Topic:
CONSUMER PROTECTION; RETAIL TRADE; RECREATION (GENERAL);
Location:
CONSUMER PROTECTION;
Scope:
Court Cases; Connecticut laws/regulations;

OLR Research Report


September 9, 1998 98-R-1121

FROM: Dan Duffy, Principal Analyst

RE: Ticket Broker Suit

You asked for a copy and brief summary of Connecticut v. Cardwell (246 CT 721).

SUMMARY

The Connecticut Supreme Court considered a defendant ticket broker's appeal of a trial court's judgment that he had violated the ticket scalping law. The ticket broker operated from offices in Connecticut and Massachusetts. Tickets for events to be held in Connecticut were sold to Connecticut consumers from the Massachusetts office at a price greater than that allowed by Connecticut's ticket scalping law.

The Supreme Court unanimously held that the law was not violated because the ticket broker did not sell, offer to sell, or attempt to sell tickets in this state. In reaching this holding, the court considered where the ticket broker delivered the tickets to the buyer, where offers were made when tickets were sold in response to calls initiated by consumers located in Connecticut, and interpreted the law on criminal attempt. The court determined that the ticket scalping law was not violated in this state.

After determining that the sales, offers, and attempts took place in another state, the court considered whether the legislature meant for the law to have an extraterritorial effect. It held that the law, was written, does not apply to sales, offers, and attempts occurring outside of Connecticut because the law does not explicitly indicate an extraterritorial effect and the legislative history shows just the opposite intent.

The court upheld the trial court's imposition of penalties under the Connecticut Unfair Trade Practices Act (CUTPA). The penalties were imposed based on the seller's actions in specific instances. Finally, the court upheld the penalty imposed by violating the law requiring certain businesses to file a trade name certificate with the town clerk of the town in which the business is conducted.

LEGAL ISSUES

The court wrote that the case raised three legal issues: whether the ticket broker's conduct violated the ticket scalping law, whether the court abused its discretion in imposing CUTPA penalties, and whether it abused its discretion in imposing a penalty for failing to file a trade name certificate.

FACTS

The facts were not disputed. Ticketworld operated in two locations: Hartford, Connecticut and Springfield, Massachusetts. It sold tickets in Hartford for events taking place outside of the state and sold tickets in Springfield for events taking place in Connecticut and elsewhere. If a caller asked the Hartford office for a ticket to a Connecticut event, Ticketworld referred the caller to the Springfield office. Ticketworld advertises its services in Connecticut newspapers.

On many occasions, Ticketworld sold tickets for Connecticut events at a price above the statutory maximum from its Springfield office. The trial court identified four customers who had paid well above the allowable $3 surcharge.

TICKET SCALPING VIOLATION

The law prohibits selling, offering to sell, or attempting to sell tickets to sporting or entertainment events to be held in Connecticut at a price greater than $3 above the price, including tax, printed on the face of the ticket. A violator is subject to criminal penalties and to prosecution under CUTPA (CGS 53-289). On appeal, the defendant claimed that it did not sell, offer to sell, or attempt to sell in Connecticut tickets to events to be held in the state. Because the law is a criminal statute, the defendant argued, it is not applicable to events occurring outside of the state.

Selling in the State

The court found that the selling activities took place outside of the state after applying relevant portions of the Uniform Commercial Code. It stated that, unless otherwise explicitly agreed to by the parties, title passes to the buyer at the time and place at which the seller completes his obligations to physically deliver the goods. This is a “shipment” contract in contrast to a “destination” contract, under which a seller agrees to deliver the goods to a particular destination. In the absence of an explicit agreement, contracts are presumed to be shipment contracts. In this case, title passed to the buyer when Ticketworld fulfilled its deliver obligations in its Springfield office.

Offering to Sell

The trial court also found that Ticketworld had offered to sell tickets at a price above the statutory maximum to Connecticut customers by telephone. The Supreme Court did not find any legal support for the trial court's conclusion; it also did not find significant legal authority for the opposite conclusion. The defendant argued that the only sensible conclusion was one that deemed an offer to have been made where the person communicating the offer is located. Otherwise, the offeror would have to know the laws of every jurisdiction from which it received calls. Further, it would not be able to determine if its callers were misrepresenting where they were located. In the absence of a significant legal authority, the court agreed with the defendant's practical argument.

Attempting to Sell

Finally, the trial court found that Ticketworld had attempted to sell tickets at a price above the statutory maximum within Connecticut by advertising the services of its Springfield office in Connecticut. The trial court reached this conclusion by interpreting the phrase “attempt to sell” to mean essentially the same thing as “expose for sale.” The latter phrase is broad enough to encompass activities like Ticketworld's advertising. The defendant argued that “attempt” has a statutorily defined meaning that should be applied in a criminal matter. The Supreme Court agreed and found that the intention to commit a crime is an essential element in determining whether someone has attempted to commit a crime. It did not find that Ticketworld's advertising was, in itself, conduct that would constitute a crime or that it amounted to a substantial step in the commission of a crime. Finally, Ticketworld's practice of referring callers to its Springfield office showed an attempt to comply with the law. The court found that Ticketworld had not attempted to sell tickets in violation of the law.

Extraterritorial Application of the Law

The Supreme Court considered the defendant's claim that the law was not meant to prohibit activities outside of Connecticut after it had determined that the defendant had not violated the ticket scalping law in the state. The state argued that the statute's broad public policy and the fact that the conduct resulted in harm to Connecticut's citizens indicated that the legislature intended the law to have an extraterritorial effect. The court found that (1) the statute did not expressly indicate that the law should have an extraterritorial effect and (2) the legislative history indicates that the statute was not intended to apply to conduct taking place outside of the state.

CUTPA PENALTIES

The defendant claimed that the trail court abused its discretion in awarding restitution and imposing penalties in four instances involving individual customers. The trial court found that Ticketworld had, on more than one occasion, asserted that the tickets being sold were for a particular location when, in fact, it did not know where the seats were located. The court ruled that, on the basis of evidence before it, the court could have determined that Ticketworld's conduct constituted deceptive trade practices. Further, it was in the court's discretion to award restitution and impose penalties in accordance with CUTPA. The court upheld the trial court's actions.

TRADE NAME CERTIFICATE PENALTY

The defendant claimed that the trial court also abused its discretion when it imposed a penalty for failing to file a trade name certificate. Violating the trade name certificate law is a per se violation of CUTPA. Ticketworld did not dispute that it had not filed a certificate. It argued that (1) Ticketworld has always been easily accessible and therefore the purpose of the trade name certificate law was accomplished, (2) no harm resulted from its failure to file, and (3) it did not knowingly fail to file. The court found that the trial court did not err when it imposed the penalty.

DD:lc