By Matt Hawzen
On February 19, 2015, United States District Court Judge Virginia M. Kendall denied the “Rooftops” motion for a Temporary Restraining Order (“TRO”) that would have prohibited the Cubs from installing any obstructive signage before the Court held a preliminary injunction hearing at a later date. This ruling was the result of a January 2015 complaint filed by four affiliated entities that own and operate the “Rooftops”: Right Field Rooftops, LLC, Right Field Properties, LLC, 3633 Rooftop Management, LLC, and Rooftop Acquisition, LLC filed complaint against the Chicago Cubs Baseball Club, LLC, Wrigley Field Holdings, LLC, Chicago Baseball Holdings, LLC, and owner Thomas S. Ricketts for breaching their contract and violating the Sherman Anti-Trust Act. (Right Field Rooftops, LLC, et al., Plaintiffs, v. Chicago Baseball Holdings, LLC, et al., Defendants; 2015 U.S. Dist. LEXIS 19921).
Since 1916, the Chicago Cubs baseball franchise has played their home games at Wrigley Field stadium on the Northwest corner of Clark Street and Addison Street in Chicago, Illinois. Since the stadium’s construction in 1914, there have existed a number of apartment buildings across the street on both Sheffield Avenue and Waveland Avenue. The rooftops of these buildings provide spectators a view of the events taking place in Wrigley Field. Indeed, since the stadium has been in use spectators have utilized these rooftops to watch baseball games and other events inside Wrigley Field. In the mid-1980s, the owners of the buildings across the street from Wrigley Field “gradually transformed their original flat-topped roofs into bleacher-style grandstands, and began to form rooftop business entities to serve a growing market for viewing Cubs games and other Wrigley Field events from the rooftops”, which later became the Rooftop businesses, according to the January 2015 complaint.
Business relations between the Cubs and the Rooftops went awry after the 2002 baseball season (2015 U.S. Dist. LEXIS 19921). The Cubs alleged that the Rooftops were “misappropriating the Cubs’ property by charging admission fees to watch Cubs games from the Rooftops”. To resolve this complaint, the Cubs and the Rooftops entered into a contract which grants the Rooftops a license to sell tickets to view Wrigley Field events from the Rooftops in exchange for seventeen percent of the Rooftops’ gross revenues. The Agreement importantly prevents the Cubs from stadium “expansions” that would obstruct the views from the Rooftops. However, there is an important clause: “Any expansion of Wrigley Field approved by governmental authorities shall not be a violation of this Agreement” (p. 2; emphasis added). Interestingly, the Rooftop entities allege that since 2009, Cubs ownership has either attempted to acquire the Rooftops or backtrack from the agreement even though it does not expire until December 31, 2023.
In 2011 the Cubs began lobbying the City to approve stadium expansions, which included the approval for signage that would obstruct the view of the Rooftops. With approval from the City Landmarks Commission, in 2014 the Cubs announced plans to install a 2,200 square foot “jumbotron” and two advertising billboards in right field that would “substantially” obstruct the Rooftops’ view. The Rooftops argue that obstructed views could drive the Rooftops out of business, and the mere threat of obstructed views give the Cubs leverage to threaten the Rooftops into a “price-fixing scheme” as the Rooftops currently (with unobstructed views) reduce demand for tickets within Wrigley Field. Seeking a TRO, the Rooftops believed the plans revealed by the Cubs to be in violation of the Sherman Anti-Trust Act. A TRO would have prohibited the Cubs from installing any obstructive signage before a preliminary injunction hearing. The denial of the TRO by Judge Kendall resulted from the Rooftops’ failure to meet three requirements.
First, the Rooftops did not display “a likelihood of success on the merits” that the Cubs breached the agreement and/or were in violation of the Sherman Anti-Trust Act. For the breach of contract, the Rooftops did not dispute whether or not the Cubs received City approval for the stadium expansions. Rather, the Rooftops alleged that “the term ‘expansion’ applies only to construction that increases the amount of available space or seating within Wrigley Field and that signage accomplishes neither” (p. 3). The Cubs retorted that “expansion” was purposively drafted this way to encompass broad meanings. The “plausible interpretations” of the agreement by both parties meant that the court required more time to analyze evidence and contextual business and financial factors before granting the TRO at this moment.
The Rooftops also failed to show the Cubs to be in violation of the Sherman Anti-Trust Act. Specifically, the Rooftops’ argument was that the Cubs were engaging in “strong-arm” negotiations, efforts to control ticket pricing, and threatening to block the views of the Rooftops with “video boards, jumbotrons, and other advertising signs”. These arguments were not substantial enough claims to establish that the Cubs had “(1) a specific intent to achieve monopoly power; (2) predatory or anticompetitive conduct toward accomplishing the unlawful end; and (3) a dangerous probability that the attempt to monopolize will be successful” (p. 4). However injurious these acts may be, the Court determined that these acts were competitive and within the Cubs’ valid business objective. This was not unlawful, anti-competitive or predatory conduct.
Second, the Rooftops did not demonstrate “that irreparable injury is likely in the absence of a TRO” (p. 5). To justify the issuance of a TRO, the threat of injury must be “’real, ‘substantial’, and ‘immediate’, not speculative or conjectural” (p. 5). While the Rooftops justifiably claim that the Cubs’ stadium expansions threaten the livelihood of the business, the Rooftops fail to provide data supporting this claim. Instead, the Rooftops provided the Court with customer emails that described how “certain customers will not purchase tickets if there is not view” (p. 5). This ineffectual evidence does not evince irreparable harm or the collapse of business. Rather, it merely shows a loss of revenue in difficult business times.
Third, the Rooftops did not demonstrate that they have no adequate remedy at law. There is no evidence provided that the Rooftops will be foreclosed between this ruling and the preliminary injunction hearing. Also, any harm the Rooftops may incur without the TRO is “financial in nature, ascertainable, and calculable” through the approximately ten years of income data. Without this data, the Court ruled such allegations “too speculative to warrant the imposition of injunctive relief” (p.6).
Furthermore, the Court determined that the TRO would not provide relief for the Rooftops against losses of a large enough portion of its annual revenue. The Rooftops had already sold “a substantial proportion of the tickets that they intend to sell for the 2015 season” (p. 6). In addition, the Court must balance the effects of the TRO. The consequences of the TRO for the Cubs would result in monetary loss through ticket refunds, other income foregone, and reputational harm. The Cubs had already purchased materials for the video board, entered into a sponsorship agreement for the video board, did not have enough time to redesign the project before Opening Day, and, overall, represented that “any impediment to the construction at Wrigley Field could cause a significant hardship in that the stadium would remain under construction on Opening Day” (p. 6).
Judge Kendall plans to hold the preliminary injunction hearing before Opening Day once the court receives the full presentation of facts and law.
Matt Hawzen is a Ph.D Student at Florida State University
