The Ticket Reserve, Inc., which operates the ticket futures business FirstDIBZ, successfully won a dismissal in a U.S. District Court of most of the allegations in a class action lawsuit lodged by angry customers who claimed the company defrauded them out of thousands of dollars following a massive scam.
In a 22-page decision handed down late last week, Northern Illinois District Court Judge Rebecca R. Pallmeyer wrote that plaintiffs Andrew Duffy, George Adams, Gregg Harder, Christopher Jackman, Jason Lee, Jose Ordaz, Vincent Ruggiero, Sohail Shah and the class they represented essentially did not prove that the company was entirely liable for the scam that nearly wrecked it.
Beginning in late 2008, both FirstDIBZ and hundreds of customers fell victim to an alleged scam involving the fraudulent sale of Super Bowl “dibz,” or options for tickets that the original seller did not possess. Those fraudulent dibz were resold over and over, and once they were discovered, the company was forced to cancel hundreds of orders. The customers were out hundreds of thousands of dollars, and the company claimed the fraud cost it more than $1 million.
Pallmeyer found that language in the company’s contracts and disclaimers with customers protected it in the event of situations such as the fraud.
“The disclaimer can be reasonably construed in conjunction with the integrated terms of the User Guide, which state inter alia: ‘One DIBZ guarantees one face-value ticket’ and ‘You can sell your DIBZ to other fans of your team at any point during the season.’ Those provisions provide the holders of genuine DIBZ with access to certain rights (i.e. selling or trading); they do not make any warranties about the security of the website, nor do they guarantee that every DIBZ transacted on its website is genuine,” Pallmeyer wrote.
Attempts to reach executives with The Ticket Reserve for comment were unsuccessful. Chicago attorney Dan Edelman, of Edelman, Combs, Latturner & Goodwin, LLC, represented the plaintiffs, but he also did not immediately return a message seeking comment.
In its contracts with customers concerning dibz purchases, the company stated, “TTR stands responsible for the authenticity of Listings registered on FirstDIBZ. However, delivery of Listings is the sole responsibility of the underlying supplier. Where delivery of a Listing is refused, prevented, hindered, delayed or otherwise made impractical beyond FirstDlBZ’s reasonable control and such occurrence cannot be overcome by reasonable diligence and without unusual expense, FirstDIBZ shall be excused from delivery and have the right, but not the obligation, to compensate the DIBZ holder at the close of the market with a payment equal to 125% of the average trading price of the last ten trades immediately prior to market closing for that DIBZ marketplace. Notwithstanding the foregoing, in no event shall FirstDlBZ refund a user less than what they paid for the DIBZ should delivery of the tickets not occur.”
The company sought to negotiate settlements with the defrauded customers, and some customers are believed to still be awaiting their money.
Pallmeyer granted The Ticket Reserve’s motion to dismiss the claims that the company failed to prevent specific fraudulent transactions and other related fraud allegations, but the judge did not dismiss a breach of contract allegation that the company improperly withheld online account funds, and the plaintiffs can amend their complaints and re-file some of their allegations.
The Ticket Reserve, despite the rocky patch during the scam, continues to operate and recently reemerged as the ticket futures platform provider for Major League Baseball’s new ticket reservations initiative. Following the Super Bowl fiasco, the company instituted improved safeguards to protect fans from future frauds.