### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 13

‐ 1560

J AMES B ATSON

, Plaintiff

‐ Appellant

,

v.

L IVE N ATION E NTERTAINMENT

, I NC

., et al

., Defendants

‐ Appellees

.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 11 C 1226

— Gary S. Feinerman

, Judge

.

____________________

A RGUED N OVEMBER 14, 2013

— D ECIDED M ARCH 25, 2014

____________________

Before W OOD

, Chief Judge

, and C UDAHY and R OVNER

, Cir

‐

cuit Judges

.

W OOD

, Chief Judge

. James Batson walked up to Live Na

‐

tion’s box office at the Charter One Pavilion in Chicago and

purchased a non

‐ refundable ticket to see O.A.R., a popular

American rock band. Ticket in hand, he realized that the

ticket price included a $9 parking fee for a spot he did not

want. Believing that the bundled $9 fee was fundamentally

unfair, he sued on behalf of himself and a proposed class.2 No. 13

‐ 1560

I

Batson’s original complaint alleged claims under federal

antitrust and California unfair competition law. When Live

Nation moved to dismiss that action, Batson responded with

an amended complaint, which the district court accepted.

The amended complaint dropped the federal antitrust and

California unfair competition theories. Relying on the juris

‐

diction supplied by the Class Action Fairness Act, 28 U.S.C.

§ 1332(d)(1), Batson substituted a single claim that Live Na

‐

tion had committed an unfair practice in violation of the Illi

‐

nois Consumer Fraud and Deceptive Business Practices Act

(Consumer Fraud Act or Act), 815 ILCS 505/2. (Batson is a

citizen of New York; each of the defendant corporations is

incorporated in Delaware and has its principal place of busi

‐

ness in California.) The amended complaint criticizes the

2010 merger between Live Nation and Ticketmaster (a trans

‐

action that was not blocked by the Department of Justice),

but its primary target is Live Nation’s tying of a parking

charge to each concert ticket. Batson insists that the manda

‐

tory parking fee is unfair under the Consumer Fraud Act be

‐

cause it forces consumers to purchase the parking or forego

the concert. Live Nation again moved to dismiss, arguing

this time that Batson failed to state a claim under the Con

‐

sumer Fraud Act under the standards set out by the Su

‐

preme Court of Illinois in Robinson v. Toyota Motor Credit

Corp.

, 775 N.E.2d 951 (Ill. 2002). The district court agreed and

dismissed, and Batson now appeals. We affirm.

II

The facts underlying Batson’s complaint are straightfor

‐

ward. On July 10, 2010, Batson purchased a ticket for a con

‐

cert by O.A.R. from Live Nation’s box office at the CharterNo. 13

‐ 1560 3

One Pavilion in Chicago. After the transaction was complete,

Batson spotted on the face of the ticket a notation that a $9

parking fee was included in the price. Indeed, it is undisput

‐

ed that every single ticket sold for that concert reflected the

same information: of the total price, $9 was designated as a

parking fee, whether or not the buyer needed to park a car.

Batson had no car to park; he had walked from downtown

Chicago to the concert venue and had bought the ticket im

‐ mediately before the concert. As far as we know, Batson at

‐

tended the concert, but the sting of the mandatory parking

fee stayed with him, leading to this lawsuit.

III

We review a district court’s decision granting a motion to

dismiss under Federal Rule of Civil Procedure 12(b)(6) de no

‐

vo

. Stayart v. Yahoo! Inc.

, 623 F.3d 436, 438 (7th Cir. 2010).

Illinois’s Consumer Fraud Act is intended to protect con

‐

sumers from unfair methods of competition and other unfair

and deceptive business practices. See Robinson

, 775 N.E.2d at

960. It is liberally construed to effectuate its purpose. Id. Bat

‐

son chose to proceed under an unfairness analysis, as he was

entitled to do: “A plaintiff may allege that conduct is unfair

under [the Act] without alleging that the conduct is decep

‐

tive.” Siegel v. Shell Oil Co.

, 612 F.3d 932, 935 (7th Cir. 2010)

(citing Saunders v. Mich. Ave. Nat’l Bank

, 278 Ill. App. 3d 307

(1996)).

In determining whether particular conduct is unfair, the

Act dictates that “consideration shall be given to the inter

‐ pretations of the Federal Trade Commission (FTC) and the

federal courts relating to Section 5(a) of the Federal Trade

Commission Act.” 815 ILCS 505/2; see Robinson, 775 N.E.2d4 No. 13

‐ 1560

at 960. The most important of those interpretations are the

“ Sperry factors,” which the FTC has published and the Su

‐

preme Court has cited with approval. Id. See Federal Trade

Comm’n v. Sperry & Hutchinson Co.

, 405 U.S. 233 (1972). Illi

‐

nois recognizes the Sperry test, and so we too will use it as

our point of departure.

The Sperry factors ask whether the practice (1) offends

public policy; (2) is immoral, unethical, oppressive, or un

‐ scrupulous; or (3) causes substantial injury to consumers.

Sperry

, 405 U.S. at 244 n.5. See also Robinson

, 775 N.E.2d at

961. The Illinois Supreme Court has confirmed that “all three

of the criteria in Sperry do not need to be satisfied to support

a finding of unfairness.” Robinson

, 775 N.E.2d at 961; see Peo

‐ ple ex rel. Fahner v. Walsh

, 122 Ill. App. 3d 481, 484 (1984);

Boyd v. U.S. Bank, N.A.

, 787 F. Supp. 2d 747, 751 (N.D. Ill.

2011) (citing additional Illinois state cases). Instead, citing

Cheshire Mort. Serv., Inc. v. Montes

, 223 Conn. 80 (1992) with

approval, the Illinois high court has held that “[a] practice

may be unfair because of the degree to which it meets one of

the criteria or because to a lesser extent it meets all three.”

Robinson

, 775 N.E.2d at 418 (citing Cheshire

, 223 Conn. at

106). Batson’s claim must therefore satisfy at least one of

these criteria, which we now consider.

1. Offense to Public Policy

Batson contends that Live Nation’s practice of including

the price of parking in the cost of the concert ticket violates a

public policy against tying, a public policy in favor of musi

‐

cal diversity, and one in favor of the use of alternatives to

cars as methods of transportation ( e.g., walking or cycling) to

get to concerts. We look at each in turn.No. 13

‐ 1560 5

Tying

. Batson’s first argument presumes that there is a

general public policy against tying, which Live Nation is vio

‐ lating. He insists that he is not alleging that the arrangement

violates either federal or state antitrust law. See Sherman Act

§ 1, 15 U.S.C. § 1; Clayton Act § 3, 15 U.S.C. § 14; 740 ILCS

10/1 et seq. He argues that a tie

‐ in need not violate antitrust

laws in order to offend a broader public policy against tying

arrangements, at least for purposes of the Act. Live Nation

counters that a tying arrangement cannot violate public poli

‐

cy for purposes of the Consumer Fraud Act if it does not vio

‐

late federal antitrust laws. In the alternative, Live Nation as

‐

serts that Batson’s tying argument fails because antitrust

‐

based claims may not be brought at all under the Act, ac

‐ cording to Laughlin v. Evanston Hosp.

, 550 N.E.2d 986 (Ill.

1990).

Live Nation overreads Laughlin, in our view. The court

there was concerned about the possibility that the Consumer

Fraud Act might morph into an additional enforcement

mechanism for all antitrust violations, on the theory that all

such violations reflect unfair practices. It thus wrote that

“[t]here is no indication that the legislature intended that the

Consumer Fraud Act be an additional antitrust enforcement

mechanism. The language of the Act shows that its reach

was to be limited to conduct that defrauds or deceives con

‐

sumers or others.” Id

. at 993. The Illinois Appellate Court fol

‐

lowed this rule when it refused to permit a Consumer Fraud

Act claim to proceed in a case filed against an alleged potash

cartel. See Gaebler v. N. M. Potash Corp.

, 676 N.E.2d 228, 230

(Ill. App. Ct. 1996). See also Zekman v. Direct Am. Marketers,

Inc.

, 695 N.E.2d 853, 859 (Ill. 1998). It remains possible, how

‐

ever, that an unfair practice might be covered by both the6 No. 13

‐ 1560

antitrust law and the Consumer Fraud Act, and so we pro

‐

ceed on the basis of that assumption.

That brings us to the next question: whether, for purpos

‐

es of the Consumer Fraud Act, a tying arrangement can of

‐

fend a public policy against tying arrangements if it does not

violate antitrust law. In this connection, it is worth recalling

the developments in the antitrust law governing tying. At

one time tying arrangements were thought to be so perni

‐

cious that they should be condemned as per se illegal, see,

e.g., N. Pac. Ry. v. United States, 356 U.S. 1, 5 (1958), citing Int’l

Salt Co. v. United States, 332 U.S. 392 (1947). Today, the Su

‐

preme Court takes a much more benign view of tying, rec

‐ ognizing that it may be procompetitive or competitively neu

‐

tral, and thus that it should be illegal only if there is “suffi

‐

cient power in the tying product market to restrain competi

‐

tion in the market for the tied product

... .” Ill. Tool Works Inc.

v. Indep. Ink, Inc., 547 U.S. 28, 36 (2006). In light of that shift,

we reject the idea that there is any undifferentiated policy

against tying reflected in federal law, and to the extent that

Illinois law follows suit, in its law.

Antitrust law has backed away from flat condemnation

of tying arrangements because they are not always abusive,

and when they are not, they are a legitimate method of com

‐ petition. Nothing in the Consumer Fraud Act is designed to

prohibit hard, but fair, competition. We can find no justifica

‐

tion in Illinois law or policy for a rule that would ban a tying

arrangement under the Consumer Fraud Act, even if that ty

‐ ing arrangement were found not to be anticompetitive for

antitrust purposes. Nor has Batson referred us to any case in

which the Illinois Supreme Court has found a tying ar

‐No. 13

‐ 1560 7

rangement to violate Illinois public policy where that ar

‐

rangement has not also violated antitrust law.

The cases on which Batson relies, Elder v. Coronet Ins. Co.

,

558 N.E.2d 1312 (Ill. App. Ct. 1990), and Gainer Bank, N.A. v.

Jenkins

, 672 N.E.2d 317 (Ill. App. Ct. 1996), are not to the con

‐

trary. In Elder

, the court found that denying insurance claims

on the basis of a polygraph test was sufficient to state a cause

of action under the Consumer Fraud Act. Although there

was no specific statute prohibiting insurance companies

from using polygraphs in this way, the court thought the

practice offended the policy against polygraphs “as it has

been established by statutes, the common law, or otherwise.”

Elder

, 558 N.E.2d at 1316. In so holding, it rejected the de

‐

fendant’s contention that there was no established anti

‐ polygraph policy at the time. The court concluded that “the

public policy of the state as established by case law ” rejects

defendant’s use of the polygraph. Id. (emphasis added). The

problem in Elder was thus the use of polygraphs in ways that

decisional law disapproved. In contrast, Batson cites no Illi

‐

nois case in which a court has found that a tying arrange

‐

ment that is permissible for antitrust purposes nonetheless

violates Illinois public policy. Without such authority, Elder is

inapposite.

Gainer does not help either. There, the court allowed an

unfairness claim to proceed based on policies embodied in

another statute that itself did not give a private right of ac

‐

tion. It justified this step because the consumer was “not su

‐ ing under the Act, but invok[ing] it merely to prove viola

‐

tions of the [Consumer Fraud Act].” 672 N.E.2d at 319. But

Batson is not using another statute to prove a public policy

violation under the Consumer Fraud Act. Indeed, he has ex

‐8 No. 13

‐ 1560

pressly disclaimed any intent to use the federal or state anti

‐

trust laws that way.

Batson could still prevail if the forced purchase of park

‐ ing along with the concert violated antitrust law. We agree

with the district court, however, that the allegations to this

effect in Batson’s amended complaint do not survive scrutiny

under Federal Rule of Civil Procedure 12(b)(6). As we noted

earlier, a tying arrangement exists when a seller exploits

power over one product (the tying product) to force the buy

‐

er to accept a second product (the tied product). See Indep.

Ink, 547 U.S. at 36–37. “Such an arrangement violates § 1 of

the Sherman Act if the seller has appreciable economic pow

‐

er in the tying product market and if the arrangement affects

a substantial volume of commerce in the tied market.” East

‐

man Kodak Co. v. Image Technical Servs., Inc.

, 504 U.S. 451, 462

(1992) (internal quotation marks omitted).

Applying those principles here, we would need to find

that Live Nation had enough power in some market (O.A.R.

concerts? Live music concerts? Entertainment in Chicago?)

to permit it to force people to spend money for useless park

‐ ing rights (the tied product). But is it possible to regard

O.A.R. concerts or the Charter One Pavilion as a meaningful

product market? In a related context, we have held that a

single popular venue is not a stand

‐ alone relevant market.

See Elliott v. United Center, 126 F.3d 1003 (7th Cir. 1997). We

are dubious here as well that the Charter One Pavilion in

Chicago has that much clout. Even if it does, however, Bat

‐

son has failed to allege anything that would plausibly show

that Live Nation’s parking tie

‐ in has affected a substantial

volume of commerce in parking (we presume parking in

Chicago, but that is unclear). Indeed, Batson all but concedesNo. 13

‐ 1560 9

this point and instead invites us to break new ground by

finding that a tying arrangement violates federal antitrust

law if its anticompetitive effect is felt in the tying product

market. We decline the invitation. We are not the arbiters of

fair prices for Illinois, and if the requisite market power is

missing, the antitrust laws do not prohibit a seller from ask

‐ ing consumers to pay a higher price for a package.

Musical Diversity; Walking. Batson also argues that Live

Nation’s parking tie

‐ in violates public policy in favor of mu

‐

sical diversity and the encouragement of walking to con

‐

certs. He is grasping at straws. First, as the district court

found, the musical diversity argument was forfeited because

it was perfunctory and underdeveloped. Even on the merits,

there is nothing to these assertions. While Illinois no doubt

supports both musical diversity and walking, the Consumer

Fraud Act is concerned with public policy as established by

statutes and the common law. People ex rel. Fahner

, 122 Ill.

App. 3d at 484. The link between those desiderata and the $9

parking fee is far too tenuous to take this point seriously.

2. Immoral, Unethical, Oppressive, or Unscrupulous

The relevant inquiry here is whether a defendant ʹ s con

‐

duct is “so oppressive as to leave the consumer with little

alternative except to submit to it

... .” Robinson

, 775 N.E. 2d

at 961. As the district court saw, this element is not satisfied

if a consumer can avoid the defendant’s practice by seeking

an alternative elsewhere. See, e.g

., Siegel

, 612 F.3d at 936 (cit

‐ ing Robinson for the proposition that oppression cannot be

proved if plaintiff could have avoided the defendant’s penal

‐

ty provisions by going elsewhere to lease a car).10 No. 13

‐ 1560

Batson contends that he was not informed of the exist

‐

ence of the charge until after he purchased his non

‐

refundable ticket and saw “$9 PRK PAID” on its face. As

‐ suming this is true, as we must, we will assume that there

was no way he could avoid paying that $9. This fact, how

‐

ever, cuts both ways. When Batson purchased the O.A.R.

ticket he was told that it would cost a particular amount, and

he paid that amount. It was only later that he realized what

he paid “for the ticket” actually bundled the costs for the

ticket and parking. (Indeed, it probably bundled much more:

there may have been an opening act before O.A.R. took the

stage; the Charter One Pavilion might have had a policy

banning outside food or drink; and so on.) What we do

know is that Batson was willing to pay the face price in or

‐

der to see O.A.R. He may be trying to argue that he paid an

overcharge in the amount of $9, but there is nothing in this

record to indicate that there was anything oppressive about

the full price. Moreover, “[a]s the Supreme Court of Illinois

instructs

... , ‘charging an unconscionably high price gener

‐ ally is insufficient to establish a claim of unfairness.’ Robin

‐

son, 201 Ill. 2d at 418.” Siegel v. Shell Oil Co.

, 656 F. Supp. 2d

825, 833 (N.D. Ill. 2009), aff ʹ d

, 612 F.3d 932 (7th Cir. 2010).

Batson offers, as persuasive authority, the district court’s

opinion in Thompson v. Fajerstein, No. 08 C 3240, 2008 WL

4279983 (N.D. Ill. 2008), but we do not think it helps him. In

Thompson

, the plaintiff had met with the defendant, a pur

‐ ported diamond buyer, and asked him to obtain a very spe

‐

cial diamond for his wife. The defendant agreed to do so,

asking for $150,000 up front to conduct the search. The plain

‐

tiff gave him the money and told him what he wanted (and

did not want) in the diamond. Defendant eventually found a

diamond that fit the bill, but he said it would cost $450,000,No. 13

‐ 1560 11

$150,000 more than what plaintiff originally wanted to

spend. Plaintiff said he was interested, but he asked the de

‐

fendant first to provide him with a certification of the jewel’s

properties from the Gemological Institute of America. When

plaintiff received the certificate, he found that the stone had

qualities he had specifically nixed (strong blue fluorescence

— something his wife did not like) and that it was actually

worth only about $300,000. Plaintiff then asked for his

$150,000 back, but the defendant evaded him. Thi s is an ex

‐ ample of abusive circumstances. The defendant in Thompson

was holding $150,000 hostage, putting plaintiff in the posi

‐

tion of losing that money or getting an overpriced diamond

he did not want and never agreed to buy. In our case, Batson

was told how much the ticket would cost before he handed

over his money. Even if he learned about the $9 parking

component afterwards, there is no evidence that the concert

was worth any less than the face price of the ticket.

While we understand why a consumer who does not

want parking would prefer to purchase a concert ticket un

‐

bundled from that benefit, there is no rule that requires eve

‐ rything to be sold on a fully unbundled basis. Nothing could

have stopped Live Nation from erasing “$9 PRK PAID,”

charging $9 more for the ticket, and announcing that there

was “free” parking for all who needed it. And indeed, as a

result of backlash against the parking fee, it appears that

Live Nation has done just that. See Hilary Lewis, Latest Tick

‐ eting Scandal: Live Nation’s Secret Parking Fee

, B USINESS

I NSIDER (Mar. 18, 2009, 8:52 PM),

http://www.businessinsider.com/latest

‐ ticketing

‐ scandal

‐

live

‐ nations

‐ secret

‐ parking

‐ fee

‐ 2009

‐ 3 (“[Live Nation] recent

‐ ly unveiled a $6

‐ per

‐ ticket parking charge for shows at New

Jersey’s PNC Bank Arts Center. Yesterday, in the wake of12 No. 13

‐ 1560

complaints, Live Nation eliminated the itemized fee from its

Web site, only to add it to the basic ticket price.”).

3. Substantial Injury to Consumers

The third Sperry factor asks whether defendant’s practice

caused substantial injury. It does so only if the injury is (1)

substantial; (2) not outweighed by any countervailing bene

‐

fits to consumers or competition that the practice produces;

and (3) one that consumers themselves could not reasonably

have avoided. Siegel

, 612 F.3d at 935. See also Cheshire Mort.

Serv., Inc. v. Montes, 223 Conn. 80, 113 (1992).

We assume for the sake of argument that the parking fee

here meets the first two criteria. This brings us to the third

question, that is, whether the fee could reasonably have been

avoided. The district court found that Batson could have

done so by choosing not to go to the O.A.R. concert and opt

‐ ing instead for alternative entertainment. While in general

we agree with this analysis, there is a separate issue related

to the non

‐ refundable nature of the ticket. Batson was una

‐

ware of the parking fee before he bought the ticket, and once

he learned about it, he was stuck with the purchase. That

takes us back to the question whether the full price was op

‐ pressive, however, and we already have explained that there

is nothing in Batson’s complaint that would permit such a

finding. We therefore conclude that Batson has failed to state

a claim under Illinois’s Consumer Fraud Act.

**********************

There are times when consumers are required to accept a

package deal in order to get the part of the package they

want. An airline passenger with no luggage may prefer the

cost of baggage to be decoupled from the cost of a seat, and aNo. 13

‐ 1560 13

law student may prefer to pay lower tuition and avoid “free”

pizza days. But while some people may find these bundles

annoying, or even unfair, the tie is not illegal unless the

standards set forth in the governing antitrust cases have

been met. (Batson did not allege that the offer of a parking

place was fraudulent because all places were filled; we thus

have nothing to say about that or any other variation on the

facts before us.) We A FFIRM the district court’s dismissal of

Batson’s claim.