By Amelia Taylor
In National Experiential LLC v. City of Chicago, the U.S. District Court for the Northern District of Illinois dismissed several claims filed by National Experiential, LLC against the City of Chicago, the Chicago Sports Commission (CSC), and other related parties. National Experiential sought to challenge the City’s decision to cancel a laser-light display project planned for the 2020 NBA All-Star Weekend. While many of National Experiential’s claims were dismissed, the court allowed portions of its First Amendment claims to proceed, particularly those contesting the City’s permit requirements and discretion in granting permits. Additionally, the court dismissed all claims against MB Real Estate Services, the Chicago Sports Commission, and its Executive Director, Kara Bachman. The court’s Memorandum Opinion and Order, signed by Honorable Steven C. Seeger on August 9, 2024, presents a complex picture of the interplay between local regulations and constitutional rights.
The City Fights Back: Zoning Rules Defeat a Creative Display
A key issue at the center of the case was whether the City of Chicago acted within its rights when it revoked National Experiential’s license to project the display. The court found that the light projection required a permit under Chicago’s zoning ordinance, which mandates that “temporary signs that are illuminated” must receive prior approval. This added a layer of regulatory scrutiny for projects like the planned laser-light display by National Experiential. In its defense, the City argued that the zoning rules, including special permit requirements for illuminated signs, were in place to maintain control over public spaces and ensure compliance with local regulations.
The court dismissed some of National Experiential’s First Amendment claims but allowed others to proceed, specifically those challenging the City’s discretion in applying the permit requirements. It found that further factual development was necessary to determine whether the City’s actions were lawful. The court also noted that it had not definitively ruled on whether all provisions of the City’s zoning ordinance were content-neutral, leaving this question open for further exploration.
A Big Plan, an Even Bigger Hurdle: The NBA All-Star Projection
In February 2020, National Experiential, LLC, a marketing and advertising company, entered into a contract with Nike to project a laser-light display on two iconic skyscrapers in downtown Chicago—the Aon Center and the Prudential Building—during the NBA All-Star Weekend. The display was to feature an image of Michael Jordan’s famous dunk from the 1988 slam-dunk contest and Nike’s “Jumpman” logo. National Experiential paid $325,000 to use the buildings as projection screens.
In addition to its contracts with Nike and the building owners, National Experiential secured a license agreement with the City of Chicago to use Millennium Park for projection equipment. The agreement, however, included a clause allowing the City to terminate the project “at any time, for any reason,” and required the company to secure any necessary permits for the event. Despite assurances from MB Real Estate Services that no additional permits were needed, National Experiential’s plans soon faced unexpected hurdles.
Last-Minute Shutdown: How the City Pulled the Plug
Just two days before the event, MB Real Estate Services notified National Experiential that the project was not approved due to the absence of required zoning permits. Despite prior communications indicating no permits were necessary, the City’s zoning rules prohibited illuminated, temporary signs without prior approval. MB Real Estate’s email threw the company’s plans into disarray, and its subsequent efforts to secure last-minute approval from the City were unsuccessful. The City ultimately revoked National Experiential’s license, and Nike followed by canceling the display.
First Amendment vs. Fair Enforcement: A Legal Showdown
The court’s legal analysis focused on several key issues, including First Amendment claims, breach of contract, and tortious interference. National Experiential argued that Chicago’s zoning ordinances violated its First Amendment rights by requiring a permit for the temporary illuminated signs, which the company contended had both commercial and artistic elements. While the court dismissed some of the First Amendment claims, it allowed others to proceed, particularly those challenging the City’s discretion in enforcing permit requirements.
The court highlighted the need for more factual development before ruling on whether the City’s application of the permit process was lawful. Moreover, the court did not definitively rule on whether the City’s zoning ordinance was content-neutral, allowing for further scrutiny on this issue.
Art or Advertisement? The Failed Bid for Artistic Exemption
One of the more intriguing aspects of the case was National Experiential’s argument that its projections should be considered “works of art” exempt from regulation under Chicago’s zoning code. The ordinance exempts works of art that do not contain commercial messages, but the court rejected this argument, stating that the inclusion of Nike’s “Jumpman” logo clearly constituted a commercial message. While the company argued that the display had artistic elements, the court reasoned that the blend of commercial and artistic content disqualified it from being exempt as art under the ordinance.
Importantly, the court did not make a final ruling on whether the display should be classified as commercial speech or artistic expression, instead leaving the matter open for further factual exploration. This distinction could prove critical in future proceedings.
No Favoritism Here: The Court Dismisses Discrimination Claims
National Experiential also claimed that the City had applied its zoning rules in a discriminatory manner by imposing permit requirements on its display while allowing other illuminated signs to proceed without similar scrutiny. However, the court found no evidence of favoritism, concluding that the regulations were applied uniformly, regardless of the type of content being displayed. The court rejected National Experiential’s assertion that its projections, which contained both artistic and commercial elements, should have been subject to different rules than other commercial displays.
Contract Loopholes Sealed: The Legal Basis for the City’s Cancellation
In its breach of contract claim, National Experiential contended that the City acted unlawfully when it terminated their agreement. The court disagreed, ruling that the City had acted within its rights under the terms of the license agreement, which allowed the City to cancel the contract “at any time, for any reason.” National Experiential had accepted these terms and paid the associated fees, and the court found no basis for challenging the cancellation provision. Additionally, the court noted that the dismissal was based on multiple factors beyond just the cancellation clause, which further undermined National Experiential’s breach of contract claim.
Behind the Scenes: Allegations Against the Chicago Sports Commission
National Experiential also filed tortious interference claims against the Chicago Sports Commission and its Executive Director, Kara Bachman, alleging that they had influenced the City’s decision to cancel the project. The company claimed that the CSC had lobbied for the Prudential Building to be lit in Bulls’ red during NBA All-Star Weekend, in direct competition with the Nike projection. The court dismissed these claims, finding no evidence of unlawful conduct by the CSC or Bachman. The court emphasized that, as a private entity, the CSC had no authority to act on behalf of the City and could not be held liable for tortious interference without evidence of wrongdoing.
Key Takeaways: Navigating Public Displays and Legal Boundaries
This case serves as a cautionary tale for event organizers and advertisers navigating the complex landscape of local ordinances and permitting requirements. National Experiential’s failure to secure the necessary permits was a decisive factor in the case’s outcome, and the court’s decision underscores the importance of compliance with local regulations before launching large-scale projects in public spaces. While some of National Experiential’s claims remain for further factual development, the company’s experience highlights the need for thorough preparation and careful attention to municipal requirements in order to avoid similar legal obstacles in the future.
