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Rooftop Owners Call Foul On Cubs' Conduct On Renovations

The Chicago Cubs were sued Tuesday by rooftop club owners across from Wrigley Field alleging the team is trying to strike them out of the market for live games by erecting obstructive signs and making misleading comments as part of a smear campaign to drive consumers away from their businesses.

The suit accuses the team, which won approval in July for a revision to its $300 million Wrigley Field renovation plan that would allow it to erect seven outfield seven outfield signs, of violating the Sherman Act by placing the signs in areas that block the rooftop sightlines of its competitors' businesses.

The suit also accuses Cubs owner Thomas S. Ricketts and other team officials of violating the Lanham Act by making deceptive and defamatory public statements insinuating that the rooftop owners were thieves who are stealing the Cubs' property by allowing patrons to watch their games, even though the businesses are licensed by the city operate and pay the team millions in yearly fees to do so. The comments purportedly led to public calls that the rooftop businesses be boycotted and led to a loss of sales.

“The Cubs organization is engaged in willful anticompetitive conduct in an attempt to acquire greater, and maintain its existing, monopoly power in a relevant market,” the complaint said.

Led by plaintiff Right Field Rooftops LLC, the suit said that in 1998 the city passed an ordinance without any objection from the team that allowed the rooftop businesses to operate as special clubs under license from the city.

In 2004, the rooftop owners reached a settlement with the Cubs to end a previous dispute over rooftop sightlines. The deal called for the rooftop owners to pay the Cubs a 17 percent royalty of each rooftop’s gross revenues under a 20-year license agreement, according to court documents.

Although the agreement permitted the Cubs to expand the Wrigley Field bleachers, under no circumstances were the Cubs permitted to erect any barriers to obstruct the views from the rooftop businesses during the 20-year term of the deal, the complaint said.

But after Ricketts acquired the team and Wrigley Field in 2009, the team began trying to acquire the rooftop businesses as well as the real estate on which they are located.

“The Cubs organization’s goal was to destroy all competition in selling tickets to watch live Cubs games and other Wrigley Field events, and thereby control and increase ticket prices both inside Wrigley Field and at the acquired rooftop businesses,” the plaintiffs said.

The plaintiffs claimed that several meetings beginning in 2012 between team brass and the rooftop owners — on the heels of media reports that the team was negotiating with the city for approval of new signage at the ballpark — Ricketts and team officials asked the rooftop businesses to agree with the team on setting coordinated, minimum ticket prices.

During one meeting, the Cubs owner also allegedly threatened to block the rooftop views into Wrigley Field “unless they agreed to the price-fixing scheme,” but the plaintiffs rejected the proposal, the complaint said.

The plaintiffs noted that out of 3,000 available rooftop tickets, the Cubs currently control about 800 of them on top of the over 40,000 seats available inside the ballpark.

Since the end of the 2014 baseball season, the rooftop owners claim that construction work has begun to erect the signage approved over the summer. The new signage is being constructed in such a way that blocks their rooftop sightlines but leaves rooftops purchased by the Cubs unobstructed, the complaint said.

"If unchecked, the Cubs organization’s anticompetitive conduct will adversely affect consumers by reducing competition in the live Cubs games product market, reduce choice among consumers ... and lead to increased prices," the plaintiffs said.

The plaintiffs are seeking a permanent injunction prohibiting the Cubs from installing any signs or other objects at Wrigley Field that obstruct the rooftop views or from making any further false or misleading statements about the rooftop businesses as well as monetary damages.

The plaintiffs also brought a breach of contract claim, saying that the Cubs proposed signage violates the 2004 settlement agreement that bars anything that obstructs the rooftop views.

The lawsuit is the second filed this month by rooftop owners, who had been threatening litigation since at least May, when the Cubs announced plans to move forward immediately with the renovations.

On Jan. 8, they sued the city and the landmark commission in Cook County Circuit Court challenging the commission’s approval of changes to the renovation that allegedly rearranged the proposed new signage at the ballpark to punish holdout businesses that refused lowball offers from the team to buy their properties.

The complaint was built on allegations in a prior suit filed by the same rooftop clubs alleging the renovation plans violated Wrigley Field’s designation as a city landmark.

In addition to Right Field Rooftops, which operates as Skybox on Sheffield, plaintiffs in the instant suit include Right Field Properties LLC, Rooftop Management LLC and Rooftop Acquisition LLC.

Each plaintiff leases property on North Sheffield Avenue, which runs along the east side of the stadium, and offers customers food, drinks and views of Wrigley Field events from just beyond right field.

“The Cubs will vigorously contest this lawsuit and move forward confidently with the Wrigley Field expansion construction project, which is well underway,” said Andrew Kassof of Kirkland & Ellis LLP, an attorney for the Cubs.  “Wrigley Field's expansion and renovation is in the best interest of the team, its fans, Major League Baseball and the city of Chicago."

Plaintiffs counsel Thomas M. Lombardo told Law360 on Wednesday that the Cubs put the rooftop owners “in a difficult bind” by forcing them to either conspire to fix ticket prices or risk having their businesses destroyed.

“The rooftop owners refused to acquiesce and the Cubs made good on their threat,” Lombardo said. “We are confident the legal system will view this as a violation of the Sherman Act and also enforce our rights under [the 20-year agreement].”

The plaintiffs are represented by Thomas M. Lombardo and Abraham E. Brustein of Di Monte & Lizak LLC.

The Chicago Cubs are represented by Andrew Kassof of Kirkland & Ellis LLP.

The case is Right Field Rooftops LLC et al. v. Chicago Baseball Holdings LLC, case number 1:15-cv-551, in the U.S. District Court for the Northern District of Illinois.