The Seventh Circuit on Tuesday threw out a bid by Wrigley Field-area rooftop owners for a rehearing of their case accusing the Chicago Cubs of breaching a contract to prevent the obstruction of stadium sightlines, with all of the judges on the original appellate panel denying the petition for rehearing.
The three-judge panel denied the Right Field Rooftops LLC plaintiffs’ Sept. 18 petition for rehearing and rehearing en banc, giving no explanation in their single-page order as to why they decided not to reconsider their Sept. 1 final judgment finding that the language of the deal between the Cubs and the rooftop owners, as well as Major League Baseball's antitrust exemption, bar the claims.
“All of the judges on the original panel have voted to deny the petition for rehearing, and no judge in active service has requested a vote on the petition for rehearing en banc,” the original panel said.
The lawsuit that began in January 2015 stems from the Cubs’ decision to make upgrades to Wrigley Field, including a new video board that allegedly blocks views into the stadium offered by the owners, four companies that are referred to as “the Rooftops.”
The Seventh Circuit panel’s Sept. 1 refusal to revive the lawsuit 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 long-standing antitrust exemption.
The appellate panel originally 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 to 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 appellate court panel 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 [the Rooftops’] 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 rooftop 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 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, they said.
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 the team received from the deal by obstructing the views.
Judge Kendall granted the team’s motion to dismiss in September 2015, 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.
Circuit Judges William J. Bauer, Frank H. Easterbrook and Kenneth F. Ripple sat on the panel for the Seventh Circuit. Circuit Judges Joel M. Flaum and Michael S. Kanne did not participate in the consideration of the petition for rehearing.
Counsel for the Cubs and the Rooftop companies — Right Field Rooftops LLC, Right Field Properties LLC, 3633 Rooftop Management and Rooftop Acquisition LLC — did not respond Wednesday to requests for comment.
The Rooftops are represented by James R. Figliulo and Stephanie D. Jones of Figliulo & Silverman PC.
The Chicago Cubs are represented by Paul D. Clement, Andrew A. Kassof, Daniel E. Laytin, Diana M. Watral, Rachel Haig, Erin Murphy and Daniel Siegfried of Kirkland & Ellis LLP.
The case is Right Field Rooftops LLC et al. v. Chicago Cubs Baseball Club LLC et al., case number 16-3582, in the U.S. Court of Appeals for the Seventh Circuit.
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