The Washington Commanders organization has agreed to pay a $425,000 fine to the District of Columbia and make $200,000 in repayments to ticket holders whose security deposits were "unlawfully" withheld, the District's attorney general announced Monday.
The settlement comes after a lawsuit filed by the District late last year, which alleged that the Commanders systematically withheld security deposits from some ticket holders and "intentionally created barriers" for ticket holders to get their refunds, in violation of D.C. law, a news release from D.C. Attorney General Brian Schwalb's office said.
"Rather than being transparent and upfront in their ticket sale practices, the Commanders unlawfully took advantage of their fan base, holding on to security deposits instead of returning them," Schwalb said in Monday's release.
According to an investigation, the football team offered multi-year contracts to fans seeking premium game tickets, but to secure those contracts, fans had to "pay a substantial security deposit, which the team represented would be returned within 30 days of the contract's expiration," the D.C. attorney general's office said. However, the team "deceptively" kept many of these security deposits for years after the contracts expired, Schwalb's office said.
Rather than being transparent and upfront in their ticket sale practices, the Commanders unlawfully took advantage of their fan base, holding on to security deposits instead of returning them.
D.C. Attorney General Brian Schwalb
The team also imposed additional "cumbersome" requirements for ticket holders to reclaim their deposits, beyond those initially stated in the contracts, Schwalb's office said.
As of March, the Commanders still held more than $200,000 in unreturned security deposits paid by D.C. consumers, the attorney general's office said. As part of the agreement, Pro-Football Inc., the corporation that owns the Commanders, must repay the funds to those affected, and Schwalb said his office will make sure that the organization follows through.
"Under this settlement agreement, our office will maintain strict oversight over the Commanders to ensure all necessary steps are taken to reimburse fans for the refunds they are entitled to," Schwalb said in the release.
His office said the Commanders must conduct public records searches for the most recent contact information for affected fans and attempt to notify them via letter, phone and email; prominently disclose the refund process on the team's website, and provide regular reports to the attorney general's office about their progress in returning the money to fans.
In a statement, the Commanders responded: "We have not accepted security deposits or seat licenses in more than a decade and have been actively working to return any remaining deposits since 2014. We are pleased to have reached an agreement on the matter with the DC Attorney General and will work with the office to fulfill our obligations to our fans."
Schwalb's office said the team was alerted by an employee in 2009 that these practices violated the contracts' terms but the actions continued.
"As a result of these deceptive practices, the team illegally withheld hundreds of thousands of dollars from District residents," he said.
Investigations into how the team handled ticket holder security deposits started after congressional oversight hearings last year, when a former team executive testified about the refund policy. After that, the attorneys general from D.C. Maryland and Virginia all launched independent investigations. So far, the team has settled with D.C. and Maryland.
The $425,000 fine the team agreed to pay the District is for restitution, attorneys' fees, costs associated with the investigation, and contributions to the District’s litigation support fund, Schwalb's office said.
You can read the full settlement agreement on the website of the D.C. attorney general's office online here.
Maryland settled a similar claim late last year, imposing a $250,000 fine.
A spokesperson for Virginia's attorney general says their investigation into the matter is ongoing.
The D.C. attorney general's office has a second lawsuit still pending against the Commanders, alleging the team mislead the public about a toxic workplace environment and sexual harassment in the Commanders organization. Schwalb said Monday that he expects that case to proceed to trial.
