Diversified Grp., Inc. v. Sahn - 259 A.D.2d 47, 696 N.Y.S.2d 133 (App. Div. 1st Dept. 1999)

Rule:

Under N.Y. Arts & Cult. Aff. Law § 25.13, it is illegal both to resell tickets without a license to do so, and to resell tickets at above the "maximum premium price." Maximum premium price is the established price plus five dollars or ten percent of the established price, whichever is greater. N.Y. Arts & Cult. Aff. Law § 25.03(4).

Facts:

Subscription rights to season tickets for sports events were explicitly non-transferable and subject to cancellation. Defendant original owner sold, at a premium, his subscription rights to defendant-intermediate owner. Defendant intermediate owner then sold subscription rights to plaintiffs, at a premium. The sports arena cancelled the tickets and subscription rights and plaintiffs sued to rescind the contract and recover the premium they paid. Plaintiffs' cross-motion for summary judgment was granted and defendants appealed, arguing that no scalping occurred.

Issue:

Did the contract to sell the subscription rights violate the anti-scalping law? 

Answer:

Yes.

Conclusion:

The court interpreted the intent of the parties and affirmed; holding that the contract to sell the subscription rights was, in reality, an agreement to resell tickets, thus, it violated the anti-scalping law, N.Y. Arts & Cult. Aff. Law § 25.01 et seq., under which it was illegal both to resell tickets without a license to do so, and to resell tickets at above the maximum premium price.