter Defendants advertise tickets for sale at prices that
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are substantially below the prices at which they typically sell those tickets; and, often, tickets for
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their concerts cannot be bought at the advertised prices. The Promoter Defendants'
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advertisements do not timely or adequately disclose an array of confusing, deceptive and
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unconscionable charges that the Promoter Defendants and/or Ticketmaster add to the advertised
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prices for the tickets, including "convenience fees," "service fees," "facility fees," "building
10 fees," ''parking fees," "processing fees," and "delivery charges." Those fees and charges
11 generally add from 15% to more than 50% to the advertised price of such tickets. Defendants
12 add such fees to the price of the overwhelming majority of concert tickets that they sell.
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3.
The Promoter Defendants sell some concert tickets directly, but sell the majority
14 of their tickets through defendant Ticketmaster. Ticketmaster is the world's largest ticketing
15 company. Pursuant to an agreement with the Promoter Defendants, Ticketmaster also imposes
16 substantial "convenience fees," as well as processing fees and delivery charges, on concert ticket
17 purchases, which fees are in addition to the advertised ticket prices. As part of its agreement
18 with the Promoter Defendants, Ticketmaster rebates or kicks back to them a material portion of
19 the fees that it charges and/or collects when it sells tickets to their concerts. The Promoter
20 Defendants' and Ticketmaster's agreement that Ticketmaster will impose such fees and then pay
21 secret rebates and/or kickbacks to the Promoter Defendants from those fees is an essential
22 element of and perpetuates the Promoter Defendants' unlawful advertising scheme.
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JURISDICTION AND VENUE
4.
This Court has jurisdiction over this action pursuant to the California
25 Constitution, Article XI, § 10 and under California Code of Civil Procedure § 410.10 because
26 defendants transact business in California and have committed the acts complained of herein in
27 this State. Plaintiff does not assert any claims under the laws ofthe United States.
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5.
Venue is proper in this jurisdiction pursuant to California Code of Civil Procedure
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§ 395 in that the defendants are headquartered in Los Angeles County. A declaration pursuant to
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California Civil Code section 1780(c) is attached.
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PARTIES
6.
Plaintiff Kelly Koch resides in San Diego, California. During the class period
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defmed below, Plaintiff Koch purchased tickets to the Promoter Defendants' concerts on a
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number of occasions, at least one of which she purchased through defendant Ticketmaster.
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Those purchases were made at prices that were materially inflated over the advertised ticket
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prices by defendants' wrongful conduct, and plaintiff Koch has lost money as a result of
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defendants' wrongful acts.
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7.
Defendant Live Nation is a Delaware corporation with its principal executive
11 offices located at 9348 Civic Center Drive, Beverly Hills, California, 90210. Live Nation is the
12 largest music promoter in California and the United States. During the relevant period, Live
13 Nation has owned or operated a number of large concert venues in California, including, the
14 Verizon Wireless Amphitheater in Irvine, the Wiltem Theater in Los Angeles, the Shoreline
15 Amphitheater in Mountain View, and the Fillmore in San Francisco.
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8.
Defendant HOB is a Delaware corporation with its principal executive offices
17 located at 6255 W. Sunset Boulevard, 16th Floor, Hollywood, California 90028. HOB owns and
18 operates House of Blues Clubs in Anaheim, San Diego, and West Hollywood. In addition,
19 during the relevant period, HOB owned or operated a number of large concert venues, including
20 Cricket Amphitheatre in Chula Vista, California, Cox Arena in San Diego, and the Gibson
21 (formerly Universal) Amphitheatre in Hollywood, California. In or about July 2006, HOB
22 became a wholly owned subsidiary of Live Nation. Concerts promoted by HOB or Live Nation
23 and/or held at venues operated by them are referred to herein as "Live Nation Concerts."
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9.
Defendant Ticketmaster is a Delaware corporation with its principal executive
25 offices located at 8800 Sunset Boulevard, West Hollywood, California, 90069. Ticketmaster is
26 the world's leading ticketing company and sells tickets for many concert promoters, including
27 HOB and Live Nation. Ticketmaster does not purchase tickets from the Promoter Defendants.
28 Rather, pursuant to their contract, Ticketmaster provides and sells ticketing services to the
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Promoter Defendants in return for which the latter allow Ticketmaster to impose various fees and
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charges on Plaintiff and other consumers who purchase concert tickets through Ticketmaster.
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Ticketmaster
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charges it imposes on ticket purchasers.
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Plaintiff and other consumers and facilitates the Promoter Defendants'
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advertisement
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then pays substantial secret rebates to the Promoter Defendants from the fees and
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That relationship
enriches defendants at the expense of
deceptive and misleading
of ticket prices.
Plaintiff alleges on information and belief that, at all relevant times, Defendants
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and Does One through Twenty, inclusive, were the agents, employees, distributors,
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representatives,
partners, and related or affiliated entities or providers of services to or on behalf
10 of their co-defendants,
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sellers,
and in doing the things hereinafter mentioned, were acting in the course
and scope of their agency, employment,
12 ratification of their co-defendants.
or retention with the permission, consent, authority and
Plaintiff is presently unaware of the true names and identities
13 of the defendants sued herein as Does One through Twenty. Any reference made to any
14 defendant by specific name or otherwise, individually
or plural, is also a reference to the actions
15 of Does One through Twenty, inclusive.
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FACTUAL ALLEGATIONS
17 A.
Background
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11.
19 of California.
The sale of tickets to popular music concerts is an enormous business in the state
(As used herein, "Popular music concerts" includes all genres of music except
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classical music and opera.) The overwhelming
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site advance ticket sales, which means that tickets are sold in advance of the date of the
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performance
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commonly, online or over the telephone.
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sold online, either directly by them or, more often, through Ticketmaster.
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12.
majority of such tickets are sold by means of off-
at a place or through a means other than in person at the venue's box office - most
Most tickets to the Promoter Defendants'
Promoters are the persons or entities who put on concerts.
concerts are
Among their typical
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responsibilities
are to contract with artists to perform concerts, ensure appropriate sound,
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lighting, and security, advertise and market the show, and sell tickets to the general public, either
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directly or through a third party.
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13.
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Venues are the arenas, theaters, and clubs where concerts are performed. In some
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instances, the same person or entity that owns or manages a venue will also be the primary
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concert promoter for that venue. In other cases, the venue may contract with or allow an
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independent person or entity to promote concerts at that venue. The Promoter Defendants
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frequently function as both promoter and venue owner/operator, but their precise roles can vary.
14.
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Both venues and promoters frequently contract with Ticketmaster, giving
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Ticketmaster the (often exclusive) right to act as that party's off-site ticketing agent in exchange
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for Ticketmaster's services and a rebate of a portion of the fees that Ticketmaster charges
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consumers when they purchase tickets. The amount of those "rebates" is kept secret and not
10 disclosed, and Plaintiff, like most ticket purchasers, was not even aware ofthe existence of such
11 rebates.
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15.
Where the owners or managers of a venue also act as promoters of a concert, they
13 generally sell the tickets to those concerts, either directly or, more commonly, through a ticketing
14 company, usually Ticketmaster. Where an outside promoter puts on a concert, it generally sells
15 the tickets to that concert, though it usually makes available blocks of tickets for sale at the
16 venue's box office. As the dominant company in the industry, having contracts with both venues
17 and promoters, Ticketmaster generally obtains the exclusive right to sell off-site tickets, with
18 certain modest exceptions (e.g., a band's sale of tickets to its fan club). In addition, in recent
19 years, the Promoter Defendants have directly sold a portion of their tickets through their own
20 web sites.
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16.
Venues typically sell relatively small numbers of tickets at their box offices. The
22 great bulk oftickets, especially to large concerts featuring popular performers, are sold in
23 advance through the Internet and telephone sales. The Promoter Defendants use various methods
24 to maximize the sale of tickets through the Internet or over the phone. Often tickets are made
25 available through "Internet Presales" before any tickets to that concert are available for purchase
26 at the box office. Further, at several venues, such as Cricket Amphitheatre, the box office is only
27 open for very limited periods, with the result that it is difficult or impossible to buy tickets to
28 concerts at the box office in advance of the concert date. Moreover, even though HOB has a box
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office at its downtown San Diego club, which is open most days, it refuses to sell tickets to
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events at other San Diego area HOB or Live Nation venues through that box office, instead
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directing purchasers to purchase tickets online or at a nearby Ticketmaster location, where
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customers are required to pay an assortment of fees in addition to the face price of the ticket.
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17.
The Promoter Defendants and other venue operators prefer to sell tickets over the
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Internet or telephone in large part because such sales facilitate their imposition of substantial fees
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above the nominal advertised ticket prices. Those fees are disproportionate to the true cost of the
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services provided and, in reality, are largely a means for the Promoter Defendants to charge total
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ticket prices that are materially higher than the prices they advertise.
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18.
Ticketmaster acts in concert and collusion with the Promoter Defendants when it
11 sells tickets to their concerts. In connection with such sales, Ticketmaster typically imposes the
12 following charges in addition to the stated ticket price: a variable convenience fee that generally
13 ranges from 10% to 50% of the stated ticket price; a processing fee, which generally is
14 approximately $3.50 per ticket; and delivery fees that vary with the method of delivery, but are
15 assessed even if the consumer uses the recommended electronic delivery and prints the tickets at
16 his or her own computer.
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19.
The above fees are confusingly described. The "convenience fee" imposed by
18 Ticketmaster, like the comparable "service fee" imposed by the Producer Defendants, is a de
19 facto part of the ticket price, although it is not included in the advertised price. This charge is
20 grossly disproportionate to the actual costs that Ticketmaster and/or the Promoter Defendants
21 incur for providing any services to consumers, even including a reasonable profit margin. The
22 convenience fee and other fees are set artificially high by Ticketmaster and the Promoter
23 Defendants in large part because Ticketmaster has agreed to and does secretly kick back a
24 material portion of those fees to the Promoter Defendants.
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20.
Plaintiff and most consumers believe that Ticketmaster unilaterally imposes and
26 keeps the "convenience fees" and other fees that they are forced to pay in connection with ticket
27 purchases through Ticketmaster and are unaware that Ticketmaster is required by contract to kick
28 back a material portion of such fees to The Promoter Defendants.
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B.
The Promoter Defendants'
21.
Unlawful Advertising of Ticket Prices
During the relevant period, The Promoter Defendants have owned and/or operated
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at least three House of Blues Clubs and many other concert venues in the State of California and
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they have promoted concerts at various other venues throughout the State.
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22.
The Promoter Defendants sell the majority of tickets to their concerts through
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Ticketmaster, which does not acquire the tickets but rather acts as The Promoter Defendants'
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agent and sells such tickets on behalf of and at prices and terms largely controlled by them.
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23.
In recent years, The Promoter Defendants have begun directly selling a limited
number of tickets to their concerts through their own web sites, and they generally also sell
10 tickets at their box offices. The great majority of The Promoter Defendants' tickets are sold
11 online, either through their web sites or that of Ticketmaster. The Promoter Defendants have
12 fostered that trend through various marketing tools, including selling tickets through Internet
13 "pre-sales" before any tickets are made available at the box office and through extensive online
14 advertising, which, inter alia, implies that better seats can be obtained online. Moreover, The
15 Producer Defendants limit their customers' ability to purchase tickets at the box office, as
16 discussed above.
17
24.
The Promoter Defendants routinely advertise ticket prices that are substantially
18 below the true prices at which they actually and regularly sell such tickets and, in many instances,
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below the price at which tickets can be bought in any manner. They do this by adding (either
20 directly or through their agent, Ticketmaster) confusing and unconscionable "convenience fees,"
21 "service charges," "parking fees," "facility fees" and/or "building fees" (in addition to substantial
22 processing charges and delivery charges) above and beyond their advertised ticket prices. These
23 fees typically increase the actual prices of such tickets by 15% to 50% above their advertised
24 prices. These supposedly separate fees are a de facto part of The Promoter Defendants' true
25 ticket prices, but are artificially separated from it and labeled "fees" to bait consumers and
26 overcome consumer resistance, with an erroneously low advertised price, thereby enabling The
27 Promoter Defendants to obtain more for their tickets than they otherwise could. In addition:
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(a)
The Defendants' "convenience fees" and/or "service fees" do not represent
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charges for any services provided to the consumer or, at a minimum, are grossly and
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unconscionably disproportionate to the cost of any such services; and
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(b)
The Promoter Defendants' "facility fees" and "building fees," by their very
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names, misleadingly imply that such fees are imposed on consumers by a third-party
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venue owner, which is generally not the case. The Promoter Defendants impose such fees
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at facilities they own and/or operate, and, in most cases, the fees are entirely within their
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control and are simply a means to increase the de facto ticket prices.
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(c)
The "parking fees" are equally egregious. Live Nation has conceded that
their only purpose is to alleviate its own inconvenience in collecting such fees from those
10 who actually drive to an event. A June 2, 2009 CNN article entitled "Live Nation's 'No
11 Service Fee' Tickets Do Carry Fees" reported [t]he parking fee, which does not actually
12 pay for a parking space, is on each ticket -- even if the fan doesn't drive to the show. The
13 article quoted Live Nation's spokesperson, John Vlautin, as saying: "We have always
14 charged it this way to alleviate traffic issues that occur when the fee is taken at the lot
15 entrance." . In fact, Live Nation has not historically added such mandatory parking fees
16 to ticket purchases and does not always add such charges today, as noted in paragraph
17 30(f). Moreover, rather than adding one such parking charge per order, Live Nation
18 imposes a parking fee on each ticket, although it knows that people who order two or four
19 tickets will likely drive together in one vehicle.
20
25.
HOB has regularly advertised ticket prices both in print and electronically. With
21 respect to print advertising, HOB clubs publish and distribute monthly calendars showing
22 scheduled concerts. Many such calendars advertise purported ticket prices, and only in small and
23 inconspicuous print state: "Tickets subject to all applicable facility fees and service charges.
24 Applicable fees and charges apply to all ticket sales." Such calendars fail to disclose that
25 consumers cannot purchase tickets for the advertised price, even at the club box office, where
26 HOB typically adds both a "facility fee" and a "service charge."
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26.
HOB also has regularly advertised its prices electronically, both through direct e-
28 mail solicitations, targeted at persons who are on its mailing list ("Members"), and through
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advertising on its web site. HOB's Internet advertisements fail to adequately disclose that a
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consumer cannot purchase tickets for the stated price, and cannot even do so through the
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advertising medium being used, the Internet.
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27.
Live Nation also advertises false and misleading concert ticket prices on its web
site and on Ticketmaster's web site, as well as through posters and other media.
28.
Live Nation regularly sends e-mails regarding upcoming concerts. Consumers
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who attempt to purchase tickets are directed either to a Live Nation or a Ticketmaster web page.
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Consumers are then quoted misleadingly lowball purported ticket prices and only after
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proceeding with the purchase process are advised of the various fees and charges imposed.
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29.
The Promoter Defendants and Ticketmaster use this convoluted and confusing
11 system of advertising to overcome consumer resistance and bait consumers with the lure of
12 advertised prices that are materially lower than the actual ticket prices. The scheme is furthered
13 by their use of other manipulative and deceptive techniques to induce consumers to purchase
14 tickets notwithstanding their additional charges, including: (a) the use of Internet-only sales and
15 presales; (b) limiting hours and/or availability oftickets at the box office; (c) the imposition of
16 short time limits on the consummation of Internet transactions, which do not allow consumers
17 adequate time to review or consider the fee disclosures and consider the true ticket price; (d)
18 falsely leading consumers to believe that many of the fees have external sources, such as building
19 or facility owners; and (e) in the case of sales through Ticketmaster, failing to disclose that a
20 material portion of Ticketmaster's charges are kicked back to The Promoter Defendants. Hence,
21 even if, by the completion of the purchase process, the consumer may have become aware ofthe
22 full cost for the tickets, the typical consumer has still been deceived as to what the additional
23 charges represent.
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30.
By advertising purported ticket prices that exclude the fees that they routinely tack
25 on, The Promoter Defendants advertise prices that they know are substantially lower than the
26 actual prices at which they intend to and normally do effectuate sales. For example:
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(a)
In late 2006, HOB advertised over the Internet the sale of2 for TU tickets
(available only online) to a number of upcoming concerts, including tickets to
a January 4,2007, concert by Blues Traveler at the House of Blues Club in
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San Diego for $23.00. That amount, however, did not include a $10.55 per
ticket service charge levied by HOB, resulting in an effective ticket price of
$33.55, a markup of 46% over the advertised price.
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(b)
In June 2007, HOB advertised over the Internet the sale of tickets to a June 27,
2007, True Colors Tour concert at the SDSU Open Air Theater in San Diego
for prices as low as $10.75 per ticket. That amount, however, did not include
an $8.15 per ticket convenience charge as well as a $3.35 order processing
charge levied by Ticketmaster when one attempted to purchase a ticket (in
addition to a $2.50 charge for electronic delivery). Hence, the actual price for
a ticket was $22.25, a markup of 107% over the advertised price.
(c)
In May 2008, HOB advertised over the Internet the sale of tickets to a July 11,
2008 concert by Toby Keith (presented by Live Nation) at the Cricket
Wireless Amphitheatre in Chula Vista. Ticket prices were listed as ranging
from $29.50-$69.50, with various specials including a "Four pack- 4 lawn
tickets for $69.00.
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When a consumer attempted to purchase the "Four pack" tickets on-line
(which is how they were advertised), Live Nation added on an $8.20
"convenience fee" per ticket, as well as a $3.40 Order fee. The total price was
$105.20, a mark-up of more than 50% over the advertised price.
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As with many of The Promoter Defendants' concerts, there was no way to
purchase tickets to the above-referenced Toby Keith concert for the advertised
prices. Even at the venue box office, which is located at a remote location
south of San Diego, Live Nation added on a $3.00 per ticket "convenience
charge." HOB Clubs also routinely add facility charges and/or service fees to
their advertised ticket prices, even if one goes to the box office.
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(d)
The Live Nation web site recently listed upcoming San Diego concerts, including
a Coldplay concert on July 16, 2009 at the Cricket Amphitheatre. When
consumers attempted to purchase tickets, they were redirected to Ticketmaster's
web site, which listed tickets ranging from $35.00 to $97.50. When you tried to
buy a $35.00 ticket, TICKETMASTER added (i) a building facility charge of
$8.10, (ii) a convenience charge of $1 0.85, and (Hi) an order processing charge of
$3.40. The total price came to $57.35, a mark up of64%.
(e)
A recent special promotion on the Live Nation web site advertised $7.11 tickets
on select lawn tickets, subject to availability. There were no such tickets available
at Cricket, but there were some at the Verizon Amphitheatre in Irvine. When one
attempted to purchase 2 tickets to an upcoming Nickelback concert, Live Nation
added on a $6.00 mandatory parking fee per ticket as well as a $6.25 "Ticket Fee"
per ticket. The total came to $19.36 per ticket, a mark-up of 172%.
(f)
A Live Nation poster recently advertised 4 tickets to a July 28, 2009 concert by
the Fray at the Cricket Amphitheatre for a total of$30.00 ($7.50 each). When
consumers attempted to purchase those tickets on-line, Live Nation added on a
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mandatory parking fee of$4.50 per ticket and a convenience fee of$7.80 per
ticket, as well as an Order Fee of$3.40. The total price for the four tickets came
to $82.60, a mark-up of 175% over the advertised price. Notably, for persons who
purchased regularly priced tickets to that very concert, Live Nation did not add on
a "parking fee." Nor does Live Nation normally charge for parking at that venue.
1
2
3
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(g)
Live Nation recently advertised $5 tickets to selected concerts on the front page of
US.A. Today for persons those who had purchased a $5 sub from Subway. When
consumers attempted to purchase such tickets to the Def Leppard concert at
Verizon Wireless Amphitheatre in Irvine, Live Nation added on a parking fee of
$6.00 per ticket and a "Ticket Fee" of$5.10 per ticket, resulting in a total price of
$16.10 per ticket, a mark up of222% over the advertised amount. Similarly, when
consumers attempted to purchase $5 tickets to the Lila Downs concert at the
House of Blues Club in San Diego, Live Nation added a convenience fee of$6.45
per ticket and an Order Fee of$3.85.
31.
All of the advertisements
5
6
7
8
9
10
referenced above contain The Promoter Defendants'
11
logos and reference or link the reader to The Promoter Defendants'
and/or Ticketmaster's
web
12
sites or telephone numbers, where tickets can only be purchased by paying the additional fees set
13
forth above. Notably, defendants often charge varying "convenience
fees" for different tickets to
14
the same concert, even though the "service" purportedly provided remains exactly the same.
15
That fact, coupled with the fact that defendants charge a separate processing fee, evidences the
16
reality that The Promoter Defendants'
and Ticketmaster's
convenience
fees are actually a markup
17
of the ticket price, not a true service charge.
18
32.
Despite the fact that the actual sales prices of their concert tickets are normally
19
from 15% to 50% higher than the nominal face amount, The Promoter Defendants'
routinely
20
advertise and promote tickets for sale at the lower face amount.
Although shipping fees may
21
vary depending on the type of delivel)' their customers request, the "convenience
fees," "service
22
charges," "facility/building
fees," and even the mandatory parking fees are a predetermined
part
23
of the ticket price. Hence, there is no legitimate reason for The Promoter Defendants not to
24
include such fees in the ticket prices they advertise or, at least, prominently
disclose the amount
25
of such fees when they advertise ticket prices.
26
33.
Pursuant to their agreement, Ticketmaster
pays secret rebates to The Promoter
27
Defendants in the form ofa kickback ofa substantial percentage of the fees that Ticketmaster
28
adds to the price ofthe tickets that it sells for them. On information and belief, Plaintiffs allege
11
1
that such secret rebates generally range from one-third to one-half of such fees, and on occasion
2
may exceed that percentage.
3
34.
The foregoing scheme enables The Promoter Defendants to charge and receive a
4
materially higher total ticket price than they could obtain if they honestly advertised ticket prices
5
that accurately set forth the total amount (other than reasonable delivery costs) they charge for
6
tickets. Consumers generally blame Ticketmaster for the imposition of convenience fees and
7
similar charges and do not understand that The Promoter Defendants have a contractual interest
8
in and financially benefit from such charges or that such charges are a de facto part of the ticket
9
price. By using these fees to advertise face prices that are substantially lower than their true
10 ticket prices, The Promoter Defendants circumvent consumer resistance to higher ticket prices
11 and are able to and do charge a higher amount than they otherwise could, thereby injuring
12 Plaintiffs and the Class. Ticketmaster's payment of substantial undisclosed kickbacks to The
13 Promoter Defendants from the fees it collects makes it difficult for other ticketing firms to
14 compete with Ticketmaster for the right to provide ticketing services and thereby tends to
15 entrench Ticketmaster's dominant position in the popular music ticketing business. Further,
16 Ticketmaster's payment of such kickbacks helps perpetuate The Promoter Defendants' unlawful
17 advertising. Ticketmaster and Live Nation have recently announced their intent to merge,
18 thereby ensuring a continuation of these unlawful practices.
CLASS ACTION ALLEGATIONS
19
20
35.
Pursuant to the provisions of the California Code of Civil Procedure Section 382
21 and California Civil Code Section 1781, Plaintiff brings this action on behalf of the following
22 class ("Class"):
23
24
25
26
27
28
All persons and entities in the State of California who purchased one or more
ticket( s) to one or more of the Promoter Defendants' concerts, either directly
from the Promoter Defendants or through Ticketmaster at any time :from
September 12, 2005 to the present and were charged more than the face amount
of the ticket.
Ticketmaster Subclass: Plaintiffs' claims against Ticketmaster are brought on
behalf of a subclass consisting solely of those members of the Class who
purchased tickets to one or more of the Promoter Defendants' concerts through
Ticketmaster.
12
1
36.
Excluded from the Class are: Defendants, their officers, directors, agents,
2
trustees, corporations,
3
joint venturers, or entities controlled by the Defendants;
4
Plaintiff's
5
Code § 1750, et seq.; the Judge assigned to this action, any member of the Judge's
6
immediate family; and counsel for Plaintiff
7
37.
trusts, representatives,
employees, principals, servants, partners,
business entities for purposes of
cause of action under the California Consumers Legal Remedies Act, Civil
Subject to additional information
obtained through further investigation
and
8
discovery, the Class defInition may be expanded or narrowed by amendment or amended
9
complaint.
10
38.
Numerositv:
- Code Civ. Proc. § 382; Civ. Code § 1781(b)(1).
II Subclass are so numerous that joinder of all members would be impracticable.
The Class and
Plaintiff estimates
12 that there are at least tens of thousands of Class members, who are geographically
dispersed
13 throughout the State of California.
14
IS
39.
Existence and Predominance
of Common Questions. - Code Civ. Proc. § 382;
Civ. Code § 1781 (b)(2). There are questions of law and fact common to the Class which
16 predominate
over any questions affecting only individual Class members.
Such common
17 questions include:
18
a.
Whether
The Promoter
Defendants
violated
California
law by
19 advertising inaccurate and unlawful prices for popular music concert tickets;
20
21
22
b.
Whether The Promoter Defendants violated California law by adding
confusing, deceptive, and unjustifIable
c.
fees to their advertised ticket prices;
Whether defendants violated the California Unfair Practices Act by
23
paying and accepting secret rebates and kickbacks in connection with the sale of popular
24
music concert tickets;
25
26
27
28
d.
Whether the payment of such secret rebates had a tendency to injure
competition in the market for ticketing services;
e.
Whether defendants' conduct caused damage to Plaintiff and members
of the Class, and the appropriate measure of such damages; and
13
f.
1
2
3
Whether
Plaintiff
and the members
of the Class are entitled to
equitable relief and the nature of any such relief.
40.
Defendants'
defenses, to the extent that any such defenses apply, are applicable
4
generally to Plaintiff and the entire Class and are not distinguishable
5
members.
6
41.
Typicality:
as to proposed Class
- Code Civ. Proc. § 382; Civ. Code § 1781(b)(3):
Plaintiff is a
7
member of the Class and her claims are typical of the claims of the Class. Plaintiff and all Class
8
members who purchased a concert ticket from one or more of the defendants paid the fees
9
challenged herein, and were injured by the same wrongful acts and practices alleged herein.
10
II
Adequacy:
42.
-Code
Civ. Proc. § 382; Civ. Code § 1781(b)(4).
Plaintiffwill
fairly
and adequately protect the interests of the Class and does not have interests that are antagonistic
12 to or in conflict with those she seeks to represent.
13 considerable
experience in the prosecution
Plaintiffhas
retained counsel who have
of consumer class actions and other complex
14 litigation, and Plaintiff intends to prosecute this action vigorously.
15
43.
Superiority:
- Code Civ. Proc. § 382. A class action is superior to other available
16 methods for the fair and efficient adjudication
of this controversy.
Such treatment will permit a
17 large number of similarly situated persons to prosecute their common claims in a single forum
18
simultaneously,
efficiently, and without the duplication of effort and expense that numerous
19 individual actions would engender.
Class treatment will also permit the adjudication
20
small claims by many Class members who could not afford to individually
21
claim against large corporate defendants.
22
management
23
adequate alternative exists for the fair and efficient adjudication
of relatively
litigate a complex
There are no difficulties likely to be encountered in the
of this case that would preclude its maintenance
24
44.
The proposed class is readily ascertainable
25
45.
Without class certification
as a class action, and no superior or
of this controversy.
from Defendants'
and determination
records.
of declaratory, injunctive, statutory
26
and other legal questions within the class format, prosecution of separate actions by individual
27
Class members will create the risk of: (a) inconsistent or varying adjudications
28
individual Class members which would establish incompatible
14
with respect to
standards of conduct for the
1
parties opposing the Class; or (b) adjudication
2
would as a practical matter be dispositive of interests of the other members not party to the
3
adjudication
4
46.
or substantially impair or impede their ability to protect their interest.
The parties opposing the Class have acted or refused to act on grounds generally
5
applicable to the Class, thereby making
6
a whole.
7
47.
with respect to individual Class members which
injunctive
relief appropriate with respect to the Class as
There is a community of interest in obtaining appropriate legal and equitable relief
8
for the statutory and common law violations and other misconduct,
9
compensation
for the damages and injuries which Defendants'
and in obtaining adequate
actions have inflicted upon
10 Plaintiff and the Class.
11
48.
Defendants benefited from the sale of concert tickets to Plaintiff and the Class,
12 and the benefit to Defendants can be identified from the sale and the monies received from the
13 ticket purchasers.
All or a portion of this benefit retained by Defendants is money in which
14 Plaintiff and the Class have an ownership interest.
15 fact and lost money as a result of Defendants'
16
conduct described herein.
FIRST CAUSE OF ACTION
17
18
Plaintiff and the Class have suffered injury in
(Against the Promoter
49.
Defendants
for Violations
Plaintiff realleges and hereby incorporates
of the False Advertising
Law)
all preceding paragraphs as if they were
19 fully set forth herein.
20
50.
The Promoter Defendants advertise concert tickets for sale at prices that are
21
materially less than the actual price for which consumers typically purchase those tickets, when
22
all of the required fees and charges are included.
23
charges are a de facto part of the actual ticket price, could easily be calculated in advance, and
24
should have been included in the advertised price.
25
51.
Except for the delivery charge, such fees and
Cal. Bus. & Prof. Code § 17500 makes unlawful the practice of false advertising,
26
which specifically includes advertising goods or services "with the intent not to sell such
27
personal property or services ... at the price stated therein, or as so advertised."
28
15
1
2
3
52.
Defendants
HOB's and Live Nation's
Cal. Bus. & Prof. Code § 17509 provides that "any advertisement,
53.
advertisement
5
combination
6
product or service, or any combination
7
the price of all those products or services."
9
constitute false advertising
in that the Promoter Defendants do not expect or intend to sell tickets at the advertised prices.
4
8
advertisements
54.
including any
over the Internet, soliciting the purchase or lease of a product or service, or any
thereof, that requires, as a condition of sale, the purchase or lease of a different
thereof, shall conspicuously
advertisements
disclose in the advertisement
are unlawful in that The Promoter
Defendants routinely advertise concert ticket prices without disclosing in those advertisements
10 the price of required "convenience
fees," "service charges,""facility
fees," parking fees, and other
11 fees in violation of section 17509.
12
55.
deceptive and unlawful advertising was intended to
13 and did in fact cause Plaintiff and the Class to expend money that they otherwise would not have
14 expended.
Defendants'
15 engaging in transactions
materially false advertised prices "baited" Plaintiff and the Class into
that they would otherwise not have consummated
and/or paying more
16 for concert tickets than they intended to pay.
17
56.
By separating their true ticket prices into a nominal advertised price and an
18 assortment of separate "fees" and "charges," which mislead Plaintiff and the Class as to the
19 actual ticket prices, The Promoter Defendants are able to and do charge higher total ticket prices
20
than they could have had they honestly advertised the full prices of their tickets.
21
Class have lost money and suffered financial injmy as a result of Defendants'
22
advertising practices.
23
57.
injunction against defendants'
25
all Class members, and such other relief as may be deemed appropriate.
false advertising practices, an award of restitution to Plaintiff and
26
SECOND CAUSE OF ACTION
27
(Against All Defendants for Unlawful Rebates in
Violation of Cal. Bus. & Prof. Code §§ 17000, et seq.)
58.
deceptive
Pursuant to Cal. Bus. & Prof. Code § 17535, Plaintiff seeks the entry of an
24
28
Plaintiff and the
16
1
2
fully set forth herein.
59.
Ticketmaster provides ticketing services to The Promoter Defendants, pursuant to
3
which it acts as their agent in connection with the sale of the great majority of tickets sold to The
4
Promoter Defendants' concerts. Ticketmaster generally does not purchase those tickets but
5
rather acts in concert and collusion with The Promoter Defendants in selling those tickets.
6
60.
Pursuant to an agreement between Ticketmaster and the Promoter Defendants, the
7
terms of which they conceal from the public, Ticketrnaster adds substantial convenience fees and
8
other charges to all or the vast majority of tickets it sells to their concerts. Those fees are
9
identified as Ticketmaster charges and paid by consumers to Ticketmaster.
10
61.
Ticketmaster pays substantial secret rebates and allowances to The Promoter
11 Defendants from the charges that it imposes on consumers in connection with its sale oftickets to
12 The Promoter Defendants' concerts. Defendants have kept the terms of their agreement and the
13 amount of those payments secret, and they do not disclose to consumers the fact of such
14 payments. Plaintiff was unaware of such payments and the great majority of ticket purchasers are
15 unaware of the existence of such payments.
16
62.
Through its practice of making such secret payments, Ticketrnaster has entrenched
17 itself as the dominant entity in the concert ticketing business. Its practice of making these
18 payments to The Promoter Defendants and others injures Ticketmaster's competitors, as well as
19 Plaintiff and the Class, and tends to destroy competition in the market for ticketing services. Doe
20 defendants 1-20 assisted The Promoter Defendants and Ticketmaster in planning and
21 implementing this unlawful conduct.
22
63.
Pursuant to Cal. Bus. & Prof. Code § 17070, Plaintiff and the Class seek the entry
23 of an injunction against defendants' unlawful practices, restitution to Plaintiff and the Class, and
24 such other relief as may be appropriate.
25
26
27
28
THIRD CAUSE OF ACTION
(Against All Defendants for Violation of the
Consumers Legal Remedies Act, Cal. Civil Code § 1750 et seq. ("CLRA"»
64.
Plaintiffrealleges and hereby incorporates all preceding paragraphs as if they were
17
1
2
3
65.
Defendants are "persons" within the meaning of Civil Code section 1761 (c) and
66.
Plaintiff and the Class are "consumers"
1770.
4
within the meaning of Civil Code sections
5
1761(d) and 1770.
6
67.
7
8
The subject tickets are "goods" within the meaning of Civil Code section 1761(a)
and 1770.
68.
9
Plaintiff's
and the Class' purchases of concert tickets constitute "transactions"
10 within the meaning of Civil Code sections 1761(e) and 1770.
69.
11
Defendants'
acts, practices, representations,
12 with respect to the promotion, marketing, distribution,
13
omissions, and courses of conduct
and sale of concert tickets violate section
1770 of the CLRA in that:
In violation of section 1770(a)(5) of the CLRA, Defendants "represent(ed]
14
a)
15
that goods ... have sponsorship,
16
benefits, or quantities which they do not have;"
17
b)
18
goods with the intent not to sell them as advertised";
19
c)
20
"represented that the transactions
21
representation
70.
22
approval, characteristics,
ingredients, uses,
In violation of section 1770( a)(9) of the CLRA, Defendants "advertised
and
In violation of section 1770(a)(16) of the CLRA, Defendants
were supplied in accordance with a previous
when they were not."
Defendants engaged in these unfair and/or deceptive acts and practices with the
23
intent that they result, and which did result, in the sale of the concert tickets to Plaintiff and the
24
Class.
25
26
27
28
71.
Defendants'
service fees and convenience
fees are unreasonable
and
unconscionable.
72.
Plaintiff has been injured by the foregoing deceptive practices in that defendants
bait consumers into purchasing tickets from them by advertising artificially low prices and
18
1
thereafter imposing an array of deceptive charges, which they falsely portray as legitimate
2
additional fees rather than part of the ticket price; and, in the case of tickets sold by Ticketmaster,
3
concealing the kickback that Ticketmaster
4
disclose that the fees are inflated to pay that kickback.
5
defendants to charge a higher total price for the tickets they sell than they could obtain if they
6
honestly advertised true ticket prices and did not impose such deceptive additional charges or pay
7
such kickbacks.
8
unconscionable
9
10
imposition of
fees and charges.
provided written notice to defendants pursuant to Civil Code section
1782(a), and will amend this cause of action to add claims for damages under the CLRA if
11 defendants fail to take timely and appropriate
12
These deceptive practices enable
Plaintiff and the Class have also been injured by defendants'
Plaintiffhas
73.
pays to The Promoter Defendants and failing to
corrective action. Pursuant to Sections 1770 and
1780 of the Civil Code, Plaintiff seeks an injunction against defendants'
unfair and unlawful
13 practices and such other relief as shall be appropriate.
14
15
FOURTH CAUSE OF ACTION
(Against All Defendants for Violations of CaI. Bus. & Prof. Code §17200, et seq.)
16
17
74.
18 fully set forth herein.
19
20
21
The Promoter Defendants have engaged in unlawful business practices in
75.
violation ofCal. Bus. & Prof. Code §§ 17500, 17045, 17048 and Cal. Civil Code §§ 1750 et seq.
All defendants have engaged in unfair business practices in connection with their
76.
22
advertisement
23
the Unfair Competition Law and False Advertising
24
conduct, if any, is outweighed by the harm it causes to Plaintiff and the Class. In addition,
25
defendants have engaged in unfair business practices by charging unconscionable
26
services they purportedly provide.
27
28
77.
defendants'
of and sale of concert tickets in that such conduct violates the letter and spirit of
Law. Moreover, the utility of defendants'
prices for the
Plaintiff and the Class have been lost money and were injured by and as a result of
unfair and unlawful practices.
19
1
78.
Pursuant to Cal. Bus. & Prof. Code §§ 17200 and 17203, Plaintiff seeks an
2
injunction against defendants'
3
and the Class, and such other relief as may be deemed appropriate.
4
(Against all Defendants For Unjust Enrichment)
6
79.
Plaintiffrealleges
and hereby incorporates all preceding paragraphs as if they were
8
9
to Plaintiff
FIFTH CAUSE OF ACTION
5
7
unfair and unlawful practices, an award ofrestitution
80.
By engaging in the conduct described in this Complaint, Defendants have been
unjustly enriched at the expense of Plaintiff and the Class by their sale of concert tickets, by the
lOuse
of false advertising, and by engaging in the unfair, unlawful, fraudulent and deceptive
11 conduct described above.
12
81.
As a proximate result, Defendants have obtained revenues by which they became
13 unjustly enriched at the expense of Plaintiff and the Class.
14
82.
Defendants were aware and had knowledge ofthe benefit they were receiving as a
15 result of their wrongful acts and omissions, as hereinabove alleged, and have enjoyed the benefit
16 of their [mancial gains, to the detriment and expense of Plaintiff and the Class.
17
83.
18 Defendants
Under the circumstances
alleged herein, it would be unfair and inequitable for
to retain the profits they have unjustly obtained at the expense of the Plaintiff and the
19 Class.
20
84.
Accordingly, Plaintiff seeks an order establishing Defendants as constructive
21
trustees of the profits that served to unjustly enrich them, together with interest during the period
22
in which Defendants have retained such funds, and requiring Defendants to disgorge those funds
23
to Plaintiff and members of the proposed class in a manner to be determined by the Court.
24
25
PRAYER FOR RELIEF
WHEREFORE,
Plaintiff prays that this Court enter judgment on her behalf against all
26 defendants, jointly and severally, as follows:
27
28
(a)
Finding that this action may be maintained as a class action under Cal. Code Civ.
Proc. § 382 and CaI. Civ. Code § 1781, certifying Plaintiff as representative
20
of the Class, and
1
designating her counsel as counsel for the Class;
2
(b)
Granting Plaintiff and the Class appropriate injunctive relief;
3
(c)
Requiring the Defendants to make full restitution of all monies wrongfully
4
5
6
7
8
acquired by them, pursuant to Cal. Bus. & Prof Code §§ 17203 and 17535;
(d)
Awarding Plaintiff and the Class the costs of prosecuting this action, including
reasonable attorneys' fees and other costs; and
(e)
Granting such other and further relief as the Court may deem just and proper
under the circumstances.
9
10
11
DEMAND FOR JURY TRIAL
Plaintiff demands a trial by jury on all claims so triable.
Respectfully submitted,
Dated: September 11, 2009
12
WEXLER WALLACE LLP
13
14
By:
~~--
15
16
17
18
19
20
21
22
23
Ian J. Barlow
455 Capitol Mall, Suite 231
Sacramento, California 95814
Telephone: (916) 492-1100
Facsimile: (916) 492-1124
Ralph B. Kalfayan
David B. Zlotnick
KRAUSE KALFAY AN BENINK & SLAVENS,
LLP
625 Broadway, Suite 635
San Diego, California 92101
Telephone: (619) 232-0331
Facsimile: (619) 232-4019
Attorneys for Plaintiff Kelly Koch
24
25
26
27
28
21
DECLARATION OF KELLY KOCH
PURSUANT TO CALIFORIA CIVIL CODE § 1780(d)
2
3
4
5
6
7
I Kelly Koch, declare as follows:
1.
I submit this declaration pursuant to section 1780(d) of the California Civil Code.
I have personal knowledge of the matters set forth below and if called as a witness could and
would be competent to testify thereto.
2.
Defendants HOB Entertainment, Inc., Live Nation, Inc. and Ticketmaster are
8
Delaware corporations.
9
Ticketmaster all have their principal places of business in Los Angeles County, California.
10
Defendants HOB Entertainment, Inc., Live Nation, Inc., and
I declare under penalty of perjury under the laws of the State of Cali fomi a that the
] I foregoing is true and correct and that this declaration was executed on September] 0, 2009 in San
12 Diego, California.
13
]4
15
16
]7
18
]9
20
21
22
23
24
25
26
27
28

CPY Document Title - Wexler Wallace LLP

Transcription

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