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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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  3. All these sites putting up all the crap they do making Brent Look like A Monster like he's not a good person . First off th fight actually started not because of Brent but because of one of his friends then when the fight popped off his friend ran like a coward which left Brent to fend for himself .It IS NOT a crime to defend yourself 3 of them and 1 of him . just so happened he was a better fighter. I'm Brent s wife so I know him personally and up close . He's a very caring kind loving man . He's not abusive in any way . He is a loving father and really shouldn't be where he is not for self defense . Now because of one of his stupid friends trying to show off and turning out to be nothing but a coward and leaving Brent to be jumped by 3 men not only is Brent suffering but Me his wife , his kids abd step kidshis mom and brother his family is left to live without him abd suffering in more ways then one . that man was and still is my smile ....he's the one real thing I've ever had in my life .....f@#@ You Lafayette court system . Learn to do your jobs right he maybe should have gotten that year for misdemeanor battery but that s it . not one person can stand to me and tell me if u we're in a fight facing 3 men and u just by yourself u wouldn't fight back that you wouldn't do everything u could to walk away to ur family ur kids That's what Brent is guilty of trying to defend himself against 3 men he wanted to go home tohisfamily worse then they did he just happened to be a better fighter and he got the best of th others . what would you do ? Stand there lay there and be stomped and beaten or would u give it everything u got and fight back ? I'd of done the same only I'm so smallid of probably shot or stabbed or picked up something to use as a weapon . if it was me or them I'd do everything I could to make sure I was going to live that I would make it hone to see my kids and husband . I Love You Brent Anthony Forever & Always .....Soul 1 baby

  4. Good points, although this man did have a dog in the legal fight as that it was his mother on trial ... and he a dependent. As for parking spaces, handicap spots for pregnant women sure makes sense to me ... er, I mean pregnant men or women. (Please, I meant to include pregnant men the first time, not Room 101 again, please not Room 101 again. I love BB)

  5. I have no doubt that the ADA and related laws provide that many disabilities must be addressed. The question, however, is "by whom?" Many people get dealt bad cards by life. Some are deaf. Some are blind. Some are crippled. Why is it the business of the state to "collectivize" these problems and to force those who are NOT so afflicted to pay for those who are? The fact that this litigant was a mere spectator and not a party is chilling. What happens when somebody who speaks only East Bazurkistanish wants a translator so that he can "understand" the proceedings in a case in which he has NO interest? Do I and all other taxpayers have to cough up? It would seem so. ADA should be amended to provide a simple rule: "Your handicap, YOUR problem". This would apply particularly to handicapped parking spaces, where it seems that if the "handicap" is an ingrown toenail, the government comes rushing in to assist the poor downtrodden victim. I would grant wounded vets (IED victims come to mind in particular) a pass on this.. but others? Nope.

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