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People Ex Rel. Scott v. Schwulst Building Center

OPINION FILED JANUARY 7, 1981.

THE PEOPLE EX REL. WILLIAM J. SCOTT, ATTORNEY GENERAL, PLAINTIFF-APPELLANT,

v.

SCHWULST BUILDING CENTER, INC., ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of McLean County; the Hon. JAMES A. KNECHT, Judge, presiding.

MR. JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:

This appeal raises a basic question of statutory interpretation of the Illinois Antitrust Act (Ill. Rev. Stat. 1979, ch. 38, par. 60-1 et seq.) (the Act), and a related question of pleading. These center upon the validity of a complaint brought under section 3(4) of the Act, charging what is commonly referred to in antitrust argot as "tying," or a "tied sale." A tied sale is generally understood as being one in which the vendor sells a product only on condition that the vendee purchase from him another related product. The latter is ordinarily useful, even sometimes necessary, to the enjoyment of the former.

The record reveals that the defendants own or control a number of single-family building lots in the Bloomington-Normal area. In addition, they are engaged in selling building materials to contractors and home builders in the same area. Some of the materials are sold as a package, consisting principally of preassembled roof trusses, floor trusses, exterior and interior walls and exterior trim.

Pursuant to the power granted him by section 7.2 of the Act, the Attorney General of Illinois conducted a lengthy investigation of the defendants, who are the corporation engaged in the business described above and its two chief operating executives. This culminated in the filing of the instant suit which seeks civil remedies, injunctive relief under section 7(1) and monetary penalties under section 7(4) of the Act.

The alleged violation, under section 3(4) as indicated above, was that the purchase of a building lot was conditioned upon the purchase of a package of building materials to be used on the same lot.

The original complaint was filed in the circuit court of McLean County on February 16, 1977. Each defendant moved to dismiss under sections 45 and 48 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, pars. 45, 48). These motions were allowed by the trial court on June 22, 1977, with leave to plead over allowed. The amended antitrust complaint, which is at issue here, was filed July 29, 1977. Similar motions to dismiss the amended complaint were denied on November 2, 1977, and December 30, 1977.

Meanwhile, on November 17, 1977, the defendants filed a demand for a bill of particulars. This demand was allowed by the trial court on January 3, 1978, and plaintiff filed the bill on February 10, 1978. On March 3, 1978, defendants filed a motion to strike the bill. Arguments were heard on the motion on August 3, 1978, and the matter was taken under advisement for a little over 12 months. On August 7, 1979, the trial court allowed the motion to strike the bill with leave to plead over allowed.

Plaintiff filed an amended bill of particulars on September 6, 1979. Defendants filed a motion to strike the amended bill and to dismiss the action with prejudice. This motion was allowed on March 25, 1980. The trial court assigned no specific reasons for its order but held simply that the amended complaint did not state a cause of action and the bill of particulars did not reasonably answer the questions posed by the defendants.

A short resume of the history of the Federal and State antitrust laws will be helpful in setting the stage for our conclusions. The first Federal law of significance was the Sherman Act (15 U.S.C. §§ 1-7 (1976)) which deals with monopolistic practices. It was passed by Congress in 1890. Illinois followed with its own antitrust act, largely patterned after the Sherman Act, in 1891. In 1914, Congress added the Clayton Act (15 U.S.C. §§ 12, 13, 14-21, 22-27 (1976)), which is generally thought of as concerned with exclusive dealings and related practices.

The basic provision of the Clayton Act (15 U.S.C. § 14 (1976)) has not been amended since its passage. It must be borne in mind always that although the Sherman Act and the Clayton Act are contained within the same title of the U.S. Code, they are separate statutes aimed at correcting differently perceived evils. Neither their substance nor their procedure is identical.

The 1891 Illinois antitrust statute was largely ignored and not enforced. In 1965, the legislature repealed the statute and enacted a wholly new one, the Illinois Antitrust Act (Ill. Rev. Stat. 1979, ch. 38, pars. 60-1 et seq.). The 1965 act was again patterned on the Sherman Act and consciously omitted the Clayton Act.

In its Commentary on the 1967 Illinois Antitrust Act, the Committee on Antitrust Laws of the Chicago Bar Association said:

"The draft was specifically intended to remove the deficiencies found to exist in the Act of 1891, summarized above. On the other hand, it was not considered wise to incorporate all features of the comparable federal legislation. S.B. 116 is similar to the federal Sherman Act of 1890 and to some of the contemporary legislation of the several States. It was not deemed necessary or desirable to include measures comparable to the several substantive antitrust sections of the Clayton Act of 1914, not to take the approach of the Federal Trade Commission Act." Ill. Ann. Stat., ch. 38, par. 60, at 441 (Smith-Hurd 1977).

In 1969, the legislature elected to add section 3(4) to the Act. This was an almost verbatim enactment of the Clayton Act verbiage with two major exceptions: (1) the addition of the words, "or services," and (2) the elimination of the words ...


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