A lawsuit seeks to block D.C.’s RESALE Act, which is set to go into effect in January and aims to protect concertgoers from deceptive ticketing practices.
What the legal battle over ticket resales could mean for D.C. concertgoers
A lawsuit seeks to block D.C.’s RESALE Act, which is set to go into effect in January and aims to protect concertgoers from deceptive ticketing practices.
This past summer, when the D.C. Council unanimously passed legislation aimed at protecting ticket buyers from deceptive practices, the Hollywood Reporter called it the “most stringent anti-scalping” policy in the nation.
The Restricting Egregious Scalping Against Live Entertainment (RESALE) Act prohibits ticket resellers from bumping prices for D.C. events more than 10% above their original value and requires third-party platforms to be transparent about all costs involved in a resale. It bans speculative (or “ghost”) tickets, which are tickets that people — and in some cases, bots — sell on third-party sites before the official tickets are on sale. In addition, the law requires any vendors who resell more than 50 tickets per year to register for a D.C. business license.
The owners of more than two dozen local venues signed petitions in favor of the act. One of those owners, Catherine Ferrando of the Black Cat, wrote in a 51st op-ed last spring that most of the venue’s shows appear on resale platforms marked up 100-200%. (Black Cat sells tickets directly through the company Etix.)
“Each resale diverts money away from artists and local businesses,” Ferrando wrote. “That extra money heads straight out of the District and through national and international corporations that contribute nothing to the city’s music scene.”
But the law won’t go into effect on Jan. 1 without a fight, thanks to a federal lawsuit filed last month by Ticket Policy Forum (TPF), a trade association that popped up last year to represent third-party ticket resellers. The suit asks the court to declare the new law unconstitutional and, in the meantime, grant a preliminary injunction — a temporary pause on the law being enforced until a final decision is made. A U.S. District Court judge is scheduled to hold a hearing on Nov. 19 to decide whether to grant this pause.
Earlier this week, the D.C. Office of the Attorney General filed a memo in its defense, arguing that the third-party resale platforms are hiding “inside a Trojan Horse of constitutional claims” and have little evidence to substantiate their arguments. TPF is expected to file a brief to back up these claims by Nov. 16.
The lawsuit names SeatGeek, Vivid Seats, Gametime, and TickPick as plaintiffs, and argues that D.C. has no legal right to regulate sales that take place between parties outside its jurisdiction — an exchange between a Maryland buyer and a Virginia seller, for example. These transactions account for 85-90% of sales for D.C. shows through these platforms, according to the lawsuit.
“Under the guise of affordability, the District enacted a law that will drive ticket sales into the shadows, subjecting fans to greater risks from street-side scams and increased fraud,” said Brian Berry, Ticket Policy Forum’s executive director, in an earlier statement.
The complaint also alleges that the 110% price cap is arbitrary and low enough that the ticketing platforms won’t be able to earn a reasonable return on their investment, in violation of the Due Process Clause. The companies argue that the law violates the First Amendment by forcing resale marketplaces to disclose the original price of tickets (because the amendment protects, according to the language of the suit, “the right to refrain from speaking at all ... and applies equally to compelled statements of fact ... including in commercial speech").
Ticket Policy Forum says the RESALE Act unjustly exempts primary sellers — namely, Ticketmaster, which it calls an “illegal monopoly” that dominates the market. (Ticketmaster merged with Live Nation in 2010 and operates, by far, the world’s largest online box office.) TPF says the law’s authors undermine their own goal of consumer protection by not regulating the initial ticket prices, including fees.
“This is a technical term: That's utter bullshit,” says Audrey Fix Schaefer, director of communications for I.M.P., which owns local venues including The Anthem, 9:30 Club, and The Atlantis, and relies on Ticketmaster for online ticket sales.
“This law pertains to resale,” Schaefer says. “Ticketmaster does resale. They, too, have to abide by the same exact rules and regulations.” (Fans can purchase tickets at face value at any I.M.P. venue box office, she adds.)
Ticketmaster says the driving force behind rising concert prices is “predatory resale sites and scalpers who inflate prices and siphon millions from fans,” per Dan Wall, Live Nation’s executive vice president of corporate and regulatory affairs. “The Ticket Policy Forum is just another astroturf group representing those same resellers.”
(Ticketmaster, while supporting D.C.’s act, has not been immune from legal action in D.C.: In April, Attorney General Brian Schwalb required Live Nation to pay nearly $10 million to refund customers who were deceived by hidden fees and “pressure tactics” for a decade; and Ticketmaster must now list “all-in pricing,” including all mandatory fees, up front.)
Charles Allen, the Ward 6 councilmember who introduced the bill, says TPF’s claims are bogus.
“Companies like the ones behind this lawsuit are gouging D.C. residents using technology to scoop up as many live music tickets as they can and resell them at inflated prices — a scam that’s been extremely lucrative for them for years,” Allen said in a statement after the suit was filed. “It’s not surprising to see them try for an encore to preserve these enormous profits and the status quo.”
Other advocates of the RESALE Act say there’s another clear reason for the lawsuit: Ticket resellers want to prevent similar bills from passing in other big music cities. But it may already be too late to prevent the wave of anti-scalping legislation.
When the act passed in the D.C. Council, Stephen Parker, executive director of the National Independent Venue Association (NIVA), declared that D.C. had “raised the bar for ticketing reform” and specifically called on lawmakers to replicate the bill in every state.
Almost immediately, Massachusetts Gov. Maura Healy introduced the Great Divide Act, a similar bill aimed at banning speculative tickets and price gauging on secondhand sales. That bill’s title is a nod to indie singer-songwriter Noah Kahan, who supported the legislation, along with its Vermont counterpart, which went into effect in July. California Gov. Gavin Newsom signed a less-comprehensive bill banning deceptive ticketing, but not without some blowback. New York has considered similar legislation.
While Ticket Policy Forum has released several statements opposing legislation in other states, D.C., so far, is the only jurisdiction where the group has taken the fight to the courts.
“I had a legislator in another state reach out to me when they saw the bill and say, ‘This tells me that you've got the perfect bill there,’” says Schaefer, who also serves as NIVA’s board president. “It's a badge of honor that they're suing D.C.”
Elliot (he/him) is a senior reporter for The 51st and has covered the D.C. arts and culture scene for nearly a decade. Before joining The 51st, Elliot worked at Washingtonian Magazine, DCist/WAMU, and the National Press Club Journalism Institute.
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