Judge: State law applies
Posted on Thursday, November 20, 2008
A Connecticut ticket broker is subject to Arkansas law over its involvement in the sale of Hannah Montana concert tickets last year, a Pulaski County circuit judge ruled Wednesday.
But Judge Timothy Fox questioned the extent of the authority that the Arkansas Deceptive Trade Practices Act gives the state attorney general’s office to investigate irregularities in ticket sales. He gave deputy attorney general Jim DePriest a month to present him with more case law bolstering the agency’s position.
The attorney general’s office announced in October 2007, almost two months before the concert, that it was investigating five online-ticket companies after receiving widespread complaints about how quickly the Dec. 1 Miley Cyrus / Hannah Montana Best of Both Worlds tour sold out at Alltel Arena in North Little Rock.
In March, state attorneys sued Ticket Software LLC to force the company to obey a demand to disclose its clientele to investigators. State attorneys on Wednesday emphasized that they had no suspicions of any wrongdoing by Ticket Software but need to see who is selling tickets on the Web site as they investigate complaints by Cyrus’ management and Ticketmaster, who had the exclusive license to sell tickets.
The company, which also does business as Ticketliquidator. com and Ticket Network, refused the demand, saying the trade-practices statute, Arkansas Code Annotated 4-88-101, doesn’t apply because Ticket Software is in another state and doesn’t do enough business in Arkansas to fall under state law.
The company’s attorney, Gregory Jones of Little Rock, told the judge that Ticket Soft- ware has cooperated extensively with the attorney general’s office, but drew the line when the agency asked for the names of clients, information it considers a trade secret.
He argued that Ticket Software is a broker who connects buyers with sellers, saying case law shows that a business has to do more than run a Web site to be considered doing business in Arkansas.
He also argued that state attorneys were improperly applying the trade-practices law, which he said could only be used against lawbreakers. His client could only be considered a witness because the company doesn’t buy or sell tickets, Jones said.
But Fox almost immediately rejected the claim that Ticket Software is out of the court’s jurisdiction during an hour-long hearing on a motion by the ticket company. In refusing to quash the attorney general’s demand, the judge pointed out that the company’s Web site appears to act as more than just a benign processor between ticket buyers and sellers because it guarantees ticket delivery and vets its ticket sellers.
But in a line of questioning that seemed to surprise DePriest, the judge was more interested in questioning state attorneys’ level of authority under the deceptive trade act.
Under the plain reading of the law, the statute bans practices that are both deceptive and “unconscionable,” the judge said, emphasizing the “and” written into the statute. Fox suggested that the state’s criminal scalping law, which regulates ticket sales for music and athletic events, might be the more appropriate law to follow.
The Arkansas Supreme Court has ruled that infractions can be one or the other to fall under the statute, DePriest said.
His agency began its inquiry, DePriest said, after complaints from Alltel Arena, Cyrus and Ticketmaster that someone had subverted Ticketmaster’s security system, set up to ensure the fair sale of tickets, by using software “to move themselves to the front of the line and push others to the back of the line.”
Some sellers advertised tickets before they went on sale, DePriest said, and some sellers canceled sales at high prices so they could raise prices more.
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