Universal Attractions, Inc. v. Live Nation Entm't, Inc., 2018 U.S. Dist. LEXIS 23578 (S.D.N.Y. Feb. 12, 2018):

Plaintiff Universal Attractions, Inc. ("Universal") brings this action against Defendants Live Nation Entertainment, Inc. ("Live Nation") and Ticketmaster LLC ("Ticketmaster"), alleging false advertising under the Lanham Act, and unfair competition in connection with the promotion and sale of tickets for a certain concert. (Compl., ECF No. 6.) Defendants moved to dismiss Plaintiff's Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. (ECF No. 17.) Plaintiff then filed an Amended Complaint as a matter of course. (Am. Compl., ECF No. 22.) Before this Court is Defendants' motion to dismiss Plaintiff's Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that [*2]  Plaintiff fails to sufficiently allege any misrepresentation by Defendants. (Mot. to Dismiss, ECF No. 25.)

Defendants' motion to dismiss Plaintiffs Amended Complaint is GRANTED.¹

I. BACKGROUND

Plaintiff is an entertainment company that "produces, packages and markets upscale entertainment shows and live concerts for famous and well known musical performers and groups." (Am. Compl. ¶ 7.) One of the live concert shows produced by Plaintiff is the I Love the 90's tour ("IL90s"), which features a series of concerts at different venues performed by various artists from the 1990s. (See id.).

Plaintiff engaged promoters throughout the United States to work with Tieketmaster, believed to be a division of Live Nation, to market and sell tickets to the show. (Id. ¶¶ 3, 8.) Prices for the tickets ranged from "the low $20s to hundreds of dollars depending on seating and perks offered[.]" (Id. ¶ 8.) For one venue, the Vina Robles Amphitheatre in Paso Robles, California (the "PR Venue"), tickets were priced to be sold for $65, $75, and $150, with the average ticket being $81. (Id. ¶ 12; Ex A. of Am. Compl ("Ex. A") at 2.) There was also a group of VIP tickets set to be sold for the PR Venue, which ranged [*3]  from $250 to $375 per ticket. (Id. ¶ 12; Ex A. of Am. Compl ("Ex. A") at 2.)

Ticket sales by Ticketmaster occurred in two phases: the pre-sales phase and the general sales phase. (Am. Compl. at 3; see generally Ex. A.) Presales occurred before general sales and provided certain consumers the opportunity to purchase tickets before they were made available to the general public for purchase.² Prior to the pre-sale period, a select group of consumers were given codes through e-mail, social media, or other means that could then be used to unlock the relevant pre-sales offer by inputting the code on Ticketmaster's website.³

During the IL90s pre-sale period for at least two venues. Ticketmaster listed the VIP tickets priced at $250 to $350 "first, foremost, and only" on its website for the concert. (Am. Compl. at 3; Ex. A. at 1.) While those with pre-sale codes could input their codes on Ticketmaster's website to access and purchase tickets other than the VIP tickets at different prices, members of the general public (i.e., those without a pre-sale code) could only view and purchase the VIP tickets during this period. (See Oral. Arg. Tr., ECF No. 33, at 16:16-22; 31:13-22.)⁴

Plaintiff [*4]  alleges that as a result of the manner in which Ticketmaster advertised and promoted the VIP tickets, fans were "turned off" and "left the site in astounding numbers." (Ex. A. at 1.) "The number of fans that left the ticketing site, without purchase, was uniquely high, and the conversion to sales was uniquely LOW." (Id.) Due to the lower than expected volume of ticket sales, the operator of the PR Venue, Nederlander Concerts, ultimately cancelled the show at its venue. (See generally id.)

II. LEGAL STANDARD

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). The plaintiff must demonstrate more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. Stating a facially plausible claim requires pleading facts that enable the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Thus, the factual allegations pled "must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555.⁵

A district court must first review a plaintiff's complaint to identify allegations that, "because they are no more than conclusions, [*5]  are not entitled to the assumption of truth." Iqbal, 556 U.S. at 679. The court then considers whether plaintiff's remaining well-pleaded factual allegations, assumed to be true, "plausibly give rise to an entitlement to relief." Id.; see also Targum v. Citrin Cooperman & Co., LLP, No. 12 Civ. 6909 (SAS), 2013 U.S. Dist. LEXIS 164585, 2013 WL 6087400, at *3 (S.D.N.Y. Nov. 19, 2013). In deciding the 12(b)(6) motion, the court also draws all reasonable inferences in the non-moving party's favor. See N.J. Carpenters Health Fund v. Royal Bank of Scotland Grp., PLC, 709 F.3d 109, 119-20 (2d Cir. 2013).

III. PLAINTIFF'S LANHAM ACT CLAIM IS DISMISSED

Plaintiff's main argument is that Defendants deceived members of the general public (i.e., those without pre-sale codes)⁶ by presenting them with only the VIP tickets during presales. This allegedly led many Cans to leave Ticketmaster's website during presales, without purchasing any tickets, and not return because they believed that the VIP ticket prices were the only ones available for the concert.⁷ (See Am. Compl. at 3; Ex. A at 1; Oral Arg. Tr. 47:18-25; 48:1-9.) Plaintiff's false advertising claim is dismissed because Plaintiff fails to sufficiently allege any misrepresentation by Defendants.

The Lanham Act forbids false or misleading descriptions or representations of fact "in commercial advertising or promotion" concerning "the nature, characteristics, qualities, or geographic [*6]  origin of . . . goods, services, or commercial activities." 15 U.S.C. § 1125(a)(1)(B). "To state a false advertising claim under section 43(a), the plaintiff must plausibly allege that the statement in the challenged advertisement is false." Dependable Sales & Serv. v. Truecar. Inc., No. 15 Civ. 1742 (PKC), 2016 U.S. Dist. LEXIS 1424, 2016 WL 79992, at *3 (S.D.N.Y. Jan. 6, 2016) (quotation marks omitted) (quoting Merck Eprova AG v. Gnosis S.p.A., 760 F.3d 247, 255 (2d Cir. 2014)). To allege falsity, a plaintiff must sufficiently allege either: (i) that "the challenged advertisement is literally false" or (ii) that while the advertisement is not literally false it is nevertheless likely to mislead or confuse consumers." Johnson & Johnson * Merck Consumer Pharm. Co. v. Smithkline Beecham Corp., 960 F.2d 294, 297 (2d Cir. 1992). An advertisement is literally false when it is "false on its face or explicitly false." Johnson & Johnson Vision Care, Inc. v. Ciba Vision Corp., 348 F. Supp. 2d 165, 178 (S.D.N.Y. 2004) (citation and quotation marks omitted). "'[P]laintiffs alleging an implied falsehood are claiming that a statement, whatever its literal truth, has left an impression on the listener [or viewer] that conflicts with reality'—a claim that 'invites a comparison of the impression, rather than the statement, with the truth.'" Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144, 158 (2d Cir. 2007) (alteration in original) (quoting Schering Corp v. Pfizer Inc., 189 F.3d 218, 229 (2d Cir. 1999)).

Here, Plaintiff' fails to sufficiently allege that Ticketmaster's advertisement of tickets for IL90s was either literally or implicitly false. Nowhere in the Amended Complaint does Plaintiff allege how the prices for the VIP tickets advertised on [*7]  Ticketmaster's website were false. Plaintiff's allegations that Ticketmaster's ticket prices for IL90s were simply "false," (Am. Compl. ¶¶ 9-11, 16, 18), are too conclusory to satisfy the Iqbal/Twombly, pleading standard. Nor does Plaintiff ever allege that the price advertised for a particular ticket was not the actual price charged to customers. Rather. Plaintiff's false advertising claim is based on the manner in which Ticketmaster advertised the IL90s tickets, not that its prices were literally false. (See Am. Compl. at 3; Ex. A at 1; Oral Arg. Tr. 47:18-25; 48:1-9.) Thus, Plaintiff fails to plausibly allege that Ticketmaster's advertisement of the IL90s tickets was literally false.

Plaintiff also fails to make out a claim for implied falsity. Plaintiff does not actually allege anywhere in the Amended Complaint that consumers were, or likely to have been, misled or confused about the pre-sale prices by Ticketmaster's advertisements.⁸ Rather, the Amended Complaint suggests that by presenting members of the general public (i.e., those without codes) with only the VIP tickets for pre-sale purchase. Ticketmaster likely encouraged many consumers to leave its website, without any purchase, [*8]  and not return because they were under the impression that no other ticket prices would be available for sale later on. (See generally Ex. A.)

The crux of Plaintiff's argument is that Ticketmaster misled members of the general public in advertising IL90s tickets during presales by failing to inform them of other ticket prices. Yet, the mere fact that Ticketmaster disclosed some ticket prices during presales, but not others, does not constitute false advertising under the Lanham Act. "The [Lanham] Act imposes no affirmative duty of disclosure . . . and a claim cannot be based on the failure to disclose a fact." Clark Consulting, Inc. v. Fin. Sols. Partners, LLC, No. 05 Civ. 06296 (SAS), 2005 U.S. Dist. LEXIS 28642, 2005 WL 3097892, at *3 (S.D.N.Y. Nov. 17, 2005). "[A] failure to inform consumers of something, even something that they should know, is not per se a misrepresentation actionable under section 43(a) of the Lanham Act." McNeilab, Inc. v. Am. Home Prods. Corp., 501 F. Supp. 517, 532 (S.D.N.Y. 1980). Omissions may constitute a misrepresentation if they render any affirmative statements Use or misleading. Regisier.Com. Inc. v. Domain Registry of Am., Inc., No. 02 Civ. 6915 (NRB), 2002 U.S. Dist. LEXIS 24795, 2002 WL 31894675, at *14 (S.D.N.Y. Dec. 27, 2002). However, in this case, the lack (or presence) of tickets at prices lower than the VIP tickets on Ticketmaster's website during presales has no bearing whatsoever on the veracity of the VIP ticket prices themselves, which, as noted earlier, Ticketmaster advertised correctly.

Accordingly, Plaintiff's [*9]  false advertising claim under the Lanham Act is dismissed for failure to plausibly allege a false or misleading statement.⁹

IV. PLAINTIFF'S UNFAIR COMPETITION CLAIM IS DISMISSED

Having dismissed the only claim over which it has original jurisdiction, this Court declines to exercise supplemental jurisdiction over the remaining state law and common law claims at this early stage in the litigation. See 28 U.S.C. § 1367(c)(3) ("The district courts may decline to exercise supplemental jurisdiction over a claim . . . [if] the district court has dismissed all claims over Inch it has original jurisdiction."); Purgess v. Sharrock, 33 F.3d 134, 138 (2d Cir. 1994) ("[T]he exercise of supplemental jurisdiction is left to the discretion of the district court.").

V. CONCLUSION

Defendants motions to dismiss the Amended Complaint is GRANTED.

 

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¹ Defendants' original motion to dismiss was rendered moot when Plaintiff filed its Amended Complaint as a matter of course. Fredericks v. City of New York, No. 12 Civ. 3734, 2012 U.S. Dist. LEXIS 121708, 2012 WL 3667448, at *1 (S.D.N.Y. Aug. 27, 2012) ("Because the Amended Complaint [filed as a matter of course] rendered moot the Complaint initially filed on May 10 . . . Defendants' motion to dismiss the Complaint was made moot.").

² See supra note 2.

³ Plaintiff's Amended Complaint does not provide any information regarding how Ticketmaster presales Work. But, this Court takes judicial notice of the Ticketmaster pre-sale process, which is described in detail on Ticketmaster's website (http://insider.ticketmaster.com/presale-ticket-tips). See Volpe v. Am. Language Commc'n Cir., Inc., 200 F. Supp. 3d 428, 430 ("[F]or purposes of a 12(b)(6) motion to dismiss, a court may take judicial notice of information publicly announced on a party's website, as long as the website's authenticity is not in dispute and it is capable of accurate and ready determination.'") (quoting Wells Fargo Bank, N.A. v. Wrights Mill Holdings, LLC, 127 F. Supp. 3d 156, 167 (S.D.N.Y. 2015)).

⁴ This fact is not contained in the Amended Complaint, but was stipulated to by the parties at oral argument.

⁵ "In deciding a motion to dismiss under Rule 12(b)(6), the court may refer to documents attached to the complaint as an exhibit or incorporated in it by reference, to matters of which judicial notice may be taken, or to documents either in plaintiffs' possession or of which plaintiffs had knowledge and relied on in bringing suit.'" Fishbein v. Miranda, 670 F. Supp. 2d 264, 271 (S.D.N.Y. 2009) (quoting Brass v. Am. Film Tech., Inc., 987 F.2d 142, 150 (2d Cir. 1993)).

⁶ Plaintiff never claims that those with codes were confused or misled as to how to access or purchase the pre-sale tickets due to Ticketmaster's advertisements. (See generally Am. Compl.; see also Oral Arg. Tr. 47:18-25: 48:1-9.)

⁷ Plaintiff alleges that fans saw the VIP tickets "as costing $500.00 to $750.00 for a pair of tickets. (Ex. A at 1.)

⁸ The words "confused," "mislead," or any variety thereof are nowhere to be found in the Amended Complaint.

⁹ Plaintiff also argues that Ticketmaster was never "supposed to" list just the VIP Tickets at any point during ticket sales for IL90s. (Oral Arg. Tr. at 31:22; see also 49:17-24; 50:22-51:2.) However, while such an allegation might give rise to a claim for breach of contract, it does not suffice to constitute a false advertising claim under the Lanham Act.