The legal maneuvering continues in the three-year-old lawsuit by the New England Patriots against StubHub, as the secondary ticketing company was reportedly dealt a blow recently to one of its arguments.
StubHub unsuccessfully tried to argue that it should not be held responsible for the actions of its users under Section 230 of the landmark Communications Decency Act. The company was seeking a partial summary judgment that would have gone a long way to thwarting the Patriots’ efforts to paint the secondary ticket company as partly liable for users buying and selling the teams’ tickets. StubHub claims it does not sell tickets itself, the company simply created a forum for others to buy or sell tickets.
The former Super Bowl Champions sued the secondary ticketing giant for facilitating the resale of Patriots tickets on the StubHub Web site, which the team has said it prohibits. The team claims its season ticket holder policy, and Massachusetts’ anti-scalping laws, do not allow for the resale of tickets. Some Massachusetts legislators have sought to have the state law repealed, which limits resold ticket prices to $2 above face value, but the proposed bill remains in limbo.
Last summer, StubHub announced it had exhausted its appeals and was complying with a court ruling requiring it to turn over thousands of names of brokers and individuals who were buying or selling Patriots tickets. However, the Patriots have not disclosed what it intends to do with those names.
The Patriots’s Boston, MA-based attorney, Daniel Goldberg of Bingham McCutchen LLP did not respond to questions about the case. StubHub declined to comment on the case, stating that it was in the discovery phase and still pending.
According to attorney and legal scholar David Ardia of the Citizen Media Law Project, the court dismissed the Section 230 immunity argument because it does not think it applies to “interactive computer service providers,” such as StubHub, that may have materially contributed to alleged illegal conduct. In this case, the Massachusetts anti-scalping law.
StubHub has also said it should be treated the same as newspaper want-ads, but the court also rejected that argument because want-ads charge fixed advertising rates, not based on sales, nor do they help to sell items for increased costs, according to Ardia. StubHub does not require users to set ticket prices above face value, nor did the court allegedly offer evidence that StubHub materially contributed to wrongful acts.
“This is a troubling interpretation for Section 230, and has broad implications for online platforms and social networking sites – not just ticket exchanges,” Braden Cox, research and policy counsel for Internet advocacy group NetChoice, told TicketNews. Cox will be among the panelists discussing legal issues this July at Ticket Summit Las Vegas, the ticket industry trade show and conference hosted by TicketNews’s parent company TicketNetwork.
“The court is sending a message that online sites should be the enforcer of private contracts to which they are not a party. This is an added obligation and potential liability that threatens the stated intend of Section 230, ‘to promote the continued development of the Internet and other interactive computer services and other interactive media’,” he added.