Secondary ticketing site StubHub has asked a federal judge to end a lawsuit where the company is accused of racketeering.
According to Legal Newsline, Spotlight Ticket Management Inc. filed a complaint in the U.S. District Court for the Central District of California Western Division against StubHub and Awin Global Affiliate Network, alleging that the secondary site had committed common law fraud, tortious interference, violation of the federal RICO statue, breach of contract, unjust enrichment, and violation of California law. Spotlight says that StubHub ran a “years-long campaign” to “under report and misrepresent commisionallable transactions.”
Additionally, Spotlight claims that it directed more than $84 million in sales to StubHub and the secondary site interfered with its contract with American Express.
StubHub filed a motion on February 18, saying that Spotlight’s lawsuit “contorts a straightforward business dispute into a sprawling 344 paragraphs including unsupported claims under the RICO statue.” The company is asking Judge Percy Anderson to dismiss the complaint with prejudice, noting that Spotlight’s complaint fails to offer sufficient details to support allegations StubHub and Awin worked together to underreport commissionable sales and said evidence shows both companies were pursuing economic interests. Additionally, StubHub said the complaint should be dismissed for failing to meet standards of RICO claims.
Moreover, Spotlight’s claims should be dismissed for a lack of specific details, StubHub says, noting that they are “alleging any facts to identify what commissions it purportedly did not receive, what market share it purportedly lost and whether the AmEx relationship actually changed as a direct and proximate result of this scheme.”
“At most, Spotlight alleges only a single ongoing predicate act based on statements and omissions StubHub purportedly made to Spotlight concerning its affiliate sales transactions, and although that allegation involves multiple wire communications, it still covers a single business condition and ‘does not establish a RICO pattern,'” StubHub said.
Currently, StubHub is being represented by lawyers Crowell & Moring in San Francisco and Los Angeles, while Spotlight is represented by Ann Mortimer and Jason Kim of Hunton Andrews Kurth LLP in Los Angeles.
Earlier this year, StubHub was fined $1.3 million by the Canadian Competition Bureau after an investigation by the Bureau found that the ticketing site had advertised tickets on their website and mobile app, as well as promotional emails to Canadians, for unattainable prices. Consumers were unable to see the mandatory fees on tickets until they clicked or tapped on a filter to see the price inclusive of fees, which would only be revealed during the final stage of checkout process. In some cases, ticket buyers were still told to pay more than the original, filtered price showed.
Now, StubHub has agreed to ensure that prices for tickets to events in Canada will include all mandatory fees throughout the entire ticket purchasing process and a compliance program has been established to implement new procedures that comply with the law.
In February, Viagogo announced that it had completed its $4 billion acquisition of StubHub, officially reuniting CEO Eric Baker with the California-based resale giant he co-founded while in graduate school.
