Update on the Panini and Topps Trading Card Lawsuits

Just over four months ago, I published an article on Conduct Detrimental about the pending cases against popular sports trading card companies Panini and Topps. Since then, many people wrote to me asking for an update and whether there has been any conclusion. I plan to provide that update here.

For a summary of the initial filings made in early 2022; see my previous article here.

In March of 2022, Panini and Topps faced legal complaints relating to consumer fraud. The allegations were similar in that Plaintiff accused both companies of deceiving consumers by using false, unlawful, and deceptive representations to affect the consumer’s purchasing decisions.

One clarification I would like to add is that these cases are not surrounding the frustrations consumers face when it comes to redeeming their Redemption Cards. That is a separate (and albeit important) issue altogether.

These cases center around the companies' choice of how they avoid running afoul of state lottery laws. States define lotteries as paying money for the chance to win a certain item. Trading card packs fit into this category as consumers pay the price of the trading card pack to win one of the rare cards that could potentially be inside. To avoid violating lottery laws, the companies include No Purchase Necessary (NPN) instructions on the trading card packs.

For example, on a pack of Panini Flux 2020-2021 Inaugural Edition, it reads:

NO PURCHASE NECESSARY: Open only to U.S./Canadian (except Quebec) residents. For chance to obtain any of the cards listed above, at the same odds, hand print your name and complete address on a 3 x 5 card and mail in a #10 envelope to: Panini America Inc., NPN, 2020-21 Panini Flux Basketball, 5325 FAA Blvd., Suite 100, Irving, TX 75061-3601.

While companies provide NPN instructions, the Plaintiff side argues that the way in which the company displays them forces consumers to purchase the product before they can enter the contest. Many of those who collect cards have realized the main problem. Usually, the packs are in a sealed box which would have to be purchased before the consumer can view them.

So what has happened since the Plaintiff filed these cases in March of 2022?

In the Panini case filed in the United States District Court for the District of Columbia, the case was dismissed due to the court’s lack of subject matter jurisdiction. Subject matter jurisdiction is spelled out in Article III of the Constitution and is a bar used to determine whether or not a certain court should rule on a case. A court that lacks subject matter jurisdiction will dismiss the case immediately. It is on the burden of the Plaintiff to establish that they have the standing necessary to establish subject matter jurisdiction.

In this case, the court set the standard for establishing standing as “plaintiff must allege sufficient facts to show the following: (1) an injury in fact that is concrete and particularized, (2) an injury that is actual or imminent, not conjectural or hypothetical, (3) a causal connection between the injury and the conduct complained of and a likelihood that a court ruling in plaintiffs' favor would remedy their injury"

In the end, the court found that there was no injury in fact. While the Plaintiffs alleged injury through overpayment or a procedural violation, the court found those injuries unpersuasive. They noted that she continually bought boxes over a long period of time and should have been aware of the NPN instructions. The court also stated that she purchased the box for the value of the cards, not the chance to enter the NPN contest. Therefore the case has been dismissed with prejudice as the court found that any amendment to the complaint would be futile. The court dismissing the claim with prejudice means that they will be unable to refile the case in D.C. district court.

In the Topps case filed in the United States District Court for the Southern District of New York, This case dove into the merits of the arguments focusing on violations of New York's General Business Law (GBL), breach of express and implied warranties under the Magnuson Moss Warranty Act (MMWA), negligent misrepresentation, fraud, and unjust enrichment. The Defendant, in this case, filed an answer which argued that, “the GBL claims lack a New York nexus, that the breach of warranty claims were not preceded by pre-suit notice, that the MMWA claim falls with the state law breach of warranty claims, that the fraud claim fails to plead the requisite intent, and that the unjust enrichment claim is duplicative.”

The court found the Defendant’s arguments persuasive and dismissed the case. Just as the D.C. case against Panini, this case was also dismissed with prejudice.

It seems that, for the moment at least, both Panini and Topps escaped these lawsuits prior to trial based on different arguments. Both of these cases were dismissed based on the position of the plaintiff and not based on the merits of the actual claims. It will be interesting to see if another Plaintiff files a lawsuit against the card manufacturers for this issue or others surrounding the trading card space.

Justin Mader is a recent graduate of the University of New Hampshire Franklin Pierce School of Law where he earned a J.D. and a Sports and Entertainment Law Certificate. He can be reached via Twitter: @maderlaw and LinkedIn at https://www.linkedin.com/in/justin-mader-15a602119/.