Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Rooftop owners seek TRO to halt construction of outfield signs at Wrigley Field, (Feb 18, 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, owners of rooftop businesses across from Wrigley Field have filed a motion for temporary restraining order to prohibit the installation of outfield signage obstructing their views of the field (Right Field Rooftop, LLC v. Chicago Baseball Holdings, LLC, February 12, 2015).

Wrigley Field serves as the home of the Chicago Cubs professional baseball team. Since the stadium’s construction, several apartment buildings existed across from Wrigley Field from which spectators could view events taking place inside Wrigley Field. Neighboring property owners gradually transformed their flat-top roofs into bleacher style grandstands and formed businesses to serve the market for viewing Cubs games and other Wrigley Field events from the rooftops. After then-Cubs-owner Tribune Company erected a large windscreen at Wrigley Field affecting views from the rooftop businesses, the businesses filed suit. The Cubs and the rooftop businesses reached a settlement, under which the Cubs agreed not to erect barriers that would block the rooftop businesses’ views in return 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 January 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 Cubs baseball club and team chairman Tom Ricketts violated the terms of the revenue-sharing contract by planning the installation of outfield signage that would block views from their businesses.

In support of their motion for a temporary restraining order (TRO), the plaintiffs contend that the installation of the outfield signage directly in front the rooftop businesses will completely destroy those businesses as they will no longer have views into Wrigley Field. Although there are no baseball games until April 5, the plaintiffs book events months in advance and are having difficulties booking events due to the threat of having signage installed in front of their buildings. The plaintiffs alleged that they will be unable to sell any tickets if the outfield sign is installed and their very purpose for existence will cease.

Moreover, the plaintiffs claim that they did not delay in seeking injunctive relief. Their complaint was filed six weeks after the defendants announced plans to install the outfield signage, and the motion for TRO was filed three weeks after the defendants obtained a permit to install the signs. The defendants have exclusive control over the timing of the sign installation and could delay such installation until a preliminary injunction hearing takes place. While an expedited preliminary injunction hearing is desirable, the plaintiffs require certain limited discovery to secure necessary evidence to present their case, according to the plaintiffs’ motion.

In response, the defendants argue that the plaintiffs cannot show they will irreparably harmed before a preliminary injunction hearing, since they have been aware on the sign’s construction for over four months. There is no urgency to justify a TRO, as the plaintiffs have admitted they knew the proposed sign would obstruct their views since May 2013, according to the defendants. The defendants argued that plaintiffs cannot open for business until April 5 and, although they may suffer some future revenue loss, there is no immediate and irreparable harm required for a TRO.

A TRO is an extraordinary and drastic remedy that should not be granted unless the movant carries the burden of persuasion by a clear showing. In this case, the plaintiffs viewed a mock up of the sign in May 2013, hired a consultant to determine how their views would be affected by the sign, and viewed a model of the sign in July 2014 that showed the impact that the sign would have on their views. Yet the plaintiffs waited seven months to file a complaint and another three weeks to request a TRO, the defendants contend.

On February 17, the defendants moved to dismiss the plaintiffs’ complaint for failure to state a claim. In their memorandum in support of their motion, the defendants assert that the license agreement between the Cubs and rooftop owners expressly and unambiguously allows the defendants to undertake expansion of Wrigley Field with government approval. The defendants received government approval of all aspects of the Wrigley Field expansion project, including additional outfield signage. The plaintiffs cannot transform a contract dispute into an antitrust claim, the defendants’ motion asserted.

According to the motion, the U.S. Supreme Court has exempted the business of baseball from antitrust scrutiny in its decision, Flood v. Kuhn, 407 U.S. 258 (1932). The plaintiffs’ two antitrust claims fall squarely within the antitrust exemption as they both relate to selling tickets to view baseball games — an activity which is at the core of the business of baseball.

Additionally, the plaintiffs’ attempted monopolization claim fails as a matter of law, since they cannot allege either a dangerous probability of achieving monopoly power in the relevant market or an anticompetitive act. The Seventh Circuit has already rejected in Elliott v. United Center, 126 F.3d 1003 (1997) that a single major Chicago sports venue could constitute its own market. Moreover, the plaintiffs cannot base their claim on the defendants’ allegedly taking over the distribution of their own product. The plaintiffs have conceded that the right to view live Cubs games belongs to the defendants, while the plaintiffs’ product is to simple view the defendants’ product. No matter how the case is decided, the plaintiffs will still own their buildings and can sell or rent the space, the defendants claimed.

Finally, the defendants charged that plaintiffs cannot base their attempted monopolization claim on any of the conduct alleged in the complaint. The installation of the outfield signs at Wrigley Field and any efforts to purchase rooftop businesses are not anticompetitive activities. The Cubs have a legal right to expand the property they own, and the plaintiffs should have been aware that their relationship with the defendants was temporary and subject to the defendants’ business judgment, in the defendants’ view. Any alleged efforts by the defendants to purchase other rooftop businesses, which would allegedly increase ticket prices, would benefit the plaintiffs and not cause them antitrust injury, according to the defendants’ motion.

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

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

News: Antitrust IllinoisNews