Rooftop Owners Sue Cubs Over Wrigley Field Renovations

The proposed renovation of Wrigley Field continues to keep Chicago-area lawyers busy. A week and a half after the owners of rooftops overlooking the stadium filed their second lawsuit against the city of Chicago – arguing that the city’s approval of the renovation was legally invalid – the owners of two rooftop businesses sued the team itself on Tuesday.   The new lawsuit asserts a variety of claims against the Cubs, including illegal monopolization, deceptive trade practices, defamation, and breach of contract.  A copy of the complaint is available here.

I discussed the history of the dispute between the rooftop owners and Cubs in a post last week.  In short, though, the rooftop owners contend that the team’s renovation plans – including two new scoreboards to be constructed in left and right field – will block their views into Wrigley Field.  Although property owners traditionally do not have any legal right to an unobstructed view – meaning that your neighbor can lawfully build a structure blocking your ocean view, for instance – in this case the Cubs and rooftop owners entered into an agreement back in 2004 giving the rooftops some limited rights to an unobstructed view into the stadium.

Despite this agreement, until yesterday the rooftop owners had focused their legal efforts on challenging the city’s approval of the Wrigley Field renovation.  This was due to contractual language in the rooftop owners’ 2004 agreement with the Cubs stating that “Any expansion of Wrigley Field approved by governmental authorities shall not be a violation of this Agreement.”

Based on this language, it appeared that the rooftop owners had concluded that their best hope of derailing the construction of the new scoreboards was to argue that the city’s approval of the renovation was invalid.  While the legal challenges to the city’s approval of the plans remain pending, the owners of two rooftop businesses have now decided to directly sue the Cubs over the renovation.

The new lawsuit contains a number of juicy allegations regarding the Cubs’ behind-the-scenes negotiations with the rooftop owners, several of which the team will undoubtedly deny.  Several of these allegations may prove to be legally significant.

First, the complaint alleges that in a series of meetings with the rooftop owners, Cubs officials (including the team’s owner, Tom Ricketts) repeatedly complained that the rooftop businesses had created a “price war” for Cubs tickets by selling rooftop tickets at reduced rates on websites like Groupon.  The team reportedly told the rooftop owners that this competition reduced demand for the team’s tickets, costing the team money.

As a result, the lawsuit alleges that the team demanded in 2012 that the rooftop owners “agree with the Cubs on setting coordinated, minimum ticket prices,” or, in other words, that the rooftops form an illegal price-fixing agreement.  Although the rooftop owners refused, the Cubs allegedly continued to demand that they work with the team to set minimum ticket prices for Cubs games.

The suit also emphasizes statements made by Tom Rickets at the team’s annual Cubs Convention in 2014, where Ricketts allegedly analogized the rooftop businesses to someone selling tickets to watch their neighbor’s cable through the window.  The lawsuit contends that this characterization has soured fans’ impressions of the rooftop businesses, causing some customers to boycott the rooftops.

The new lawsuit also builds off the allegations in the case filed against the city of Chicago a week and a half ago, providing further support for the contention that the Cubs revised their renovation plans – and in particular, the proposed location of the scoreboards – specifically to block the view of those rooftop owners who have refused to sell their buildings to the team at cut-rate prices.

Tuesday’s lawsuit relies on these allegations to assert a variety of legal claims against the Cubs.  The rooftop owners argue, for example, that the Cubs are illegally attempting to monopolize the market for Cubs tickets by driving the rooftop owners out of business.  The suit further contends that Tom Ricketts’ statements at the 2014 Cubs Convention violate various laws against unfair or deceptive business practices by unfairly analogizing the rooftop owners to someone watching their neighbors’ cable.  These same comments have also defamed the rooftop owners by damaging their reputation in the community, according to the suit.

In addition, the suit asserts that the construction of the proposed scoreboards would violate the Cubs’ 2004 agreement with the rooftop owners, in which the team agreed “not erect windscreens or other barriers to obstruct the views of the Rooftop.” As I noted last week, the rooftop owners face an uphill battle on this claim, since that same provision later includes the language quoted above stating that any expansion of Wrigley Field approved by the city would not violate the agreement.  The rooftop owners will likely try to argue that the scoreboards themselves are not an “expansion” of the stadium, and thus still prohibited under the agreement, but this argument is a bit of a stretch considering that the new signs are an integral part of the Wrigley Field renovation plans approved by the city.

Based on these claims, the lawsuit asks the court to not only award the rooftop owners monetary damages, but to also issue an injunction preventing the Cubs from installing installing any sign or scoreboard that would obstruct their view into the stadium.  If granted, this injunction would obviously derail an important part of the Wrigley Field renovation project.

Ultimately, though, the court is unlikely to grant the rooftop owners the relief they have requested.  The Cubs will be able to assert several strong defenses in the case.  Perhaps most significantly, the team can ask the court to dismiss the entire lawsuit and instead force the parties to resolve their dispute through arbitration.  The 2004 agreement between the rooftop owners and Cubs includes a provision stating that “All disputes arising under this Agreement shall be arbitrated.”  Because all of the allegations in the new suit directly relate to the rooftop businesses’ relationship with the team, the Cubs can argue that the entire case arises under the 2004 agreement, and therefore must be arbitrated.

Courts typically require parties to arbitrate a dispute when they have agreed to a provision like the one in the 2004 agreement.  The rooftop owners may try to argue that some of its claims – such as the one alleging illegal monopolization – do not “arise under” the 2004 agreement, and therefore should be allowed to proceed in court.  On the whole, though, because most of the claims in the rooftop owners’ suit do relate to the 2004 agreement, the court will likely conclude that the bulk of the case should be resolved in arbitration (assuming the Cubs request it).

Alternatively, the Cubs could ask the court to dismiss some of the claims in the lawsuit on their merits, avoiding the need to defend themselves on those grounds in arbitration. For instance, the team can argue that the rooftop owners’ antitrust claims are covered by baseball’s antitrust exemption, and therefore must be thrown out.  Similarly, the club could assert that Tom Ricketts’ analogizing the rooftop businesses to watching a neighbor’s cable in no way damaged the rooftop owners’ reputation, and therefore does not qualify as defamation. Even if the Cubs adopt this approach, though, they will likely ask that at least some of the rooftop owners’ case – including the breach of contract claims – be sent to arbitration.

Much like the suit filed a week and a half ago, then, Tuesday’s lawsuit appears unlikely to permanently derail the Wrigley Field renovations.  Still, the case presents another hurdle for the Cubs to clear before the stadium renovation can be finalized.

Nathaniel Grow is an Associate Professor of Business Law and Ethics and the Yormark Family Director of the Sports Industry Workshop at Indiana University's Kelley School of Business. He is the author of Baseball on Trial: The Origin of Baseball's Antitrust Exemption, as well as a number of sports-related law review articles. You can follow him on Twitter @NathanielGrow. The views expressed are solely those of the author and do not express the views or opinions of Indiana University.

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9 years ago

don’t mess with the Ricketts’ money, how else will son Pete get re-elected as Nebraska’s governor in 4 years?