The case Palivos et al v FIFA et al may have resulted in a win for FIFA and defendants, but is it a Pyrrhic victory?
FIFA and its major travel and ticketing partners have been involved in a second high stakes court case in the USA since September last year that only came to an end recently.
In the same state that plays host to the FIFA exhibition in the ‘Mob Museum’, two fans initiated action in the courts to recover hundreds of millions of dollars from FIFA, Match Hospitality, Match Services, Infront, SportsMark and Cartan for allegedly inflating the prices of tickets for the 2014 World Cup.
The fans, Vicki Palivos and George Kleanthis (the plaintiffs), initiated action in the Nevada courts as a class action on behalf of anyone in the United States who purchased tickets to attend one or more matches of the 2014 World Cup in Brazil via FIFA’s authorised sales agents. The claim was based on a civil RICO violation, violation of sections of specific US legislation and being an “unjust enrichment and disgorgement of profits.”
Palivos and Kleanthis argued that the six defendants sold tickets at above face value in breach of Brazilian law and FIFA regulations. The claim alleged that the defendants did so by bundling tickets with ‘hospitality packages’ with inclusions such as food and beverages, commemorative gifts, welcome hostess and stadium parking; as well as false public pronouncements that tickets had sold out in order to inflate prices.
It was high stakes for FIFA and their fellow defendants. If the plaintiffs had won, they may well have been facing copy-cat claims from around the world.
However, in what can only be described as an own-goal, it turned out neither Palivos nor Kleanthis had purchased a hospitality package from any of the defendants, but secondary retailers who were agents of one or more of the defendants.
Keen to win something in the US court system and also, presumably, to maintain their ‘victim’ status before the US authorities, the small army of lawyers for FIFA and the others lodged a counter claim for costs as well as sanctions against the two fans.
In the meantime, Palivos and Kleanthis lodged an amended claim that tried to circumscribe the purchase timeframe and corral the circumstances of a ticket purchase to include secondary retailers.
The case was finalised on 28 July. Judge James C Mahan did not allow the amended claim of Palivos et al; dismissed the plaintiff’s original claim for lack of standing; denied the claim from FIFA and friends for sanctions and costs; and denied as moot the defendant’s motions to dismiss.
There is also a ‘But…’.
The Judge left the door open.
Rather than dismiss the claim entirely, Judge Mahan declared it to be “dismissed without prejudice for lack of subject matter jurisdiction” – which effectively enables the plaintiffs (or other potential plaintiffs) to re-file the lawsuit at a later time.
If Palivos and Kleanthis can sort out their claim, or if other fans feel they’ve been ripped-off by the ‘business model’ in operation for World Cup tickets and get together to form a genuine putative class, that may well mean this was a Pyrrhic victory for FIFA.
Further information is available here.
