DATE: January 14, 1998
FROM: Sid Hemsley
TO: Rex Barton
SUBJECT: Regulating ticket scalping on city streets
You have the following question: Can the city prohibit the “scalping” of tickets on city streets? The question arises from the sale along the streets leading to the speedway of tickets to races there.
The answer is yes. However, the prohibition should be on the sale of tickets (and other goods and services) rather than on ticket “scalping,” as that term is commonly understood.
It is said in 9 McQuillin, Municipal Corporations, section 26.150.35, that:
Under its police powers, a municipality may require a license to engage in the business of reselling tickets for admission to places of public entertainment. Further, while there is authority that a municipality may not prohibit “scalping,” or the resale of those tickets at a price greater than the originally advertised price, the weight and trend of authority is to the contrary. Also, a city ordinance is constitutional although it prohibits scalping tickets to events held at municipally-owned facilities but does not similarly forbid that activity at privately-owned facilities.
Only one Tennessee case deals with the prohibition of scalping. State v. Spann, 623 S.W.2d 272 (Tenn. 1981), deals with the question of whether the state statute prohibiting scalping is constitutional. The statute in that case prohibited the sale of tickets for more than their face or standard retail value. The Court upheld the statute on the ground that it is within the police power of the state to regulate scalping. As far as I can determine, the General Assembly has never expressly granted to municipalities the police power to prohibit ticket scalping.
Neither McQuillin nor Spann deal with your question, because they relate to ticket “scalping,” rather than to the traffic problems created by ticket sales in street rights-of-way. For that reason, we need not further pursue the question of whether municipalities have the police power to prohibit ticket “scalping.” The city is not interested in prohibiting ticket-scalping per se; it wants to prohibit the sale of tickets on street rights-of-way leading to the speedway, regardless of the price at which they are sold, because of the enormous traffic congestion such sales create. In my opinion, the city already has that power.
Municipalities in Tennessee have broad police powers over their streets, including those streets designated state highways. (In fact, state highways in municipalities are merely municipal streets over which state traffic is routed.). [Collier v. Baker, 27 S.W.2d 1085 (Tenn. 1930); Brimer v. Municipality of Jefferson City, 216 S.W.2d 1 (Tenn. 1948); Paris v. Paris-Henry County Public Utility District, 340 S.W.2d 885 (Tenn. 1960).]
That police power undoubtedly includes the right to prohibit or regulate the sale of goods and services in those streets. In fact, municipalities probably have the legal duty to prohibit or regulate such activities when they interfere with the safe and convenient flow of traffic, and to otherwise keep their streets safe for passage. [City of Nashville v. Hager, 5 Tenn. Civ. App. (Higgins) 192 (1914); State v. Stroud, 52 S.W. 697 (Chan. App. Tenn. 1898); Stewart v. Illinois Central Railroad Co., 143 Tenn. 146 (1920); Harkins v. Ramsey, 373 S.W.2d 1 (1954); Nashville v. Nevin, 12 Tenn. App. 336 (1930); Niblett v. Mayor of Nashville, 59 Tenn. 684 (1874); McHargue v. Newcomer & Co., 110 S.W. 700 (1906).] It has also been specifically held that a municipality has the authority to pass an ordinance prohibiting the sale of merchandise on streets in areas designated by the city as congested. [Dooley v. Cleveland, 135 S.W.2d 649 (Tenn. 1940)].
Prohibitions on the conduct of business in the street rights-of-way leading to the speedway should be general rather than related only to ticket sales. Ordinances to be valid must accomplish the purpose for which they are intended. [H & L Messengers, Inc. v. City of Brentwood, 577 S.W.2d 444 (Tenn. 1979).] An ordinance which prohibited only the sale of tickets, but permitted the sale of say, food items, in its street rights-of-way, would probably fail in its purpose to promote the safe and convenient passage of traffic. It would be difficult for the city to show that the sale of food items creates less of an impediment to the safe and convenient flow of traffic than does the sale of tickets. In addition, a general prohibition on sales of all merchandise heads off charges of the discriminatory application of the ordinance.