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Paramount Media Group, Inc. v. Village of Bellwood and Image Media Advertising, Inc.

United States Court of Appeals, Seventh Circuit

July 16, 2019

Paramount Media Group, Inc., Plaintiff-Appellant,
Village of Bellwood and Image Media Advertising, Inc., Defendants-Appellees.

          Argued September 28, 2018

          Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 13 C 3994 - Jorge L. Alonso, Judge.

          Before Ripple, Sykes, and Scudder, Circuit Judges.

          Sykes, Circuit Judge.

         In 2005 Paramount Media Group, Inc., leased a parcel of highway-adjacent property in the Village of Bellwood, Illinois, and planned to build a billboard on it. But Paramount never applied for a local permit. When the Village enacted a ban on new billboard permits in 2009, Paramount lost the opportunity to build its sign.

         Paramount later sought to take advantage of an exception to the ban for village-owned property, offering to lease a different parcel of highway-adjacent property directly from the Village. But again it was foiled. The Village accepted an offer from Image Media Advertising, Inc., one of Paramount's competitors. Its goal slipping away, Paramount sued the Village and Image Media alleging First Amendment, equal-protection, due-process, Sherman Act, and state-law violations. The Village and Image Media moved for summary judgment. The district court granted the motion on the federal claims and relinquished supplemental jurisdiction over the state-law claims.

         We affirm. Paramount lost its lease while the suit was pending. That mooted its claim for injunctive relief from the sign ban. The claim for damages is time-barred, except for the alleged equal-protection violation. That claim fails because Paramount was not similarly situated to Image Media. And the Village and Image Media are immune from Paramount's antitrust claims. We need not consider whether a market-participant exception to this immunity exists because Paramount failed to support its antitrust claims.

         I. Background

         In 2005 Paramount contracted with Khushpal and Harmeet Sodhi to lease 1133-1135 Bell wood Avenue for the purpose of building a billboard. Paramount thought the property, which sits alongside the high-traffic 1-290 corridor in Chicago, was an ideal location for its sign. In 2007 it applied for and received an Illinois Department of Transportation ("IDOT") permit authorizing construction of the sign on the Sodhi property.

         But Paramount did not apply for the necessary local permit from the Village. This lapse would come back to haunt it. In 2009 the Village passed Ordinance 9-4, which mandated that "no new off-site advertising sign permit will be issued by the village." Bellwood, III., Code § 156.207(E) (2009). As Bellwood officials confirmed in later meetings with Paramount, the ordinance prevented the Village from issuing a local permit for the Sodhi property.

         In March 2012 the Village amended the ban to exempt "village owned or controlled property." Id. § 156.207(F) (2012). As luck would have it, the Village owned property at 1156 Bellwood Avenue, across the street from the Sodhi property. Seeing another opportunity to build its sign, Paramount offered to lease the property from the Village for $1, 140, 000 in increasing installments over 40 years. But Paramount wasn't alone. Image Media offered a lump sum of $800, 000. In October 2012 the Village accepted Image Media's offer without responding to Paramount. Unaware of the Village's decision, Paramount made a lump-sum offer in January 2013. The Village again did not respond.

         Paramount eventually learned of the Village's contract with Image Media. It wasn't happy. In May 2013 it sued the Village and Image Media, bringing six claims. Counts I and II alleged that the billboard ban violated the First Amendment and the Due Process Clause of the Fourteenth Amendment. Count III alleged that the lease agreement between Image Media and the Village violated the Equal Protection Clause. Count IV alleged that the ban violated § 2 of the Sherman Act. Count V alleged that the Village and Image Media violated § 1 of the Sherman Act through their lease agreement. Finally, Count VI requested a declaratory judgment that the Village lacked authority under Illinois law to enter into the lease agreement with Image Media. Paramount sought damages for lost advertising revenue and an injunction to prevent the Village from enforcing the billboard ban and its lease agreement with Image Media.

         Sometime after Paramount filed its complaint, a representative from Image Media met with Khushpal Sodhi to discuss his lease agreement with Paramount. In October 2013 the Sodhis told Paramount that they were cancelling the lease because Paramount failed to uphold its end of the bargain. They entered into a lease-option agreement with Image Media that same month. The Sodhis gave Image Media the right to lease their land for billboard construction in exchange for $30, 000. Image Media also indemnified the Sodhis from any legal actions arising out of the agreement.

         Paramount responded by adding Count VII to its complaint, which alleged that Image Media tortiously interfered with its lease agreement by contracting with the Sodhis. It also sued the Sodhis in state court seeking a declaratory judgment that its lease agreement was still enforceable. The Sodhis responded by sending a letter to the IDOT requesting that it void Paramount's state permit because they had cancelled the lease. The IDOT complied and voided Paramount's permit in March 2014. ...

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