Nov. 21 (Bloomberg) — The New York Giants and Jets must defend a breach-of-contract claim by a fan forced to buy personal seat licenses to finance a new $1.6 billion stadium, a judge ruled in also throwing out three related claims.
U.S. District Judge Peter Sheridan dismissed antitrust, consumer-fraud and unjust enrichment claims by Harold Oshinsky, while raising questions as to whether Oshinsky’s contract claim will survive. Oshinsky, a retired businessman, has held season tickets for both National Football League teams for 24 years.
Oshinsky claims it’s unfair to force fans to pay as much as $20,000 for the right to buy each Giants seat and up to $25,000 to buy each Jets seat. The teams play in Giants Stadium in East Rutherford, New Jersey, and are using the licenses to help pay for a nearby stadium that will open for the 2010 season.
“We’re trying to prove that the season ticket holders had a right to renew that was essentially taken away from them without any compensation,” Andrew Friedman, Oshinsky’s lawyer, said yesterday in an interview. “They’ve stopped allowing you to renew unless you buy a personal seat license.”
Sheridan said Oshinsky, who sued the teams in March, can pursue his contract claim through the pre-trial gathering of evidence. He said Oshinsky may depose three witnesses within 60 days and conduct other discovery to help build his case.
“The exact parameters” of Oshinsky’s “renewal rights (if any) will be defined, and only then can a determination be made as to whether those renewal rights have been breached” by imposing the licenses, Sheridan ruled Nov. 17 in Newark, New Jersey.
Oshinsky seeks to proceed as a group, or class-action, lawsuit. The ruling is “kind of a mixed bag,” said Friedman, of Glancy Binkow & Goldberg LLP in New York.
“I’m disappointed in the dismissal of the consumer and antitrust claims,” Friedman said. “I’m pleased that we’re allowed to go forward.”
In his 19-page opinion, Sheridan said Oshinsky claims he has two contracts with the teams: a right to buy tickets to all pre-season and regular season home games at an established location; and an implied “renewal right” to continue buying this bundle of tickets in perpetuity.
This alleged renewal right is the “central feature” in the dispute, according to the judge. The issue is “not whether renewal rights can exist at all, but whether they exist under the particular facts of this case,” wrote the judge.
By buying six contiguous Giants seats in Section 130 and four contiguous Jets seats in Section 131 for the past 24 years, Oshinsky “may possess a valuable implied right to renew his season tickets at both the existing stadium and the new stadium,” according to the opinion.
At this stage, it would be “inappropriate” to determine whether periodic disclaimers on Giants and Jets tickets has “waived or forfeited his renewal rights,” the judge wrote.
While the teams argue that the “express licensing agreement on the back of individual tickets trumps any renewal rights implied through the parties’ conduct,” Sheridan said he wouldn’t rule yet on that question.
“The licensing agreement on the back of individual tickets deals only with an individual game; it says nothing of the separate right to renew season tickets to all games,” Sheridan wrote. That agreement “may not bear up on long term renewal rights,” according to the judge.
Sheridan said he can’t yet rule on a breach of those rights, nor pass judgment on how the teams do business.
They “must ordinarily be permitted to increase ticket prices to keep pace with inflation, absorb the high cost of high salary talent or, as in this particular case, defray the costs of building a new stadium,” wrote the judge.
The judge, citing another legal opinion, said “it is common knowledge that professional sports franchisees have a sordid history of arrogant disdain for the consumers of this product.”
He also quoted another ruling, saying “whatever else might be said about professional football in the United States, it does seem to breed a hardy group of fans who do not fear litigation combat.”
The case is Oshinsky v. New York Football Giants Inc., 2:09-cv-01186, U.S. District Court, District of New Jersey (Newark).
Last Updated: November 21, 2009 00:01 EST