The Seventh Circuit said Friday it would not revive a lawsuit by Wrigley Field-area rooftop owners accusing the Chicago Cubs of breaching a contract preventing the obstruction of stadium sightlines, finding that the deal's language and Major League Baseball's antitrust exemption bar the claims.
A three-judge panel affirmed U.S. District Judge Virginia Kendall’s dismissal of the case, agreeing that the Cubs and team owner Thomas S. Ricketts are protected from the rooftop owners’ monopoly claims under MLB's longstanding antitrust exemption.
The lawsuit stems from the Cubs’ decision to make certain upgrades to Wrigley Field, including a new video board that allegedly blocked views into the stadium offered by the owners, four companies that are referred to as “the Rooftops.”
The panel rejected the Rooftops’ contention that the claims fell outside the antitrust exemption since they did not concern the “rules and restrictions related to baseball itself.” The judges said the team’s actions related to the rooftop seats — including an attempt set minimum prices for the seats and threats to block their views if the owners did not sell the rooftop spaces to the Cubs — are within the scope of the business of baseball.
The court also disagreed with the Rooftops’ claim that the exemption doesn’t apply because Wrigley holds events other than baseball games, such as hockey and football games, and concerts.
“As the Cubs correctly point out, this contention is at odds with their complaint, which alleges attempted monopolization of ‘the market for watching live Cubs games,’” the panel wrote.
Additionally, the Seventh Circuit upheld Judge Kendall’s finding that the Cubs were within their rights to erect the video board under a 2004 licensing agreement with the owners.
The deal allegedly gave 17 percent of the Rooftops’ revenues from the seats to the Cubs in exchange for a promise not to obstruct the views. It prohibited the construction of “windscreens or other barriers” but said “any expansion” of the field would be permitted if it received approval from governmental authorities.
The Rooftops argued that the contract’s obstruction prohibitions and carveout concerned only the expansion of bleacher seats, referencing a portion of the agreement which discussed “bleacher expansion.” This would mean the video board, despite receiving government approval, was a violation of the contract.
But the Seventh Circuit disagreed, saying that the term “any expansion” was explicitly included in the agreement, and that the video board fell into this category of acceptable expansions.
The panel also found that the 17 percent royalty provision does not create an inappropriate allocation of risk as alleged by the Rooftops, in part because the Cubs lost the revenue it received from the deal by obstructing the views.
The Rooftops had asserted that Ricketts breached a nondisparagement provision contained in the agreement, but the circuit court shot this down as well. The owners said Ricketts made inappropriate comments about them at a Cubs convention in 2014, but the judges said the statement was merely an analogy discussing the dispute between the sides which was not untrue or misleading, and rarely ever actionable under Illinois law.
The ruling is the latest victory for the Cubs in the lawsuit, which began in January 2015. The initial lawsuit by the Rooftops — who owned two of 11 buildings along the outfields at Wrigley Field — sought to stop the progress of the field’s expansion, which has since been completed.
Judge Kendall granted the team’s motion to dismiss in September 2014, citing the MLB antitrust exemption, and a year later affirmed her ruling and denied the plaintiffs’ request to file an amended complaint, saying the changes to the complaint would not alter that immunity.
In its ruling on Friday, the panel affirmed the decision to deny the amended complaint as well. The main change proposed by the Rooftops was the addition of a company called Northside Entertainment Holdings LLC to the suit, but the circuit court said the company would be barred by antitrust immunity since it is owned by Ricketts.
Counsel for the Cubs declined to comment Friday.
Counsel for the Rooftop companies — Right Field Rooftops LLC, Right Field Properties LLC, 3633 Rooftop Management and Rooftop Acquisition LLC — did not respond Friday to requests for comment.
Circuit Judges William J. Bauer, Frank H. Easterbrook and Kenneth F. Ripple sat on the panel for the Seventh Circuit.
The Rooftops 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.
REPRINTED WITH PERMISSION FROM THE SEPTEMBER 1, 2017 EDITION OF LAW360 © 2017 PORTFOLIO MEDIA INC. ALL RIGHTS RESERVED. FURTHER DUPLICATION WITHOUT PERMISSION IS PROHIBITED. WWW.LAW360.COM