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7th Circuit reverses dismissal of NCAA illegal ticket-lottery suit

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The 7th Circuit Court of Appeals has allowed a proposed class action case claiming the National Collegiate Athletic Association operates an illegal lottery to sell tickets to certain sporting events to go forward.

Judge William T. Lawrence of the U.S. District Court, Southern District of Indiana, Indianapolis Division, had dismissed all of the plaintiffs’ claims with prejudice on the NCAA’s motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b). Plaintiffs Tom George and others applied for tickets to NCAA men’s basketball games through NCAA-owned websites. In order to apply for tickets for the men’s Final Four, applicants may submit a single application with up to 10 entries and the full face value of the tickets plus a $6 non-refundable handling fee. Applicants can only win once and would get at most two tickets. Refunds would be sent to applicants according to whether they won or not, but the $6 handling fee on each entry would not be returned.

The plaintiffs alleged the ticket-distribution system constitutes an unlawful lottery because there are far more applicants than tickets available and the handling fee bears no relation to the cost of running the lottery. They also sued Ticketmaster and settled on most of the charges.  

In Tom George, et al. v. National Collegiate Athletic Association 09-3667, the majority on the 7th Circuit found distinction between the instant case and Lesher v. Baltimore Football Club, 496 N.E.2d 785, 789 (Ind. Ct. App. 1986), on which the District Court relied to dismiss the case. In Lesher, all applicants submitted the face value of tickets sought plus a handling fee. Losers were reimbursed the full amount, plus the fee. The Lesher court held the process wasn’t a lottery because no prize had been awarded and ticket winners got nothing of greater value because losers received a full refund.

But in the instant case, the NCAA kept the handling fee. The plaintiffs also alleged the existence of a prize not present in Lesher: the scarcity of the tickets makes those tickets far more valuable than the cost to purchase.

The plaintiffs have alleged all elements of a lottery: they paid a per-ticket or per-entry fee (consideration) to enter a random drawing (chance) in hopes of obtaining scarce, valuable tickets (a prize), wrote Judge John W. Darrah of the Northern District of Illinois, who is sitting by designation.

The majority also found the District Court erred in holding that the doctrine of in pari delicto barred the plaintiffs from seeking relief from the court.

“Indiana law makes it unlawful to conduct lotteries or otherwise gamble knowingly. As alleged, the NCAA’s act of knowingly conducting an unlawful lottery demonstrates a greater degree of fault than Plaintiffs’ act of unwittingly entering that lottery,” wrote the judge.

Since the plaintiffs had sufficiently alleged the NCAA operated an unlawful lottery, the 7th Circuit reversed the order on all counts and remanded for further proceedings.

Judge Richard Cudahy dissented, finding the instant case indistinguishable from Lesher.

“There are other reasons for excluding this process of ticket distribution from being classified as an illegal ‘lottery,’” he wrote. “One of these is the statutory exemption for ‘bona fide transactions that are valid under the law of contracts.’ This is a very open-ended exemption that is easily applicable to this device -- incidental to allocating scarce tickets for popular sports events.”
 

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  1. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  2. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  3. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  4. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

  5. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

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