That’s the Ticket? Plaintiffs’ Lawyers Target Ticketing Service Fees in New York

Plaintiffs’ counsel have launched a wave of lawsuits against New York venues and ticket platforms, invoking a recently-enacted provision of New York’s Arts and Cultural Affairs Law. According to these lawsuits, these businesses have not adequately disclosed ticketing service fees to customers. Businesses that sell tickets to consumers for locations and events in New York should review their sales processes in light of this latest litigation gambit.

A Growing Lawsuit Trend

Since December 2023, at least 25 lawsuits have been filed in New York federal and state courts alleging that museums, movie theaters, and other places of entertainment have been charging service fees on admission tickets without proper disclosure to customers, either through their websites or third-party ticketing platforms.

The recent lawsuits have hit a wide variety of defendants that sell tickets to customers—including Regal Cinemas, the Museum of Ice Cream, Fandango Media, and Legoland. They generally follow a similar recipe. The plaintiff seeks to bring a class action alleging that the defendant violated a recently-adopted provision of the New York Arts and Cultural Affairs Law by allegedly selling tickets without disclosing service fees early enough in the online purchasing process, therefore increasing the total cost of its tickets during the purchase process. In these cases, the plaintiff usually seeks to represent a nationwide class, as well as a subclass of New York purchasers, and asks for injunctive relief, actual and statutory damages, and attorneys’ fees. Almost all of the suits are currently in early stage litigation.

These lawsuits are part of a broader wave of lawsuits and regulatory attention—notably including a proposed FTC rule—surrounding what plaintiffs’ lawyers have described as “hidden” or “junk” fees. Businesses have frequently pointed out in response that the challenged fees are disclosed to consumers in advance of transactions, are contractually authorized and accepted, and provide consumers with information about the components of the total price of a good or service.

New York Arts and Cultural Affairs Law § 25.07(4)

Section 25 of the New York Arts and Cultural Affairs Law regulates the sale of tickets for places of entertainment. Section 25.07(4), as amended on June 30, 2022, sets out several requirements for operators and operator’s agents of a place of entertainment, licensees or other ticket resellers, and platforms that facilitate the sale or resale of tickets:

• Disclosure of “the total cost of the ticket, inclusive of all ancillary fees;”
• Disclosure, “in a clear and conspicuous manner,” of “the portion of the ticket price stated in dollars that represents a service fee, or any other fee or surcharge;”
• Disclosures must be made “prior to the ticket being selected for purchase” and “shall not be false or misleading;”
• “[S]ubtotals, fees, charges and any other component of the total price . . . may not be presented more prominently or in the same or larger size as the total price;” and
• “The price of the ticket shall not increase during the purchase process,” except for any reasonable fees associated with delivery of non-electronic tickets.

The statute defines “operator” to mean “any person who owns, operates, or controls a place of entertainment or who promotes or produces an entertainment.” A “place of entertainment” is defined as “any privately or publicly owned and operated entertainment facility such as a theatre, stadium, arena, racetrack, museum, amusement park, or other place where performances, concerts, exhibits, athletic games or contests are held for which an entry fee is charged.”

The statute creates a private right of action to “any person who has been injured by . . . a violation” of the law, and permits injunctive relief as well as monetary, including recovery of “actual damages or fifty dollars, whichever is greater.” A prevailing plaintiff may also be awarded reasonable attorneys’ fees.
Finally, in response to any violations, the secretary of state may deny an application or revoke or suspend a license, impose a fine of up to $1,000 per violation, and order restitution.

Key Takeaways and Next Steps

Companies facing these lawsuits will want to assess their defenses, including whether they are covered by the law, if they are subject to suit in New York, and (for cases brought in federal court) whether plaintiffs have standing to sue. In addition, contractual terms may provide additional defenses, such as choice of law, forum selection, and arbitration provisions.

The most significant risk of the New York statute is that it provides for statutory damages of $50 per violation, which far exceed the typical service fee on a single ticket. Many plaintiffs’ lawyers have thus sought to file in federal court, because it is easier to pursue class actions for statutory damages under New York law in federal court than state court.

Looking forward, businesses that might be covered by the statute should promptly evaluate their ticketing processes and make any necessary changes to ensure compliance with the New York law. Notably, ticket resellers and third-party platforms that assist in the sale of tickets are also subject to the statute’s requirements. In assessing compliance, businesses should take note of features that plaintiffs’ counsel have challenged in litigation, such as the prominence of any disclosures, the stage at which the fees are disclosed, and whether there is a timer during the purchase process.

In addition, businesses should be aware of other litigation and regulatory trends relating to service fees—trends that have been evolving in the last few years and that will continue to develop.