Two concertgoers reached a $155,000 settlement with Verizon Arena after claiming that its public board forged an illegal contract with Ticketmaster and charged patrons undue fees, both claims the arena denies.
Pulaski County Circuit Judge Wendell Griffen approved the settlement reached between Keith and Sharon Watkins and the Multi-Purpose Civic Center Facilities Board for Pulaski County.
The board, established under a Pulaski County ordinance, owns and operates the 18,000-seat North Little Rock venue.
Lawsuits against Verizon Arena's ticket fees have wound through Arkansas courts for several years. Both parties cited the cost of litigation as a reason to settle.
As part of the settlement, the board will pay $150,000 in the Watkinses' legal fees and a $5,000 "incentive award" to the couple.
Anyone who bought a ticket through Ticketmaster, the arena's exclusive ticket retailer, for an event between Sept. 18, 2011, and Dec. 31, 2015, is entitled to a $4 discount coupon, the settlement says.
The coupon is good for food and non-alcoholic beverages sold at concessions. It expires on Dec. 31, 2019.
The board also must open the door to a competitive bidding process when its current contract with Ticketmaster expires in 2023.
In agreeing to the settlement, the board did not admit to any wrongdoing or that the Watkinses made any valid claims.
Under Arkansas Code 14-137-101, cities and counties can create facilities boards to shepherd public improvement projects.
In 1995, Pulaski County created the five-member Multi-Purpose Civic Center Facilities Board to oversee what would become Verizon Arena.
The county judge appoints the members, and the Quorum Court approves them. On Tuesday, the Quorum Court approved the board's newest member, Keili Minix, for a five-year term.
Once municipal governments create facilities boards, they become "separate and distinct entities" from that municipality, county attorney Adam Fogleman said.
"We don't exercise any influence in [the board's] decision-making," said Barry Hyde, county judge of Pulaski County, who noted that Verizon Arena was established with taxpayer dollars but does not currently receive any city or county funds.
According to online county records, May 2009 was the last time the county appropriated money to the civic center board.
The lawsuit, filed in September 2014 and settled on Jan. 19, says the board receives public funds from the state's general revenue.
The board first signed a contract with Ticketmaster in 1999 and most recently renewed that contract in 2016.
In the 2009 version of the contract, available in court filings, Ticketmaster outlined a convenience charge pricing scale for every ticket amount. For a $65 ticket, a $7.50 convenience charge is added.
Ticketmaster can also charge a $3.75 processing fee per order for each person ordering tickets via telephone or online, the contract says.
The board earns a sales royalty of 40 percent to 50 percent of each charge and fee waged, depending on the year.
These charges "do not bear any relationship to the cost of any service being provided nor are they related to a patron's use of the Arena," attorneys Rodney Moore, Dan Turner and Todd Turner argued in the lawsuit.
"Instead, these charges result in profit, which is split between the Facilities Board and Ticketmaster," the complaint says.
Ticketmaster also paid the board a $400,000 signing bonus and an $85,000 advertising allowance, the contract says.
That $400,000 payment was an incentive for the board to extend and amend its exclusive agreement with Ticketmaster, the lawsuit alleges.
Moore, Turner and Turner also claim that the board paid Ticketmaster's legal fees and paid more than $50,000 to lobbyists, who advanced Ticketmaster's agenda.
The board, a county entity, never went through the legal process for seeking contracted work, according to the lawsuit.
"They're a county board," Todd Turner said, "and so they have to follow the county purchasing procedures, which means they have to take bids for contracts, which we don't believe they did properly."
Fogleman deferred a question about whether the board must follow county purchasing procedures to the board's counsel.
Chad Pekron of Quattlebaum, Grooms and Tull PLLC represented the board in the lawsuit. He said he could not comment on the case, citing the terms of the settlement.
In court filings, Pekron aggressively denied every allegation of wrongdoing.
The notion that Verizon Arena paid money to Ticketmaster was a "failed attempt at linguistic gymnastics" by the Watkinses, Pekron wrote in a November 2014 filing.
Years of case law backed up the board's agreement with Ticketmaster, the document says.
If the board was required to vote every time public funds were spent, as the Watkinses claimed, members would vote "every time the concession stand required hot dogs," Pekron wrote.
The funds at issue are not public because the money is in the hands of Ticketmaster, Pekron wrote.
And because money flowed from Ticketmaster to Verizon Arena, and not the other way around, bidding requirements "are not applicable in any event," he wrote.
"In short, there is nothing 'illegal' about the agreement between Verizon Arena and Ticketmaster," the document says.
"While plaintiffs obviously do not like that agreement -- nor, as seen by their three consecutive lawsuits challenging it, does their counsel -- mere disapproval does not give rise to an illegal exaction claim."
The same three attorneys previously filed two lawsuits over Verizon Arena fees.
In 2012, one of those cases reached the Arkansas Supreme Court. The justices ruled that Ticketmaster violated the state's ticket-scalping law by charging more than box-office prices for event tickets.
The ruling allowed the case to go forward in federal court. That case, and the other one, were dismissed without a judgment.
With the settlement, Turner said, "I think we protected the consumers and the taxpayers by making sure this public board will properly request bids for contracts, and make sure that the contracts are in compliance with Arkansas law."
Hyde said he did not think the board was in violation of any state law on how it handled tickets.
Michael Marion, general manager of Verizon Arena, did not respond to voice mail messages left Thursday and Friday requesting comment.
In November, when a preliminary settlement was reached, Verizon Arena emailed a notice to 111,214 unique email addresses belonging to people eligible for the $4 coupon, Marion stated in a court filing.
Metro on 01/28/2018