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Right Field Rooftops, LLC v. Chicago Cubs Baseball Club, LLC
2017 U.S. App. LEXIS 16847
| 7th Cir. | 2017
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Case Information

*1 Before B AUER , E ASTERBROOK , R IPPLE , Circuit Judges . B AUER Circuit Judge.

Plaintiffs appellants Right Field Rooftops, LLC, doing business as Skybox Sheffield; Right Properties, LLC; Rooftop Management, doing Lakeview Baseball Club; Rooftop Acquisition, LLC (the “Rooftops”), filed suit against defendants appellees Chicago Baseball Holdings, LLC; Chicago Cubs Baseball Club, LLC; Wrigley Field Holdings, LLC; and Thomas S. Ricketts (the “Cubs”), alleging the Cubs violated antitrust laws and breached agreement the provide the Cubs 17% their profits exchange for Cubs’ promise obstruct view Wrigley Field (the “License Agree ment”). control two buildings and businesses sell

tickets view Cubs games events Wrigley Field. Both businesses situated on block North Sheffield Avenue Chicago, Illinois. Spectators long enjoyed a view into Wrigley Field from roofs the buildings on Sheffield Waveland Avenues. In mid 1980’s, rooftop owners gradually converted flat topped roofs into bleacher style grandstands formed businesses serve growing market for viewing Cubs games other Wrigley events. In 1998, City Chicago enacted an ordinance formally allowing rooftop businesses operate profit. By 2002, there were eleven such businesses. 2000, City began process naming Wrigley Field landmark. While landmarking process unfolded, announced proposal expand Field bleachers 2001. Prior Major League Baseball season, installed large green windscreen above outfield bleachers, obstructing rooftop businesses Sheffield Avenue.

On December filed suit against number rooftop businesses, including Rooftops, claiming that were misappropriating property charging *3 No. 3 admission fees watch Cubs games. Prior the baseball season, parties settled the suit entering into License Agreement, rooftop businesses agreed pay Cubs 17% gross revenues exchange for into Wrigley Field. License Agreement expires on December 2023. Section License Agreement contemplated expansion Wrigley Field established protocols facilitate such expansion. pertinent provisions follows:

6. Wrigley Field bleacher expansion. 6.1 If expand Wrigley Field bleacher seating such expansion so impairs view from any Rooftop into Wrigley Field such Rooftop’s no longer viable unless it increases height its available seat ing, then such Rooftop may its discre tion lect undertake construction raise height its seating allow views into Wrigley Field shall reimburse Rooftop for 17% actual cost such construction.
6.2 If expand Wrigley Field bleacher seating such expansion so impairs View Rooftop into such Rooftop’s is no longer viable even if were increase its available seating to the maximum height permitted by law, if such bleacher expansion completed within eight years from Effective Date, then if such Rooftop elects cease operations … Cubs shall reimburse Rooftop for 50% royalties paid Rooftop … …
6.4 If expand Wrigley Field bleacher seating such expansion impairs view any Rooftop into Wrigley Field such Rooftop ʹ s Gross Revenue year expansion is more than 10% below average Gross Revenue for Rooftop two years prior expansion … then affected Rooftop can seek reduction Roy alty rate for all subsequent years the Term … .
6.5 Nothing Agreement limits right seek approval right expand Wrigley Rooftops’ right oppose request expansion Field. 6.6 The shall erect windscreens or barriers obstruct Rooftops, provided however tempo

rary items such as banners, flags, and

decorations special occasions, shall not be considered as having been erected obstruct Rooftops. Any ex pansion Wrigley Field approved by governmental authorities shall a violation this Agreement, including section. On February 11, 2004, City completed landmarking process; Wrigley Field’s landmark designation limited future alterations field. However, following baseball season, Cubs were permitted add approximately 1,790 bleacher seats.

In Fall Ricketts family certain related entities purchased 95% Cubs acquired from Tribune Company. acquisition was subject the preexisting License Agreement. Shortly thereafter, Cubs began acquire ownership interests number rooftop businesses, but failed attempt purchase all them. In announced plans install a ‐ “Toyota” sign left field. Ricketts stated the sign “[would not] affect rooftops and everyone will be able see.” early 2012, the sought approval the City for several renovations, including bleacher seating expansion, outfield sign package, and two video boards. On April 15, 2013, the announced a new renovation plan, which included a 6,000 ‐ square ‐ foot video board left field and a 1,000 square ‐ foot billboard right field. Cubs released a mock up its proposed renovation May 28, all rooftop owners, revealed that rooftop businesses would largely blocked the construction.

After numerous meetings and public hearings stretching out over two years, where a number rooftop businesses appeared and objected proposed construction, the Chicago Plan Commission, City Council, Commission on Chicago Landmarks approved Cubs’ plan, including construction bleachers, video boards, billboards. The City approved Cubs’ final plan construct total eight outfield signs above bleachers, including video board in both left right field.

During approval process, Rooftops contend that Cubs’ representatives used threat blocking rooftop views leverage force sale rooftops Ricketts at below market prices. allege Cubs demanded set minimum ticket prices failure do so would lead having blocked. Once City approved initial construction plan July allege engaged number rooftop business owners strong arm negotiations pur chase properties. May Ed McCarthy, one the owners Rooftops, proposed potential sale Cubs both Rooftops. McCarthy offered sell the Cubs for fair market value, but was met by Cubs representa tive stating McCarthy should accept whatever sale terms offer because buildings would worth nothing once they no longer had into Field. The Cubs offered McCarthy significantly lower price, and McCarthy refused. also told McCarthy they would block rooftop did purchase.

At annual Convention held January in response question regarding construction Wrigley Field, Ricketts stated:

It ʹ s funny—I always tell this story when someone brings up rooftops. So you ʹ re sitting your living room watching, say, Showtime. All right, you ʹ re watching “Homeland.” You pay that channel, and then you notice your neighbor looking through your window watching your television.
And then you turn around, they’re charging neighbors sit yard watch your television. So you get up close shades, city makes you open them. That’s basically what happened. contend audience, populated

media ticket purchasing fans, interpreted statement as accusation the Rooftops were stealing the Cubs’ property.

The Cubs began construction on their expansion project in September 2014. The Cubs removed the outfield outer walls, purchased approximately fifteen feet sidewalk and street on Waveland and Sheffield Avenues, increased bleachers’ seating capacity by several hundred, and increased bleach ers’ height by approximately feet. total, construction entails new seats outfield bleachers, a new “fan deck” in bleachers, increased concessions, signs and video boards, and new light systems. filed suit against Cubs on January 20,

2015, seeking relief for: (1) attempted monopolization; (2) false and misleading commercial representations, defamation, false light, breach non disparagement provision; and (3) breach contract. Three weeks later, sought a temporary restraining order a preliminary injunction enjoining from constructing video board. The district court conducted hearing, on February 19, 2015, it denied motion for TRO. On April 2015, court denied motion preliminary injunction. The moved dismiss complaint under Federal Rule Civil Procedure 12(b)(6). granted motion prejudice September 2015.

Specifically, dismissed monopolization claims because: (1) Major League Baseball’s antitrust exemption applies Cubs; (2) failed establish a plausible relevant market; (3) cannot limited antitrust law distributing own product. It ‐ dismissed breach contract claim because plain language contract did not limit expansions to seating capacity Wrigley Field. The court dismissed six remain ‐ ing counts related to Ricketts’ statements because Rooftops failed to plausibly allege “actionable false statement fact.”

The Rooftops moved to alter amend judgment under Rule 59(e) and to file amended complaint under Rule 15(a). The claimed have discovered “new evidence” in form public deeds January and May indicat ing corporate entity than Chicago had purchased competing rooftops. sought amend antitrust claims: (1) allege “the in involved not ‘business base ball;’” (2) modify relevant market include occasional non baseball events Wrigley Field; (3) allege no right “sell into Field.” denied both motions. It held Rooftops were entitled relief under Rule 59(e) because new evidence was actually matter public record readily available, therefore could be considered “newly discovered.” It also held amending complaint would be futile because, even proposed amendments, antitrust claims would still subject baseball exemption lacked plausible relevant market. This appeal followed. 16

I. DISCUSSION

We review de novo district court’s decision granting a motion dismiss under Rule 12(b)(6), accepting all well ‐ pleaded factual allegations in complaint true and drawing all reasonable inferences favor of appellants. St. John v. Cach, LLC , 822 F.3d 388, 389 (7th Cir. 2016). To avoid dismissal, complaint must “state claim relief is plausible its face.” Jackson v. Blitt & Gaines, P.C ., F.3d (7th Cir. 2016) (quoting Ashcroft v. Iqbal U.S. 662, (2009)).

On appeal, challenge district court’s dismissal their attempted monopolization, breach ‐ contract, breach non disparagement provision claims. The also contend district erred in denying motion amend. We will address each argu ment turn.

A. Attempted Monopolization contend certain conduct Cubs constitutes monopolistic behavior violation Sherman Act, U.S.C. § et seq ., including: attempting set mini mum price tickets; attempting purchase all rooftop businesses; acquiring several rooftop businesses, threatening obstruct rooftop businesses if refuse sell Cubs; constructing video board blocks views. Supreme Court first exempted baseball federal antitrust laws almost century ago Federal Baseball Club Baltimore National League Professional 16 Baseball Clubs , 259 U.S. 200 (1922). In Federal Baseball , Court held that Sherman Act had no application to “business [of] giving exhibitions of base ball” because such “exhibitions” are “purely state affairs.” Id . 208. Toolson v. New York Yankees, Inc ., 346 U.S. 357 (1953) (per curiam), Court reaffirmed Federal Baseball ’s holding, reasoning that business of baseball had “been left thirty years to develop, understanding it was not subject to existing antitrust legislation.” Therefore, “if there are evils in this field now warrant application it antitrust laws it should legislation.” Id . Finally, Flood v. Kuhn , 407 U.S. 283–84 (1972), Court noted Congress had acqui esced baseball exemption thus “by its positive inaction … clearly evinced desire disapprove [it] legislatively.” See Charles O. Finley & Co. Kuhn F.2d 527, (7th Cir. 1978) (discussing Federal Baseball its progeny before concluding “the Supreme Court intended exempt business baseball, particular facet that business, federal antitrust laws.”).

Eventually, Congress took action narrow scope baseball exemption passage Curt Flood Act, U.S.C. § 26b. Act established “the conduct, acts, practices, or agreements persons organized professional major league baseball directly relating affecting employment major league baseball players … subject antitrust laws … .” U.S.C. § 26b(a). do not—and cannot—plausibly contend carve out applies conduct, is unrelated employment Major League Baseball players. 3582

Instead, the argue that their claims outside scope the baseball exemption because do not concern the “rules and restrictions related to baseball itself.” As an initial matter, the suggested “rules and restrictions” litmus test is not supported case law. However, we have recognized limits to scope the exemption. Charles O’Finley , found “[the] exemption does not apply wholesale all cases which may some attenuated relation business baseball.” F.3d n.51. But we do view Cubs’ conduct attenuated business of baseball. By attempting set minimum ticket price, purchas ‐ ing rooftops, threatening block rooftops with signage that did sell Cubs, beginning construction at Wrigley Field, conduct is part parcel “business providing public baseball games profit” Federal Baseball its progeny exempted antitrust law. See Toolson , U.S. 357. also contend exemption is inapplica ‐

ble Count II, which involved acquisition rooftop businesses, because Ricketts, rather than Cubs, engaged in anticompetitive conduct. district dismissed this argument, recognizing Supreme Court applied baseball exemption Toolson , defendants included both owner general manager Cin cinnati Baseball Club. See Corbett Chandler , F.2d (6th Cir. 1953) (per curiam), aff ʹ d sub nom ., Toolson supra . We agree district court.

Finally, argue exemption is inapplica ble because “not publicly display baseball games,” but instead “to sell live events inside” 16 Wrigley Field, including concerts, Big football games, and professional hockey games. As Cubs correctly point out, this contention is odds complaint, alleges attempted monopolization of “the market for watching Live Cubs Games.” It is also belied by Rooftops’ brief, which concedes, as it must, “the most significant portion of the Rooftops’ current business is sell views of games … .” Nonetheless, business model of is deter minative. relevant inquiry whether challenged conduct falls within of providing public baseball games for profit, we already found does. Consequently, Rooftops’ antitrust claims subject the baseball exemption, were properly dismissed.

B. Breach of Contract contend violated License Agreement constructing video board blocks the views Wrigley Field Rooftops. Section 6.6 License Agreement states following: “The shall not erect windscreens barriers obstruct … . Any expansion approved by governmental authorities shall violation this Agreement, including this section.” 16 The basic rules of contract interpretation under Illinois law are well settled. construing contract, the primary objective is give effect the intention of the parties. Gallagher v. Lenart , 874 N.E.2d 58 (Ill. 2007) (citation omitted). “A court must initially look the language of contract alone, as the language, given its plain ordinary meaning, is the best indication of the parties’ intent.” Id . (citation omitted). A contract must construed as whole, viewing each provision light of the provisions. Id . (citation omitted). “If the words the contract clear unambiguous, must be given plain, ordinary popular meaning.” Cent. Ill. Light Co. Home Ins. Co. , N.E.2d 213 (Ill. 2004) (citation omitted). However, if language of the contract is susceptible more than one meaning, is ambiguous. Gallagher N.E.2d (citation omitted). If contract language is ambiguous, can consider extrinsic evidence determine parties’ intent. Id . argue entirety § contemplates bleacher expansion, including remedies various types bleacher expansion such sharing cost increasing height Rooftops’ seating (§§ 6.1, 6.3), renegotiating royalty rate (§ 6.4). Rooftops’ argument relies part on fact title § “Wrigley bleacher expan sion[.]” Thus, conclude term “any expansion” § 6.6 refers only expansion bleacher seating, rendering construction video board a violation License Agreement. We disagree.

As initial matter, note argument is contrary plain, unambiguous language provision. If parties wished clarify “any expansion” meant 16 “bleacher expansion,” they could have done so. This is particu larly evident light fact that every reference an expansion §§ 6.1 through 6.4 specifies “bleacher seating” expansion, and only §§ 6.5 and 6.6 use general term “expansion.” “[W]hen parties same contract use such different language address parallel issues … it is reasonable infer that intend this language mean different things.” Taracorp, Inc. v. NL Indus., Inc ., F.3d (7th Cir. 1996) (analyzing Illinois law). Thus, presume that use general term “any expansion” §§ 6.5 6.6 is an intentional departure prior sections’ use “bleacher seating” expansion.

In response, Rooftops, relying on BeerMart, Inc. Stroh Brewery Co. , F.2d (7th Cir. 1986), argue that “where parties agreed upon specific term, apparently inconsistent general statement must yield more specific term.” The contend prohibition “wind screens other barriers” is specific term, exception “any expansion” is general term must yield. First, we note BeerMart analyzed Indiana law, not Illinois. However, even if principle construction is applicable under Illinois law, is only applicable where specific general term “cannot stand together.” BeerMart , F.2d 411. These two sentences inconsistent contradictory. second sentence clarifies prohibition windscreens and barriers first sentence is applicable government approved expansion. Therefore BeerMart ’s construction principle inapplicable. argue our proposed construction renders first sentence § 6.6 meaningless. view, video ‐

board is barrier that obstructs the view of the Rooftops. Following their train logic, video board or any other construction that blocks into Wrigley Field, whether government ‐ approved or not, would be impermissible under the License Agreement. But this assertion is contrary plain language the provision, carved out government ‐ approved expansion list prohibited items. Section 6.6 makes clear that any government approved expansion “shall be in violation this Agreement, includ ‐ ing section .” (emphasis added). This is in direct reference to prohibition windscreens or other barriers preced ‐ ing sentence. Again, Rooftops’ interpretation asks us ignore plain language provision. The first sentence is meaningless; windscreen other barrier that is not government approved is still prohibited under License Agreement.

The also argue our reading § 6.6 dis ‐ harmonizes provisions License Agreement, specifically 17% royalty provision § 3. Rooftops contend if royalty obligation remains “full force” despite their obstructed views, will “assumed enormous risks got nothing return.” See Curia Nelson , F.3d (7th Cir. 2009). fail acknowl ‐ edge extent revenues negatively impacted video board, royalties will decrease propor tionately.

But more point, fail acknowledge primary function contract is allocate risks tween parties. Here, risk future expansions will obstruct views. Section 6.5 ‐ provides mechanism for parties dispute Cubs’ proposed expansion projects. Section 6.6 declares if prevail in dispute, projects may proceed. That is precisely what occurred here—the vigorously opposed Cubs’ expansion efforts, but ultimately lost. The parties were free allocate risk in different manner, but chose not do so. See McClure Eng’g Assocs., Inc. v. Reuben H. Donnelly Corp ., N.E.2d 400, 402–03 (Ill. 1983) (recognizing “a widespread policy of permitting competent parties contractually allocate risks as see fit.” (collecting cases)). Absent defect in negotiation process, such as disparity in bargaining power, absence of meaningful choice part one party, existence fraud, duress, or mistake, we will not second guess allocation. Dana Point Condo. Ass’n, Inc. Keystone Serv. Co., Div. Cole Coin Operated Laundry Equip., Inc ., N.E.2d (Ill. App. Ct. 1986).

We do not view royalty provision § as inappro priate allocation risk. Similarly, we do find our reading License Agreement “disharmonizes” marketing promotion provision § even obstructed views, both parties benefit financially continued promotion Rooftops.

Because video board falls within plain language carve out government approved expansions § 6.6, find violation License Agreement. Accordingly, breach contract claim fails. No. 16 ‐

C. Non ‐ Disparagement Provision addition § 6, the Rooftops argue Ricketts violated § 8.2, the License Agreement’s non disparagement provision, his remarks at the 2014 Convention. [5] Section 8.2 states “[t]he will not publicly disparage, abuse or insult any Rooftop or moral character of Rooftop or any Rooftop employee.” Under Illinois law, disparagement defined as “statements about competitor’s goods untrue or misleading and are made influence or tend influence public buy.” Lexmark Int’l, Inc. v. Transp. Ins. Co ., 761 N.E.2d 1214, 1225 (Ill. App. Ct. 2001) (citation and brackets omitted). district found failed establish Ricketts’ statement was untrue misleading. We agree.

Ricketts voiced his opinion as nature relation ‐ ship between and 2014 Cubs Convention. Illinois courts refused find type of hyperbolic, opinion statement as actionable. See Xlem De watering Solutions, Inc. v. Szablewski 0080, 2014 WL 4443445, *5 (Ill. App. Ct. Sept. 8, 2014) (“[S]tatements of opinion cannot form basis commercial disparagement claim.” (citation omitted)); Pease Int ʹ l Union Operating Eng’rs Local et al ., N.E.2d (Ill. App. Ct. 1991) (“Words that mere name calling or found to be rhetorical hyperbole or employed only a loose, figurative sense have been deemed nonactionable.” (citation omitted)). We do not find Ricketts’ statement be “untrue or misleading,” it is not factual assertion whose veracity can be proven.

Furthermore, type statement that Illinois courts found be “untrue or misleading[.]” In Pekin Insurance Company Phelan defendant attempted lure customers away her employer’s salon by falsely telling them salon was either closing moving new location. N.E.2d (Ill. App. Ct. 2003). In addition to telling customers salon was relocating, she provided them address her newly opened salon. Id . court found her statements untrue misleading. Id . 526. Pekin defendant told an objectively false statement mislead customers ultimately lure them away. contrast, Ricketts’ statement was analogy explain his perspective contentious relationship between and Rooftops—it was neither untrue nor misleading. Therefore, we find Ricketts’ statement did violate License Agree ment’s non disparagement provision.

Seeking avoid result, argue that because assert breach contract claim rather than a common law disparagement claim, should apply principles contract interpretation analyzing specific language § 8.2 determine if breach has occurred. Consequently, contend statement “abuse[s]” or “insult[s]” also breaches non disparagement provision. 16 ‐

To make this argument, rely Rain v. Rolls ‐ Royce Corp ., 626 F.3d 372, 380–81 (7th Cir. 2010), which we used dictionary definition of “disparage” to determine if a non disparagement agreement had been violated under Indiana law. While approach may have been appropriate under Indiana law, cited Illinois cases following similar approach. Moreover, Illinois cases such as Pekin Lexmark involve non disparagement provi ‐ sions of insurance policies, analyzed similarly to contracts; those courts used “untrue or misleading” standard analyze claims arguing breach policies’ non disparagement provisions. 799 N.E.2d 526; 761 N.E.2d at 1218, 1225. Consequently, we reject attempt to broaden scope non disparagement provision.

D. Motion Amend argue district court erred denying motion amend. Rule provides that, general rule, “should freely give leave [to amend] when justice so requires.” Fed. R. Civ. P. 15(a)(2). District courts, nevertheless, “have broad discretion deny leave amend where there is undue delay, bad faith, dilatory motive, repeated failure cure deficiencies, undue prejudice defendants, where amendment would futile.” Arreola Godinez F.3d (7th Cir. 2008). Generally, review district court’s denial leave amend for abuse discretion. Runnion v. Girl Scouts Greater Chi. & Nw. Ind ., F.3d (7th Cir. 2015). However, “our review for abuse discretion futility based denials includes de novo review legal basis futility.” Id .

Here, district court determined that Rooftops’ proposed amendments would futile. Rooftops’ pro ‐ posed amendments addressed antitrust claims. The sought include Northside Entertainment Holdings, LLC as defendant attempt evade Sherman Act’s baseball exemption. However, Ricketts operates this entity, it, turn, owns operates Cubs. Based on our discussion Toolson above , we find baseball exemp tion applies with equal force Northside. If exemption applied owner general manager Toolson we see no reason would not extend entity owns Cubs, offered compelling one. Furthermore, according Rooftops’ amended complaint, Northside engaged same conduct as Cubs defendants we already found exemplifies “the providing public baseball games profit.” Consequently, we agree district this amendment would be futile, baseball exemption applies Northside. Based conclusion, need review addi tional proposed amendments regarding relevant market.

II. CONCLUSION

We AFFIRM district court’s dismissal Rooftops’ suit.

[1] See Chi. Nat’l League Ball Club, Inc. Skybox Waveland, et al ., C United States District Court Northern District Illinois.

[2] first acquired “Down Line,” rooftop located at N. Sheffield. In total, six rooftop businesses changed hands: three three unrelated investors. conjunction their Rule 59(e) motion, provided documentation showing holding companies acquired six rooftop properties were owned Greystone, LLC, which turn was owned by Northside Entertainment Holdings, LLC. Northside, Ricketts serves executive vice president, owns operates Chicago Cubs.

[3] Having determined antitrust claims were properly dismissed, we will forego an analysis Rooftops’ relevant market distribution arguments.

[4] Although complaint seeks relief anticipatory breach contract, will analyze claim breach contract, as district did, because video board has been constructed.

[5] Ricketts’ remarks also formed basis claims under Lanham Act, Uniform Deceptive Trade Practice Act, Illinois Consumer Fraud Deceptive Business Practices Act, well as claims for defamation false light. do challenge dismissal these claims, thus limit our discussion breach non disparagement provision License Agreement.

Case Details

Case Name: Right Field Rooftops, LLC v. Chicago Cubs Baseball Club, LLC
Court Name: Court of Appeals for the Seventh Circuit
Date Published: Sep 1, 2017
Citation: 2017 U.S. App. LEXIS 16847
Docket Number: 16-3582
Court Abbreviation: 7th Cir.
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