The Chicago Cubs and a group of Wrigley Field-area rooftop owners went before the Seventh Circuit on Tuesday to argue whether the baseball team broke a contract when it broke the owners' stadium sight lines in an alleged bid to monopolize game views.
In oral arguments the Cubs claimed they were fully within their rights under a 2004 contract with the rooftop owners to erect a new scoreboard, while the owners argued the Cubs were blocking their contractually guaranteed stadium view in a deliberate attempt to drive them out of business.
“When they announced their decision to move this sign in front of different rooftops, they announced we are sending the deathblow to you,” the owners' counsel James Figliulo of Figliulo & Silverman PC said. “They distinctively and definitively were trying to destroy this rooftop business.”
Two rooftop owners had sued in January 2015, accusing the team of trying to push them out of the market for live Cubs games by putting up obstructive signs and making misleading comments as part of a smear campaign to drive consumers away from the owners' businesses. The owners wanted to stop the team from executing a $300 million overhaul that includes large signs and a video scoreboard above the outfield bleachers that allegedly block views into the stadium.
The plaintiffs own the rooftops of two of 11 buildings along the outfields at Wrigley Field that have long been used as alternate viewing areas for Cubs games. In 2002 the team put up windscreens that blocked views into the stadium. After a legal battle, the team agreed in 2004 not to obstruct sight lines for 20 years in exchange for 17 percent of each rooftop’s gross revenue.
This peace lasted until 2009, when the Tribune Company sold most of the team and its home park to businessman Thomas S. Ricketts. The owners allege that Ricketts made a series of attempts to buy the rooftops and that after these attempts largely failed, Ricketts decided to block the rooftop views in violation of the 2004 agreement.
An Illinois federal court granted the team’s motion to dismiss in September 2014, ruling that U.S. Supreme Court precedent makes Major League Baseball immune from antitrust claims and that there is no relevant market to monopolize. A year later, U.S. District Judge Virginia M. Kendall stood by her ruling and denied the owners’ request to file an amended complaint, saying the changes to the complaint would not break that immunity. The owners are asking the Seventh Circuit to allow their amended complaint.
The rooftop owners argued Tuesday that the district court’s finding that the signs were permitted under a contractual clause allowing the team to make “any expansion” to the stadium permitted by city authorities rendered the contract meaningless, as city approval would be required for any expansions anyway.
Figliulo said the owners would not have agreed to a contract where the first section guaranteed their view and a subsequent section allowed the Cubs to block it.
“Our position is the Cubs’ interpretation simply leads to an unreasonable result, one that eliminates the meaning of section one and makes the other provisions of the contract rather irrational,” he said.
In rebuttal the Cubs' counsel Paul Clement of Kirkland & Ellis LLP said that the section regarding government-approved expansions was intended to create an exception to the first section, and that the intention was that the owners could go before city authorities to block expansions that would obstruct their view, where they might reasonably expect to prevail.
“I think this is a perfectly rational way to allocate risk,” Clement said.
The owners had also claimed Sherman Act violations and argued the baseball antitrust exemption did not apply to the case because rooftops are not in the “business of organized professional baseball,” but Circuit Judge Frank H. Easterbrook cut off Figliulo when he began to make this argument, saying his arguments were unlikely to prevail over Supreme Court precedent on the issue.
“This case arises because a baseball team erected a scoreboard inside its own stadium,” Judge Easterbrook said. “If that’s not the business of baseball, I don’t know what is.”
Circuit Judges William J. Bauer, Frank H. Easterbrook and Kenneth F. Ripple sat on the panel for the Seventh Circuit.
The rooftop owners are represented by James R. Figliulo and Stephanie D. Jones of Figliulo & Silverman PC.
The Chicago Cubs are represented by Andrew Kassof, Daniel E. Laytin, Paul D. Clement, Diana M. Watral and Rachel Haig of Kirkland & Ellis LLP.
The case is Right Field Rooftops LLC et al. v. Chicago Baseball Holdings LLC et al., case number 16-3582, in the U.S. Court of Appeals for the Seventh Circuit.
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