Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ill.: Rooftop owners denied TRO to stop construction of outfield signs at Wrigley Field, (Feb 20, 2015)

By Linda O’Brien, J.D., LL.M.

In an action against the Chicago Cubs baseball club and its team chairman for attempted monopolization and breach of contract, the federal district court in Chicago has denied a motion for temporary restraining order, brought by the owners of rooftop businesses across from Wrigley Field, seeking to halt the installation of outfield signage obstructing their views of the field (Right Field Rooftop, LLC v. Chicago Baseball Holdings, LLC, February 19, 2015, Kendall, V.).

Since the stadium’s construction, several apartment buildings existed across from Wrigley Field from which spectators could view Chicago Cub games and other events taking place inside the stadium. In 2004, the Cubs’ previous owners filed suit against the rooftop businesses for misappropriation of the Cub’s property by charging admission fees to watch Cubs games from their rooftops. The parties entered into an agreement under which the rooftop businesses were granted licenses to sell these tickets in exchange for a percentage of each rooftop’s gross revenues.

In 2009, the Ricketts family purchased the Chicago Cubs and Wrigley Field, subject to the rooftop license agreement. In April 2013, the Cubs announced plans to renovate Wrigley Field, including the installation of new outfield signage. In January 2015, neighboring rooftop businesses filed suit, alleging that the baseball club and team chairman Tom Ricketts attempted to monopolize the views of the events and violated the terms of the revenue-sharing contract by planning the installation of outfield signage that would block views from their businesses. Before the court was a motion by the rooftop businesses for a temporary restraining order (TRO).

The standard for the issuance of a TRO is the same as that required to issue a preliminary injunction. To obtain a preliminary injunction, the movant must demonstrate a likelihood of success on the merits, irreparable harm absent injunctive relief, and the lack of an adequate remedy at law, the court explained.

Contract claims. In denying the motion for a TRO, the court first noted it was unable to conclude that the rooftop businesses have a likelihood of success on the merits of their contract claims. The revenue-sharing contract prohibits the Cubs from erecting any barriers to obstruct the rooftops’ views but provides that any expansion of Wrigley Field with government approval did not violate the agreement. It is undisputed that the Cubs received government approval for their proposed renovation. Both parties at the current stage of the proceedings offered plausible interpretations of the term “expansion” in their contract. A thorough analysis of the contract and its terms was best suited for the preliminary injunction hearing and need not be considered in granting emergency relief, the court determined.

Antitrust claims. The rooftop businesses did not demonstrate a negligible likelihood of success on their antitrust claims. The plaintiffs argued that the Cubs engaged in strong-arm negotiations to control ticket pricing and threatened to block the views of rooftops with outfield signage. According to the court, statements that a party intends to compete, even if perceived as threats, were not unlawful absent anticompetitive conduct. The plaintiffs failed to show that the defendants’ conduct was anything other than a valid business objective.

The plaintiffs presented no evidence that the Cubs were attempting to exercise monopoly power to construct the outfield sign. Instead the defendants were exercising common law property rights to modify their real property as they saw fit. The Cubs received government approval to make the proposed changes to the stadium. The Sherman Act protects competition and does not reach conduct that is only “unfair, impolite, or unethical,” in the court’s view.

Irreparable harm. The plaintiffs’ argument that their businesses would be destroyed without a TRO and the destruction of their business constituted irreparable harm was rejected. The court found that there was no evidence showing the businesses would become insolvent without a TRO before the preliminary injunction hearing. Whether the businesses could operate during this time depended significantly on their operating expenses and assets. Even if it was prime time to sell tickets for the upcoming season, any lost revenue would be easily ascertainable and remediable through monetary damages.

Additionally, any harm that the rooftop businesses might suffer before the preliminary injunction hearing was entirely financial in nature. The dispute between the parties concerned a fixed length contract and the plaintiffs had no expectation that they would be able to maintain their businesses after the contract expiration.

Public interest. In balancing the harms to the parties, the court determined that the TRO could cause significant hardship to the Cubs if construction of the signage was halted. The Cubs have purchased the construction materials and entered into sponsorship agreements for the signs. Any delay in construction would cause the stadium to remain under construction upon its opening day and there is no time to redesign the project before that date.

Moreover, since they sold a substantial portion of their tickets for the season, the monetary loss to the rooftop businesses will be at most a small portion of their annual revenue. The opening day for baseball was two months away and there was no risk of the rooftops missing a game in the absence of a TRO, the court concluded.

The case is No. 15 C 551.

Attorneys: Abraham E. Brustein (DiMonte & Lizak) for Right Field Rooftops, LLC, 3633 Rooftop Management, LLC, and Rooftop Acquisition, LLC. Andrew A. Kassof (Kirkland & Ellis LLP) for Chicago Cubs Baseball Club, LLC, Wrigley Field Holdings, LLC, and Chicago Baseball Holdings, LLC.

Companies: Right Field Rooftops, LLC; Right Field Properties, LLC; 3633 Rooftop Management, LLC; Rooftop Acquisition, LLC; Chicago Baseball Holdings, LLC; Chicago Cubs Baseball Club, LLC; Wrigley Field Holdings, LLC

Cases: Antitrust IllinoisNews