Brooklyn Nets Hit with Class Action After Allegedly Canceling Consumer’s Season Tickets Due to Resales [UPDATE]

The NBA’s Brooklyn Nets have been hit with a proposed class action lawsuit from a consumer who alleges his season ticket membership was unlawfully canceled by the team due to his resale of tickets to certain games.

The 21-page lawsuit charges that the Nets’ cancellation of the plaintiff’s season ticket plan speaks to a larger pattern and practice of the team and affiliate BSE Global’s systematic termination of season ticket memberships held by consumers who exercise their right to re-sell certain tickets. The team, the case alleges, engages in this “unlawful and predatory practice” in an attempt to “destroy the ability of season ticket holders to re-sell Brooklyn Nets tickets” and to squash competition in the re-sale market.

More broadly, the Nets’ apparent goal behind its alleged elimination of season ticket resales is to, as the lawsuit tells it, funnel such transactions to its preferred ticket broker and profit-sharing partner: non-party Dynasty Sports & Entertainment, the co-founder and former long-time president of which the suit says currently serves as BSE’s Senior Vice President.

“Defendant essentially seeks to create a monopoly over the resale of Brooklyn Nets tickets,” the plaintiff argues, “which serves to raise the prices that ticket purchasers pay for Brooklyn Nets tickets.”

New York’s Arts and Cultural Affairs Law

Central to the plaintiff’s allegations is the New York Arts and Cultural Affairs Law (ACAL), a 2007 statute that the lawsuit notes created a free ticket resale market for sports and arts events in the state. Crucially, the ACAL prohibits venues from revoking a consumer’s season tickets based solely on the individual’s resale of those tickets and protects the right of resale at any price and through any legal avenue.

While the ACAL provides that certain entities that re-sell tickets must obtain a license from the State of New York to do so, the law expressly exempts from that mandate any person, firm or corporation who buys tickets solely for their own use or the use of their invitees, employees and agents. Further still, though the Brooklyn Nets retain certain revocation rights with regard to individual season ticket memberships, the case stresses that the ACAL bars the team from “exercising those rights arbitrarily or capriciously.”

No license necessary, lawsuit argues

The plaintiff, who the suit says has spent “more than $225,000” on Nets season tickets since 2012, claims that roughly two weeks after the team confirmed it had received his signed season ticket renewal agreement, he was sent an email from a BSE employee informing him that his resale of tickets constituted a supposed violation of state law.

“It has recently come to our attention that you have sold tickets in violation of New York law by reselling your Brooklyn Nets season tickets without a New York Ticket Reseller License,” the email reportedly read, requesting that the plaintiff mail or email the team “a copy of your New York Ticket Reseller License” for the 2018-2019 season within five business days.

Later in the email, the complaint says, the team stressed that it reserved the right to terminate the plaintiff’s season ticket agreement, as well as seek any relief to which it may be entitled, should he fail to produce a state-granted re-seller license.

Conceding that the plaintiff has, in fact, re-sold tickets obtained through his season membership with the Brooklyn Nets, the lawsuit puts forth that those sales were protected under the ACAL and that no requirement existed for the man to obtain a re-seller license from New York State. When the plaintiff responded to the Nets’ demand that he produce a ticket re-seller license or possibly face consequences, he informed the team that he’s “a huge Nets fan” who uses his tickets for personal use and to, from time to time, entertain customers and clients for his personally owned business.

According to the lawsuit, the plaintiff informed the Nets that the tickets he re-sold were for games that neither he nor his clients could attend. Those tickets, the plaintiff said in his email, “are given to a professional ticket broker, who is fully licensed, to sell.” Less than 30 minutes after providing the team with the name of the ticket broker and the individual’s state license number, the plaintiff, the case says, received grim news:

“A thinly veiled and meritless pretext”

The lawsuit scathes that the team’s reasoning for terminating the plaintiff’s season ticket agreement was no more than “a thinly veiled and meritless pretext” for its violation of New York’s ACAL:

Indeed, Named Plaintiff was expressly entitled under ACAL to resell his tickets without his own ticket license, and the ticket license of the broker who later resold Named Plaintiff tickets is irrelevant because Named Plaintiff did not use that license to sell his tickets.”

What’s more, the lawsuit stresses that the Brooklyn Nets have unlawfully terminated the season ticket memberships of a number of other ticketholders as well, all in an attempt to prevent the individuals from exercising their resale rights. The case goes so far as to surmise that the defendant’s hostility toward season ticket holders is meant as a warning to anyone else looking to offload some game tickets.

“These abrasive attacks on Brooklyn Nets season ticket holders are designed not only to unlawfully terminate Memberships,” the lawsuit scathes, “but also to send the chilling message to other season tickets holders or potential season ticket holders that they risk the unlawful termination of their Memberships in the event they seek to exercise their protected ticket resale rights.”

One hand washes the other?

Underlying the alleged conduct described above is the apparent “close insider relationship” and profit-sharing partnership between the Nets and non-party Dynasty Sports & Entertainment. According to the lawsuit, the Nets, since as early as 2015, has diverted to Dynasty “thousands” of tickets for resale, in apparent contradiction to the team’s “own policy of limiting every other season ticket holder to four tickets each.” Worse, the suit claims, the Nets and Dynasty are party to long-term deals that allow the ticket broker to sell (emphasis from the complaint) “more than four thousand Brooklyn Nets tickets per game (over 25% of the entire capacity of the Barclays Center), and maybe more.” Given the profit-sharing between the two, the case theorizes, the Nets are more than motivated to maximize Dynasty’s ticket stock and re-sale prices.

From the plaintiff’s viewpoint, the reported hand-in-glove relationship between the Brooklyn Nets and Dynasty Sports & Entertainment has allowed the entities to rake in big money on the backs of fans.

“In undertaking the above-described conduct, Defendant is trying to destroy the ability of season ticket holders and brokers to participate in the lawful sale of Brooklyn Nets tickets, and instead to allow Defendant and Dynasty to collude to monopolize the market for Brooklyn Nets tickets so that Defendant can reap as much profit as possible, at the expense of consumers and competition in the market,” the lawsuit alleges.

Initially filed in Kings County Supreme Court, the lawsuit has been removed to New York’s Eastern District. The case can be read below.