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Bluestar Management LLC v. Annex Club

July 12, 2010

BLUESTAR MANAGEMENT LLC D/B/A WRIGLEY DONE RIGHT, PLAINTIFF,
v.
THE ANNEX CLUB, LLC D/B/A THE IVY LEAGUE BASEBALL CLUB, WRIGLEY ROOFTOPS IV, LLC D/B/A SHEFFIELD BASEBALL CLUB, WRIGLEY ROOFTOPS III, LLC D/B/A WRIGLEY FIELD ROOFTOP CLUB AND THOMAS GRAMATIS, DEFENDANTS.



The opinion of the court was delivered by: Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER

Plaintiff, BlueStar Management LLC ("BlueStar") d/b/a Wrigley Done Right ("Wrigley Done Right"), has brought a seven-count complaint against defendants, The Annex Club d/b/a The Ivy League Baseball Club (the "Ivy League Club"), Wrigley Rooftops IV, LLC d/b/a Sheffield Baseball Club (the "Sheffield Club"), Wrigley Rooftops III, LLC d/b/a Wrigley Field Rooftop Club (the "Wrigley Rooftop Club"), and Thomas Gramatis ("Gramatis"), alleging: false designation of origin in violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A) (Count I); false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B) (Count II); anticompetitive conspiracy in violation of Section I of the Sherman Act, 15 U.S.C. § 1 (Count III); tortious interference with a prospective business relationship (Count IV); violation of the Illinois Deceptive Trade Practices Act, 815 ILCS 510/1 et seq. (Count V); violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. (Count VI); and common law unfair competition (Count VII). Defendants have moved to dismiss the complaint in its entirety pursuant to Fed. R. Civ. P. 12(b)(6) and 9(b). For the reasons discussed below, defendants' motion is granted as to Counts III, IV, and VII, and denied as to Counts I, II, V, and VI.

BACKGROUND

BlueStar is the proprietor of a rooftop club -- Wrigley Done Right -- licensed by the City of Chicago (the "City") to charge admission to view Chicago Cubs baseball games and other events at Wrigley Field. There are fifteen such clubs with current Special Club Licenses issued by the City. BlueStar promotes its club through a variety of marketing initiatives and maintains a website at .

In 2008, BlueStar alleges that Gramatis began to spread false rumors and statements about BlueStar's consultant, Dean Bravos, and manager, Lee Gramatis, to City inspectors with the intent of interfering with the process of inspection and permit issuance for Wrigley Done Right. In addition, Gramatis allegedly told prospective customers of Wrigley Done Right that the club "would never get a license or occupancy card to open." Gramatis made these statements even though he was aware that the Wrigley Done Right facility had previously complied with City ordinances when Gramatis leased the same building during the 2004 and 2005 baseball seasons. The City subsequently issued BlueStar all the permits required for operation.

The complaint further alleges that the Wrigley Rooftop Club is currently paying for a "sponsored result" advertisement on the website that features a photograph of the Wrigley Done Right roof top building adjacent to a link to the website for the Wrigley Rooftop Club. Aside from being a direct competitor of the Wrigley Rooftop Club, Wrigley Done Right is situated in a well-known building that is twice as wide and better located than the Wrigley Rooftop Club.
The complaint further alleges that the Ivy League Club and Gramatis have misrepresented that the Ivy League Club, located at 3637 Sheffield, is open for business, when it has in fact been closed for construction since prior to the 2008 season. From January 2008 until sometime in 2009, the Ivy League Club was being promoted and advertised on without any disclosure to consumers that the rooftop was closed. Sometime in June 2009, a small disclaimer was added to the Ivy League Club's website stating:

Please Note: Ivy League Baseball Club is currently undergoing a complete renovation and we anticipate the grand reopening on July 24, 2009. In the event that Ivy League Baseball Club is not available for your event, customers will be accommodated at one of our new facilities at Sheffield Baseball Club located at 3619 N. Sheffield or Wrigley Field Rooftop Club located at 3617 N. Sheffield.

Despite being under construction and lacking the necessary permits, the Ivy League Club took a significant number of reservations in 2009. Only after guests arrive for a game were they notified that the Ivy League Club was closed, and redirected to the Sheffield Baseball Club and the Wrigley Rooftop Club. These other clubs are located approximately 200 feet away from the Ivy League Club's mid-center field location. Only after receiving a cease and desist letter from BlueStar did the Ivy League Club change its reopening date on its website to September 2009.

Notwithstanding its closure, a link to the Ivy League Club website remained listed on , an internet directory authorized by and listed on the Chicago Cub's official website under "Rooftop Partners." This website allegedly generates significant business among Cubs fans. In addition, Gramatis allegedly has falsely represented on the Wrigley Rooftop Club's Facebook page that consumers can "[e]njoy a fantastic unobstructed view of Wrigley Field and the Chicago Cubs from any one of our three new state of the art facilities."

Additionally, the complaint alleges that defendants have intentionally used their collective power and influence to preclude Wrigley Done Right from joining the Wrigley Rooftop Association (the "Rooftop Association"), an association of most of the Special Club License holders and operators of Wrigley rooftop venues. Without membership in the Rooftop Association, Wrigley Done Right is prevented from participating in organized meetings with the local community and alderman to discuss issues related to operation of the rooftops, including new ordinances and license requirements, and to advocate on behalf of its business interests.

Defendants have also allegedly interfered with Wrigley Done Right's sales by interfering with its inclusion on the website. According to the WHOIS database, the domain name is owned by the Rooftop Association, and Gramatis is listed as the administrative contract. The Rooftop Association is not incorporated and is not listed with the Illinois Secretary of State Corporate records. A "Wrigley Rooftops Property Owners Association" is identified, but was dissolved in 2004. From approximately January 7, 2008, until May 5, 2008, Gramatis repeatedly refused to list Wrigley Done Right on the website and instead fraudulently linked it to his own rooftop's website . This allegedly resulted in lost sales for Wrigley Done Right.

DISCUSSION

When ruling on a motion to dismiss for failure to state a claim, the court accepts the complaint's well-pleaded factual allegations as true and draws all reasonable inferences in the plaintiff's favor. Sprint Spectrum L.P. v. City of Carmel, Indiana, 361 F.3d 998, 1001 (7th Cir. 2004). The complaint must describe the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds on which the claims rest. The allegations must plausibly suggest that the plaintiff has a right to relief, raising the possibility above the "speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-73, 167 L.Ed.2d 929 (2007).

As a preliminary matter, defendants argue that the complaint should be dismissed in its entirety because plaintiff's predicate allegations fail to comply with Fed. R. Civ. P. 9(b). The court will consider ...


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