Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Chicago film studio claims state agency, official conspired to restrain trade, (May 11, 2015)

By Greg Hammond, J.D.

Chicago Studio Rental Inc., a company that operates film and television production studio facilities and equipment in Chicago, Illinois, has filed suit against the Illinois Department of Commerce and Economic Opportunity (IDCEO) and Betsy Steinberg, the former Managing Director of the Illinois Film Office, alleging antitrust violations, discrimination, and due process violations. The suit was brought in the federal district court in Chicago (Chicago Studio Rental Inc. v. Illinois Department of Commerce and Economic Opportunity, May 8, 2015).

The Illinois Film Office, a component of the IDCEO, was created with the purpose to support film, television, and commercial production activity in Illinois. Chicago Studio provides production facilities for many Hollywood-based producers, along with other film, television, and commercial producers seeking to film in Chicago.

Chicago Studio asserts that the IDCEO and Steinberg, presided over by former governor Pat Quinn, conspired with Cinespace to direct Chicago-oriented producers to Cinespace and to implement an illegal boycott of Chicago Studio. Specifically, Chicago Studio asserts three claims: (1) violation of equal protection of the laws; (2) violation of the Sherman Act; and (3) violation of the right to due process of law.

The complaint asserts that the defendants’ conduct with Cinespace constituted a division of the Chicago Film Production Market under which the IDCEO directs all or most Chicago-oriented Producers to Cinespace Chicago and implements a boycott of Chicago Studio. Alternatively, Chicago Studio claims that the defendants and Cinespace conspired to monopolize, specifically intended to monopolize, and have taken overt acts in furtherance of their conspiracy. Specifically, Chicago Studio claims that the following actions reflect the defendants’ agreement to boycott Chicago Studio and an intention to monopolize: (1) not showing or referring to Chicago Studio when Chicago-oriented producers sought studio space; (2) not giving Chicago Studio a chance to bid for production opportunities; (3) not including Chicago Studio in virtually any meetings and events to promote activities in the Chicago Film Production Market; (4) fostering the perception among Chicago-oriented producers that they should or must use Cinespace facilities; and (5) supporting roughly $17 million in state grants to Cinespace, while informing Chicago Studio that no funds were available.

Chicago Studio seeks treble damages for the injuries it suffered due to the defendants’ violations of the Sherman Act, along with attorney fees and costs. In addition, Chicago Studio seeks damages caused by denying plaintiffs the equal protection of the laws and damages resulting from the defendants’ failure to comply with their duties under the due process of law clause of the U.S. Constitution.

The case is No. 1:15-cv-04099.

Attorneys: Santo J. Volpe (Santo J. Volpe & Associates) for Chicago Studio Rental Inc.

Companies: Chicago Studio Rental Inc.; Chicago Studio Real Estate Holdings, LLC; Illinois Department of Commerce and Economic Opportunity

News: Antitrust IllinoisNews