Fraud case against Wolves heads to court
MINNEAPOLIS -- The law firm representing two Timberwolves season-ticket holders will tell a Hennepin County District Court judge on Tuesday that their plaintiffs were victims of consumer fraud as a result of the team's ticketing policy.
MINNEAPOLIS -- The law firm representing two Timberwolves season-ticket holders will tell a Hennepin County District Court judge on Tuesday that their plaintiffs were victims of consumer fraud as a result of the team’s ticketing policy.
Lawyers for the Timberwolves will follow with a motion to dismiss that claim and an antitrust allegation, or send the case to an arbitration court.
The case centers on the Wolves’ introduction last season of Flash Seats, a digital ticketing system that has limited fans’ options when reselling their tickets.
Plaintiffs James Mattson and GLS Companies filed the suit March 3, claiming they paid a combined $53,000 for season tickets. They are seeking unspecified damages.
After Tuesday’s oral arguments, Judge Ronald Abrams is expected to file a formal opinion on the case at a later date. The lawsuit also could be certified as a class-action case, which would grow the number of season-ticket holder plaintiffs and the amount for potential damages.
“This is a simple case of bait and switch,” the plaintiffs’ court documents read.
The plaintiffs claim the Timberwolves did not mention the change to Flash Seats when season-ticket holders were asked in February 2015 to renew their packages for the 2015-16 season. They allege use of Flash Seats started in July 2015 after five months of payments.
GLS Companies, for instance, was paying monthly installments of $2,666 for its tickets.
“The case clearly has some intuitive appeal from a consumer fraud standpoint,” said Prentiss Cox, associate law professor at the University of Minnesota. “The reason … is that they, the Wolves, have been alleged to have changed their ticketing procedures in a way that makes it harder for fans to obtain the full value of the ticket when they don’t want to use some of the season tickets they have.”
With Flash Seats, the Wolves for the first time in 25 years of operations eliminated the use of paper tickets. They also added fees and set a resale price minimum - 75 percent of the ticket’s face value, the lawsuit claims.
In addition, season-ticket holders were required to download the Flash Seats smartphone app or use a desktop computer to access their tickets. Those without the same software could not use the tickets, limiting the resale market, the suit claims.
“Unilateral changes eliminated paper tickets and imposed severe transfer restrictions to which plaintiffs never agreed,” court documents read.
Cox said the scope of the lawsuit is limited. “The suit is really about the one year’s worth of season tickets, and the question is did the Wolves fully disclose (the changes)?” he said.
The plaintiffs’ lawyers argue that their clients were presented with a lose-lose scenario when the change to Flash Seats was disclosed: “Sign a separate contract with Flash Seats and receive nothing in exchange except a less valuable product or cancel the tickets and forfeit all rights, including money already paid,” according to court documents.
The Wolves say both plaintiffs set up accounts on Flash Seats and agreed that if they had a dispute seeking monetary damages it would be handled by arbitration, according to court documents filed April 25.
The plaintiffs, the Timberwolves contend, “cannot maintain a suit for breach of contract over modified contract terms they accepted.”
The Wolves have said their use of Flash Seats helps “prevent fraudulent ticket sales and provide(s) an improved experience for … fans,” some of whom have praised the ease of ticket transfers with Flash Seats.
On the antitrust claims, the Wolves’ legal team said the plaintiff’s claims fall short because the basketball team competes for consumers with other sports and entertainment options. They also dispute that there are two marketplaces - primary, in which consumers buy from the Wolves, and secondary, in which they can sell or give away tickets they can’t use.
“Even if there were a separate antitrust market for secondary Timberwolves tickets, plaintiffs fail to allege any conduct that tends to exclude competitors from this market,” court documents say. “Every court to consider similar claims for purported monopolization of a team’s own tickets has rejected the claim at the motion to dismiss stage.”
The Wolves’ lawyers, Ross, Orenstein and Baudry, cite the Golden State Warriors’ victory over ticket reseller StubHub on antitrust claims in federal court in California in 2015.
“The court held that a ‘primary’ ticket to a Warriors game and a ‘secondary’ ticket to a Warriors game are ‘commodities reasonably interchangeable by consumers for the same purposes,’” court documents say.
The Wolves finished with a 29-53 record last season and were 29th out of 30 NBA teams in home attendance, averaging 14,175 fans for 41 home games. But expectations are on the rise for next season with consecutive NBA rookies of the year, Karl-Anthony Towns and Andrew Wiggins on the roster, as well as new coach and president Tom Thibodeau leading the team.
Fans have responded, with an estimated 800-unit increase to its season-ticket base for next season.