Right Field Rooftops, LLC v. Chicago Baseball Holdings, LLC
87 F. Supp. 3d 874 (2015)
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Rule of Law:
A contract provision allowing for 'any expansion' of a venue approved by a governmental authority is unambiguous and permits constructions that obstruct a licensee's view. Furthermore, the business of professional baseball, including an individual team's decisions regarding the presentation of its games, is exempt from federal antitrust laws.
Facts:
- Starting in the 1980s, owners of buildings across the street from Wrigley Field, known as the Rooftops, operated businesses selling tickets to patrons to watch Chicago Cubs games from their roofs.
- In 2002, the Chicago Cubs sued several Rooftop businesses, claiming they were misappropriating the Cubs' property rights.
- On January 27, 2004, the Cubs and the Rooftops entered into a License Agreement whereby the Rooftops agreed to pay the Cubs 17% of their gross revenues in exchange for the Cubs not erecting barriers to obstruct their views.
- Section 6.6 of the License Agreement stated, 'Any expansion of Wrigley Field approved by governmental authorities shall not be a violation of this Agreement'.
- In 2009, the Ricketts family acquired the Cubs and subsequently purchased several of the rooftop businesses.
- The Cubs developed a plan to renovate Wrigley Field, which included the installation of large video boards and signs that would obstruct the views of the remaining independent Rooftops.
- The Cubs allegedly attempted to coerce the remaining Rooftops to set minimum ticket prices and to sell their properties, threatening to block their views if they refused.
- After a multi-year public review process where the Rooftops voiced their objections, the City of Chicago, including the Commission on Chicago Landmarks, approved the Cubs' renovation plans.
Procedural Posture:
- On January 20, 2015, Right Field Rooftops, LLC, and others (the 'Rooftops') filed a nine-count complaint against the Chicago Cubs Baseball Club, LLC (the 'Cubs') in the U.S. District Court for the Northern District of Illinois.
- The Rooftops' complaint alleged claims including attempted monopolization in violation of the Sherman Act and anticipatory breach of contract.
- The Rooftops moved for a temporary restraining order (TRO) and a preliminary injunction to enjoin the Cubs from installing the video board.
- The district court held a hearing and, on February 19, 2015, denied the Rooftops' motion for a TRO.
- The Rooftops proceeded with their motion for a preliminary injunction before the same district court.
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Issue:
Does a professional baseball team's construction of a government-approved video board, which will block the views of neighboring businesses, constitute an anticipatory breach of a license agreement that prohibits obstructions but allows for government-approved expansions, and does this action violate federal antitrust laws?
Opinions:
Majority - Judge Virginia M. Kendall
No. The Chicago Cubs' construction of a government-approved video board does not constitute an anticipatory breach of the License Agreement, nor does it violate federal antitrust laws. The court found that the Rooftops had no likelihood of success on the merits of their claims. On the contract claim, the court held that the phrase 'any expansion of Wrigley Field approved by governmental authorities' in Section 6.6 of the License Agreement was unambiguous. It reasoned that the term 'any expansion' was not limited to adding seating but broadly covered additions like the video board. Because the City of Chicago, a governmental authority, approved the plans, the construction was explicitly permitted by the contract and did not constitute a breach. On the antitrust claim, the court provided two independent reasons for its failure. First, under long-standing Supreme Court precedent established in cases like Federal Baseball Club and Flood v. Kuhn, the 'business of baseball' is exempt from the Sherman Act. The court found that the Cubs' actions in presenting and marketing their games fell squarely within this exemption. Second, even if the exemption did not apply, the Rooftops failed to define a plausible relevant market for their monopolization claim. Their proposed market of 'live Cubs games' was an impermissible single-brand market, as Cubs games compete with numerous other live entertainment and sporting options available to consumers in Chicago.
Analysis:
This decision strongly reaffirms the breadth and durability of Major League Baseball's judicially-created antitrust exemption, extending its protection to an individual team's business decisions regarding stadium renovations and the presentation of its product. The ruling also underscores a fundamental principle of contract law: courts will enforce the plain language of an agreement between sophisticated parties and will not rewrite a contract to provide a better bargain for one side. The case serves as a powerful illustration of how a broadly worded exception ('any expansion') can override more specific contractual protections, highlighting the critical importance of precise drafting in commercial agreements.
