Chicago Studio Rental, Incorporated, Chicago Studio City Real Estate Holdings, LLC, Plain tiffs-Appellants,
Illinois Department of Commerce and Economic Opportunity, Illinois Film Office, Betsy Steinberg, in both her official and individual capacity, Defendants-Appellees.
September 4, 2019
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. l:15-CV-04099 -
Sara L. Ellis, Judge.
Rovner, Scudder, and St. Eve, Circuit Judges
EVE, CIRCUIT JUDGE
nearly 30 years, Chicago Studio Rental, Incorporated and
Chicago Studio City Real Estate Holdings, LLC (collectively,
"Chicago Studio") operated the only film studio in
Chicago, Illinois. That changed around 2010 when Chicago Film
Studio Holdings, LLC and Chicago Film Studio Industrial Real
Estate Holdings, LLC (collectively, "Cinespace")
opened a new studio. Within a handful of years, Cinespace
rapidly expanded its studio to include 26 more stages and 24
times more floor space than Chicago Studio's facility.
Chicago Studio could not keep up, failed to attract
production business, and ultimately stopped making a profit.
Studio sought to blame others for its demise and filed this
action against the Illinois Department of Commerce and
Economic Opportunity, Illinois Film Office, and Betsy
Steinberg-three Illinois state actors responsible for
promoting the Illinois film industry. Chicago Studio alleged
that Defendants unlawfully steered state incentives and
business to Cinespace in violation of the Sherman Act and
equal protection and due process under the Fourteenth
Amendment. The district court granted Defendants' motion
to dismiss the Sherman Act and due process claims. It later
granted summary judgment on the equal protection claim.
Chicago Studio now appeals these decisions on the Sherman Act
and equal protection claims.
affirm. The district court properly dismissed the Sherman Act
claim because Chicago Studio failed to adequately plead an
antitrust injury. The complaint merely alleges injuries to
Chicago Studio, not to competition. We also conclude that the
district court properly granted summary judgment on the equal
protection claim. Chicago Studio and Cinespace are not
similarly situated, and there was a rational basis for
Steinberg's conduct. We further find that the district
court did not abuse its discretion in striking Chicago
Studio's additional statement of facts for noncompliance.
1979, Chicago Studio has operated a film and television
production studio in Chicago, Illinois. Chicago Studio has
four studio stages measuring 62, 000 square feet. It requires
production companies to lease its production equipment for a
.4% charge. The studio does not have installed air
conditioning, but Chicago Studio can provide industry
standard portable air conditioning units for an additional
charge. It does not have scene docks, which would allow large
trailers to unload equipment inside the studio. During the
relevant time period, Chicago Studio could accommodate one
large or two average projects at a given time.
began operating a studio in Chicago around 2010. Cinespace is
not a party to this action, but it is Chicago Studio's
only competitor in the Chicago area. By the end of 2012,
Cinespace had 600, 000 square feet of floor space and 10
stages. The studio expanded to 1.5 million square feet of
floor space and 30 stages by January 2015. Cinespace's
studio can accommodate two-story sets and includes air
conditioning, inside breezeways and scene docks, concrete
floors, soundproof walls, and new offices. Cinespace permits
production companies to use any equipment rentals they choose
including an unaffiliated equipment rental company called
Cinelease that charges .2%.
three Defendants are Illinois state actors. The Illinois
Department of Commerce and Economic Opportunity
("IDCEO") is a division of Illinois government
tasked with promoting Illinois's profile as a leading
business destination. To promote the Illinois film industry,
IDCEO administers grant programs to film studios and tax
credits to film producers. See 35 ILCS 16/10; 111.
Admin. Code tit. 14, § 528.70 (2013). The Illinois Film
Office ("IFO") is part of IDCEO, and Betsy
Steinberg served as the IFO Managing Director during Governor
Patrick Quinn's administration. The IFO's principal
purpose is to support the Illinois film industry.
See 35 ILCS 16/5 ("Illinois must move
aggressively with new business development investment tools
so that Illinois is more competitive in site location
decision-making for film productions.... It is the purpose of
this Act to preserve and expand the existing human
infrastructure for the motion picture industry in
Studio claims that IDCEO, IFO, and Steinberg conspired with
Cinespace to boycott Chicago Studio and to steer business
towards Cinespace. They did so by administering 30% film tax
credits to producers and issuing five state grants totaling
$27.3 million to Cinespace. Due to a change in
administration, Cinespace returned $10 million to Illinois.
Chicago Studio also alleges that Defendants failed to mention
Chicago Studio to producers, encouraged producers to use
Cinespace, excluded Chicago Studio from business meetings,
and did not allow Chicago Studio to bid on production
opportunities. Chicago Studio states that it applied for two
grants, but it did not receive either.
consistently reached out to Steinberg and IFO for assistance
with marketing and procuring film and television production
business. It also hired a lobbyist to apply for grant money
from the State of Illinois. Steinberg provided help to
Chicago Studio whenever it asked, but it rarely did. Chicago
Studio did not ask Steinberg to contact Hollywood film
producers on its behalf because it had done business with
them for years. Chicago Studio does not identify a single
instance where it reached out to Steinberg for help, and
Illinois film industry became more profitable over the
relevant time period. In 2009, the Illinois film industry
earned approximately $104 million in gross revenue. In 2012
and 2013, it made approximately $184 million and $350 million
in gross revenue, respectively. The industry also created new
jobs, approximately 7, 082 in 2009 to 15, 627 in 2013.
steering business towards Cinespace, Chicago Studio asserts
that IDCEO, IFO, and Steinberg became active market
participants in the "Chicago Film Production
Market," which it defines as entities providing
production facilities in Chicago. Defendants' conduct
resulted in the following alleged injuries: (1) a decrease in
Chicago Studio's market share from 100% to 10%, (2)
Chicago Studio's inability to compete in the market, (3)
a reduction in ...