Nov 23 (Reuters) - A federal appeals court on Wednesday
dismissed two lawsuits filed by the City of Chicago against
online ticket reseller StubHub Inc and its parent company eBay
Inc over the collection of municipal taxes.
The 7th Circuit Court of Appeals upheld a lower court's
dismissal of the cases after the Illinois Supreme Court ruled
in October that Chicago could not collect an amusement tax from
the auction sites.
San Francisco-based StubHub, which describes itself as the
world's largest online ticket marketplace, operates a website
where users can buy and sell tickets to events around the
country. In 2008, Chicago sued StubHub and eBay under a
municipal law that required ticket resellers and their agents
to collect and remit a tax on the difference between the
original ticket price and the resale price.
After the federal district court dismissed the cases in
2009 and the city appealed, the 7th Circuit asked the Illinois
Supreme Court to determine whether state law prevented Chicago
from imposing the tax on the online ticket platforms.
The Illinois Supreme Court ruled that while the state has
the authority to levy the amusement tax, the city does not. The
high court found that the state legislature intended to allow
internet auction listing services to opt out of local tax
The 7th Circuit implemented that ruling on Wednesday,
affirming the lower court's decision to dismiss the cases.
Chicago had asked the appeals court to delay its ruling while
it requested a rehearing from the Illinois Supreme Court, but
the 7th Circuit refused.
"The request strikes us as pointless stalling. This
litigation has been pending long enough," the three-judge panel
A spokesman for Chicago's law department said lawyers for
the city were reviewing the decision and could not yet comment.
StubHub and eBay did not immediately respond to requests
The cases are City of Chicago v. StubHub! Inc, U.S. Court
of Appeals for the 7th Circuit, Nos. 09-3432, 10-1144.
For Chicago: Julian Henriques of the City of Chicago Law
For StubHub and eBay: Timothy Bishop and Michele Odorizzi
of Mayer Brown.
(Reporting by Terry Baynes)
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