A Massachusetts man has filed a class action lawsuit against Ticketmaster Entertainment and its secondary ticket market subsidiary TicketsNow for allegedly defrauding purchasers of Phish tickets by redirecting them from less expensive tickets on Ticketmaster’s Web site to more expensive ones on TicketsNow.

The lawsuit filed by John O’Hurley in U.S. District Court in Massachusetts marks the third such lawsuit filed against the two ticketing giants, following suits in New Jersey involving how the companies handled sales of Bruce Springsteen tickets and The Dead tickets. Like the other two lawsuits, the Phish suit seeks class action status, but it exempts fans who were part of a non-lawsuit settlement reached between Ticketmaster and New Jersey Attorney General Anne Milgram over complaints concerning the Springsteen onsale. Ticketmaster did not admit any wrongdoing in relation to the settlement with Milgram.

The lawsuits represent more negative news for Ticketmaster as it seeks federal regulatory approval for its proposed $2.5 billion merger with Live Nation.

At issue in all three lawsuits is the way Ticketmaster was allegedly shuttling ticket buyers from its Web site when tickets were apparently sold out, over to the TicketsNow broker Web site, which resells tickets for a premium. Under the direction of former President and CEO Sean Moriarty, who left the company this year, Ticketmaster bought TicketsNow in early 2008 for about $265 million and was criticized almost immediately for allegedly redirecting fans from Ticketmaster to TicketsNow.

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The latest lawsuit states:

Through agreements with venues artists and/or event promoters, Ticketmaster obtains (usually exclusive) rights to sell tickets to sporting, music, and other entertainment events. These tickets are sold on their website, www.ticketmaster.com. When tickets are scheduled to go on sale, customers typically log into the Ticketmaster website and purchase the desired tickets. However, Ticketmaster has engaged in a practice whereby large quantities of tickets, usually the most desirable tickets, are sold, redirected or otherwise conveyed by express or implicit agreement to TicketsNow.com, which charges ticket purchasers more than face value for tickets, sometimes up to thousands of dollars more than face value.

The result is that, within minutes or even seconds of tickets going on sale at Ticketmaster, purchasers are informed that tickets to an event are sold out or otherwise unavailable. These individuals are then rerouted directly from Ticketmaster’s website to TicketsNow.com. The format and layout of the two webpages are purposely similar to conceal that TicketsNow is a separate entity, which sells tickets on the secondary market and at above face value. In fact, TicketsNow expressly identifies itself as a Ticketmaster company. Consequently, customers redirected to TicketsNow believe that they are purchasing tickets at face value directly from Ticketmaster.

This artificial manipulation of the market price for tickets results in purchasers having no choice but to pay grossly inflated prices for tickets, just minutes after the tickets first become available to the public..

O’Hurley claims he tried in late January to buy two Phish tickets from Ticketmaster, but was redirected to TicketsNow where he bought two tickets for a total of $455.40. When his confirmation email arrived, however, it said he had bought nine tickets for a total of $2,064.25. The tickets carried a face value of $60 each.

The two companies have maintained, according to the lawsuit, that they “don’t divert tickets from Ticketmaster and list them for resale on TicketsNow. This simply does not happen.” Yet, the two have repeatedly done just the opposite.

In a twist, new Ticketmaster CEO Irving Azoff has slammed the secondary market as being a major part of the problem with the overall ticketing industry, and he said he would consider selling TicketsNow.

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The lawsuit claims that the two companies’ “misrepresentations and inaccurate statements lead consumers to believe that tickets are being offered on TicketsNow only when there are no tickets remaining or available in the primary ticket market and, further, that there is no common interest between Ticketmaster and TicketsNow in moving tickets to the secondary ticket market. Individual purchasers are therefore misled to purchase more expensive tickets on the TicketsNow website as the only available option.”