Judge: IL Film Office's work to boost IL film industry didn't favor Cinespace over Chicago Studio City

By Cook County Record | Sep 21, 2018

A federal judge has rejected an attempt by a Chicago film and TV studio to sue the Illinois Department of Commerce and Economic Opportunity and the former director of the llinois Film Office for allegedly favoring a larger, newer competitor in doling out state assistance.

On Sept. 7, U.S. District Judge Sara L. Ellis granted the state agency's request for summary judgement, in the complaint brought by Chicago Studio City over the alleged conduct of Betsy Steinberg, former managing director for the Illinois Film Office. 

The plaintiffs, Chicago Studio Rental Inc. and Chicago Studio Real Estate Holdings, which does business as CSC, accused Steinberg of steering business to Cinespace, a competitor which, according to information in Ellis' decision, had grown from its inception in 2009 to offer more than 1.5 million square feet of climate controlled studio space across 30 stages. According to the court documents, CSC offers 60,000 square feet of space with no air conditioning.

According to the decision, CSC also "requires production companies to use its inhouse equipment rental company; whereas, Cinespace allows production companies to use any rental company. CSC does not have scene docks for unloading large trailers inside the studio; Cinespace does have scene docks."

In its complaint, CSC accused Steinberg of using her office to promote Cinespace at the expense of CSC, allegedly violating CSC's right to equal protection via the Fourteenth Amendment. 

In their lawsuit, CSC noted Cinespace received $23.3 million in grants from Illinois from 2009-2015, while CSC received none. But the judge noted Steinberg had no authority to approve any grants.

And while CSC intimated the state's intervention helped steer projects from Warner Bros. and Fox studios to Cinespace, the judge noted Cinespace routinely communicated with state office to seek aid, while CSC purportedly did not.

Judge Ellis said Steinberg's actions could be seen as flowing from the overarching purpose of her office, namely to promote and grow the film industry in Illinois.

"It is entirely reasonable that when promoting Illinois as a location for filming, Steinberg would evaluate which of the two studios was the better option for a particular project and push that option in discussions with film and television executives," Ellis said. "She also could have a taken a more passive approach and simply informed executives that there are two studios in Chicago and left it at that, but it is not irrational for her to understand her mandate as encouraging her to make efforts to actively engage in the studio marketing process."

The district court also called out CSC for attempting to sidestep a court order limiting how many "additional facts" CSC could produce in a document known as a Statement of Additional Facts.

“There are numerous other examples of unrelated communications jammed together under single paragraphs in an attempt to circumvent the court’s order allowing CSC to file at most 50 additional facts,” Judge Ellis said, noting CSC's purportd  “blatant disregard” of the court’s limiting order.

Even with the additional filings, the judge said the document was not able to prove Steinberg operated outside of her role. 

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Chicago Studio City Cinespace Chicago U.S. District Court for the Northern District of Illinois

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