ALF Urges Enforcement of Electronic Ticket Arbitration Agreements

Electronic tickets, purchased online for admission to sports, entertainment, and many other types of events, have become ubiquitous. When small groups, such as friends or family, plan to attend an event together, it is customary for one individual to purchase tickets for the group, download them to and store them on his or her mobile phone, and display them at the gate so that the entire group can enter. The electronic ticket purchasing process typically requires the purchaser to click a box accepting Terms & Conditions that provide that any disputes arising from the event be resolved through binding arbitration.

In Naimoli v. Pro-Football, Inc., No. 23-2020 (4th Cir.), a football stadium-related personal injury suit, the U.S. Court of Appeals for the Fourth Circuit will decide whether such arbitration agreements can be enforced against each member of the group even if only the individual who purchased electronic tickets on their behalf was actually or constructively aware of the arbitration agreement.

ALF has filed an amicus brief urging the Fourth Circuit to enforce arbitration agreements that are required for purchase of electronic tickets. The amicus brief focuses on the preemptive force of the Federal Arbitration Act, 9 U.S.C. § 1 et seq., which embodies a congressional policy favoring resolution of disputes through arbitration.

Case Background

The plaintiffs traveled from New Jersey to Maryland to attend a National Football League game at FedExField between the Philadelphia Eagles and the Washington Football Team (now called the Washington Commanders). They allege that at the end of the game they sustained injuries when they fell while leaning over a railing to “high five” the Eagles’ quarterback and the railing gave way.

The cousin of one of the plaintiffs purchased the electronic tickets that they used to gain entry to the stadium. Stadium personnel scanned each of plaintiffs’ electronic tickets from the cousin’s mobile phone. To purchase and download the tickets, he had to click an electronic box acknowledging that he agreed to the Terms & Conditions, which included provisions requiring that all disputes relating to the ticket license or game be resolved through arbitration.

Despite the arbitration agreement, the plaintiffs filed suit in Maryland federal district court against the football team, the stadium, and a private security company. The court denied the defendants’ motion to compel arbitration. Applying Maryland common law, the court held that the arbitration agreement was not binding because there is no evidence that the plaintiffs had prior knowledge of the agreement that their cousin had accepted during the process of purchasing the electronic tickets on their behalf.

The defendants (appellants in the court of appeals) primarily contend that under federal common law, the plaintiffs are equitably estopped from repudiating the arbitration agreement, and alternatively, that they are ticket license beneficiaries bound to the arbitration agreement under federal common law agency principles.

ALF's Amicus Brief

ALF’s amicus brief argues that the district court’s denial of the motion to compel arbitration should be reversed for the additional reason that the court’s analysis is based on a state common-law rule that is preempted by the FAA. Section 2 of the FAA, 9 U.S.C. § 2, states in pertinent part that “[a] written provision in . . . a contract . . . to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist in law or equity for the revocation of any contract . . . .” The Supreme Court repeatedly has held that § 2 preempts state law that discriminates against or otherwise disfavors this federal statutory mandate requiring judicial enforcement of arbitration agreements.

In Naimoli, the district court applied what it believed to be a Maryland common-law “awareness” principle under which non-signatories, in order to be bound by an arbitration agreement that is accepted by another person on their behalf, must have prior knowledge of the agreement. ALF’s amicus brief argues that the FAA preempts this awareness rule because unlike general common-law principles governing principal-agent relationships, it discriminates against arbitration agreements.

Read ALF's Amicus Brief Here.