Gilbert's Ethan Allen Gallery v. Ethan Allen, Inc.

JUSTICE GOLDENHERSH,

dissenting:

I respectfully dissent from the majority’s reversal on issue (1). In affirming the judgment concerning Ely, I concur.

In my belief the majority mistakenly construes, and assumes, that section 3(3) of the Illinois Antitrust Act (the Illinois Act) (Ill. Rev. Stat. 1985, ch. 38, par. 60 — 3(3)) is sufficiently similar to section 2 of the Sherman Antitrust Act (Sherman Act) (15 U.S.C.A. §2 (West Supp. 1993)) so that Federal precedents are controlling in the interpretation of the Illinois Act. A closer examination of the language of the two statutes shows they are not sufficiently similar, as the trial court correctly found. The historical notes and bar committee comments also support this.

The trial court correctly applied the law in finding that Ethan Allen violated section 3(3) of the Illinois Act, which provides that every person shall be deemed to have committed a violation of the Illinois Act if they:

“(3) Establish, maintain, use, or attempt to acquire monopoly power over any substantial part of trade or commerce of this State for the purpose of excluding competition or of controlling, fixing, or maintaining prices in such trade or commerce.” (Ill. Rev. Stat. 1985, ch. 38, par. 60-3(3).)

Section 11 of the Illinois Act provides, in pertinent part:

“When the wording of this Act is identical or similar to that of a federal antitrust law, the courts of this State shall use the construction of the federal law by the federal courts as a guide in construing this Act.” Ill. Rev. Stat. 1985, ch. 38, par. 60 — 11.

In the case before us, the trial court found that section 3(3) of the Illinois Act is worded differently than section 2 of the Sherman Act, which reads:

“Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fíne not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.” 15 U.S.C.A. §2 (West Supp. 1993).

Upon comparing the two statutes, the trial court correctly reasoned that section 2 of the Sherman Act prohibits monopolizing, attempts to monopolize, and conspiracy to monopolize trade or commerce, while section 3(3) of the Illinois Act prohibits monopolizing only when it is done for the purpose of excluding competition or of controlling, fixing, or maintaining prices. After concluding that section 3(3) of the Illinois Act differs significantly from the Sherman Act, the trial court found little value in Federal precedent and declined to use the construction of the Federal law by Federal courts in resolving this case.

Ethan Allen argues that the trial court erred in declining to apply Federal law to the case at bar. In support of this argument, Ethan Allen cites Maywood Sportservice, Inc. v. Maywood Park Trotting Association, Inc. (1973), 14 Ill. App. 3d 141, 302 N.E.2d 79, where our colleagues on the First District Appellate Court held that section 2 of the Sherman Act is substantially the same as that of section 3(3) of the Illinois Act. (Maywood Sportservice, Inc., 14 Ill. App. 3d at 151, 302 N.E.2d at 86; see also Ray Dancer, Inc. v. D M C Corp. (1992), 230 Ill. App. 3d 40, 594 N.E.2d 1344.) I would decline to adopt that position, and I agree with the trial court that the two statutes are not identical or similar. The language of the two statutes, as well as the comments to the Illinois Act, stand contrary to the position of both cases. The lack of analysis in depth of the two statutes in Maywood and Ray Dancer suggests that this was not at issue in either case. We are free, however, to conduct a more extensive statutory analysis, which I think leads to a conclusion contrary to the majority’s position. Further, the General Assembly’s enactment of section 11 indicates an intent that Illinois antitrust law not be in total lockstep with the Federal Acts; the majority’s position renders section 11 useless. Both the language and the intent of the State and Federal Acts are different. Therefore, section 11 of the Illinois Act does not apply, and we should not consider Federal precedent as binding.

The comments to the statute further support this conclusion. As noted in the historical and practice notes concerning subsection 3(3):

“Subsection (3) prohibits establishing, maintaining, acquiring, or attempting to acquire monopoly power in order to exclude competition or fix prices. Its scope, essentially that of Section 2 of the Sherman Act, is somewhat more restricted than the federal law.
* * *
Subsection 3(3) of the Illinois Act is narrower than its federal counterpart. It not only adopts the ‘abuse’ theory, but it covers only two types of abuses, albeit the two which are important from a practical standpoint. It prohibits monopolizing only when it is done for the purpose of excluding competition or fixing prices.” Ill. Ann. Stat., ch. 38, par. 60 — 3, Historical and Practice Notes — 1970, at 463 (Smith-Hurd 1977).

Similarly, the bar committee comments to subsection 3(3) state:

“This section would penalize the monopolist only when he acted for the forbidden purposes of excluding competition or of fixing prices. It is, therefore, directed only to abuses and attempted abuses of monopoly power rather than to its mere existence. To that extent the prohibition is somewhat narrower than that applied to Section 2 of the Sherman Act and is also somewhat more specific.” (Ill. Ann. Stat., ch. 38, par. 60 — 3(3), Bar Committee Comments — 1967, at 454 (Smith-Hurd 1977).)

Again, the cases cited by the majority for the proposition that section 3(3) and the Federal Act are identical do not go into any appreciable depth of analysis of the two Acts. When we analyze the comments as well as the statutory language, we must conclude that the Acts are different and therefore, pursuant to legislative intent, should be construed differently as section 11 allows.

Similarly, the trial court was not inconsistent in using Federal per se violation cases for guidance in determining that issue while stating that Federal cases are not binding on the court, as noted by the majority. As noted by the majority, our supreme court has indicated that the Federal precedents can be useful guidance; they do not, however, necessarily fall under section 11 and become binding precedent.

As the trial court correctly points out, there is a dearth of Illinois cases addressing section 3(3) of the Illinois Act. M B L (USA) Corp. v. Diekman (1985), 137 Ill. App. 3d 238, 484 N.E.2d 371, holds that a violation of section 3(3) of the Illinois Act is a “per se" violation of the Act, which makes a market-share analysis or rule-of-reason analysis unnecessary. Accordingly, we should hold that the trial court applied the correct principles of law in finding that Ethan Allen violated section 3(3) of the Illinois Act.

Although Ethan Allen does not dispute the existence or amount of plaintiff’s actual damages, Ethan Allen claims that the damages are not recoverable as a matter of law. In support of this argument, Ethan Allen asserts that Federal law precludes the type of damages plaintiff received in this case. We should properly hold that Federal law is not controlling on this case, however. Section 7(2) of the Illinois Act provides, in pertinent part:

“(2) Any person who has been injured in his business or property, or is threatened with such injury, by a violation of Section 3 of this Act may maintain an action in the Circuit Court for damages, or for an injunction, or both, against any person who has committed such violation. *** In an action for damages, if injury is found to be due to a violation of *** [] *** subsections (2) or (3) of Section 3 of this Act, the person injured shall recover the actual damages caused by the violation, together with costs and reasonable attorney’s fees ***.” (Ill. Rev. Stat. 1991, ch. 38, par. 60-7(2).)

Ethan Allen’s argument and supporting cases are inapplicable to the case at bar, and the language of the Illinois Act clearly allows for actual damages and attorney fees. Since Ethan Allen did not dispute plaintiff's evidence at trial on the issue of damages and does not claim on appeal that plaintiff did not sustain actual damages, we need not further discuss this issue.

As stated earlier, section 7(2) of the Illinois Act provides that persons injured by violations of section 3(3) “shall recover the actual damages caused by the violation, together with costs and reasonable attorney’s fees.” (Ill. Rev. Stat. 1991, ch. 38, par. 60 — 7(2).) In Fumarolo v. Chicago Board of Education (1990), 142 Ill. 2d 54, 566 N.E.2d 1283, our supreme court held:

“The fundamental of statutory construction is to ascertain and give effect to the intent of the legislature. [Citation.] In construing statutory provisions as being mandatory or directory, the word ‘shall’ is regarded as indicative of a mandatory legislative intent. [Citations.] This court has recognized, however, that, while ‘shall’ ordinarily indicates a mandatory legislative intention, it may be construed as permissive if the context so indicates. [Citations.]
Legislative intent can be ascertained from a consideration of the entire Act, its nature, its object and the consequences that would result from construing it one way or the other.” Fumarolo, 142 Ill. 2d at 96, 566 N.E.2d at 1301-02.

Here, the language of section 7(2) indicates a mandatory construction. In that same section, the statute directs the court to use discretion in awarding treble damages. An examination of the General Assembly’s omission of that directive to use discretion with regard to attorney fees and its use of the word “shall” indicates that the General Assembly intended that the award of attorney fees be mandatory in a case such as this. I would therefore reverse the trial court’s order denying plaintiff attorney fees and remand the case for determination of plaintiff’s reasonable attorney fees.

For the foregoing reasons, I respectfully dissent.