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Peo. Ex Rel. Scott v. Schwulst Bldg. Center

OPINION FILED FEBRUARY 2, 1982.

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

v.

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



Appeal from the Appellate Court for the Fourth District; heard in that court on appeal from the Circuit Court of McLean County, the Hon. James A. Knecht, Judge, presiding.

JUSTICE MORAN DELIVERED THE OPINION OF THE COURT:

Rehearing denied March 25, 1982.

The circuit court of McLean County granted the motion of defendants, Schwulst Building Center, Inc., Carl F. Schwulst, Jr., and Warren W. Schwulst, to dismiss with prejudice an action brought by the Attorney General of Illinois (State) arising under section 3(4) of the Illinois Antitrust Act (Act) (Ill. Rev. Stat. 1979, ch. 38, par. 60-3(4)). The appellate court, in a two-to-one decision, held that section 3(4) does not apply to land and affirmed the dismissal of the complaint insofar as it was brought under section 3(4) of the Act. However, it reversed the trial court's order of dismissal with prejudice and remanded the case to allow the State to amend its complaint. 92 Ill. App.3d 552.

The primary issue before us is whether section 3(4) of the Act applies to land. As a corollary issue, we must determine if that section mandates application of the so-called "per se" test.

The facts were adequately related by the appellate court. To summarize, the record reveals that defendants own or control many single-family building lots in the Bloomington-Normal area. They are also engaged in selling building materials to contractors and home builders in the same area. Defendants sold some of the materials as a package, consisting principally of preassembled roof trusses, floor trusses, exterior and interior walls, and exterior trim. The State filed suit, alleging that the purchase of a building lot was conditioned upon the purchase of a package of building materials to be used in the same lot, thereby violating section 3(4) of the Act.

The original complaint was filed on February 16, 1977. Defendants' motions to dismiss under sections 45 and 48 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, pars. 45, 48) were allowed with leave to plead over. The amended complaint, which is at issue here, was filed July 29, 1977. Motions to dismiss were denied. On November 17, 1977, defendants filed a demand for a bill of particulars, which was allowed by the trial court. Plaintiff filed the bill of particulars, and defendants filed a motion to strike the same. The trial court allowed the motion to strike with leave to amend. Plaintiff filed an amended bill of particulars, after which defendant filed a motion to strike the amended bill and also to dismiss the action with prejudice. On March 25, 1980, the trial court granted defendants' motion, stating only 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. As indicated above, the appellate court majority concluded that section 3(4) of the Act does not apply to land and that the State, therefore, would be unable to state a cause of action under that section. The court found, however, that it does not follow that plaintiff could not state a cause of action under the Sherman-type provisions of section 3, particularly section 3(2) of the Act, and reversed the dismissal with prejudice and the order striking the amended bill of particulars. 92 Ill. App.3d 552.

We initially note that the Illinois Antitrust Act, enacted in 1965 (Ill. Rev. Stat. 1979, ch. 38, pars. 60-1) was patterned after the Sherman Act (15 U.S.C. § 1 et seq. (1976)) and consciously omitted the Clayton Act (15 U.S.C. § 12 et seq. (1976)). (Ill. Ann. Stat., ch. 38, Commentary on the 1967 Illinois Antitrust Act, at 441 (Smith-Hurd 1977).) Section 3(4) was added to the Illinois Antitrust Act in 1969 and was inserted immediately following sections 3(1), 3(2) and 3(3), which were part of the Act enacted in 1965. As the appellate court indicated, section 3(4) was an almost verbatim enactment of section 3 of the Clayton Act verbiage with two major exceptions: (1) The addition of the words "or services" and (2) the elimination of the words necessary for Federal jurisdiction.

Section 3 of the Illinois act provides:

"Every person shall be deemed to have committed a violation of this Act who shall:

(4) Lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, or services, whether patented or unpatented, for use, consumption, enjoyment, or resale, or fix a price charged thereof, or discount from, or rebate upon, such price, on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodity or service of a competitor or competitors of the lessor or seller, where the effect of such lease, sale or contract for such sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce; * * *." (Emphasis added.) (Ill. Rev. Stat. 1979, ch. 38, par. 60-3(4).)

One violation set forth in this section is commonly referred to as a tying arrangement whereby a party agrees to sell or lease an item (the tying item) only on the condition that the purchaser or lessee also purchase a different item (the tied item).

The State argues that use of the term "commodities" in section 3(4) demonstrates a legislative intent that the section apply to land. Conversely, defendants argue that alleged tying actions under section 3(4) cannot include real estate as one of the tying or tied items. To support their position, the defendants contend that the language used in section 3(4) is very similar to the language used in section 3 of the Clayton Act, as well as the statutes of other States. Inasmuch as neither the Federal nor State cases construe this similar language as applying to land, defendants argue that section 3(4) of the Act likewise does not pertain to land.

We acknowledge the similarity of section 3(4) to section 3 of the Clayton Act (15 U.S.C. § 14 (1976)). And, as defendants point out, the term "commodities" as it appears in the Clayton Act as well as State statutes is held not to include real property. (E.g., Columbia Broadcasting System, Inc. v. Amana Refrigeration, Inc. (7th Cir. 1961), 295 F.2d 375, 378; Moore v. Jas. H. Matthews & Co. (9th Cir. 1977), 550 F.2d 1207; Suburban Mobile Homes, Inc. v. AMFAC Communities, Inc. (1980), 101 Cal.App.3d 532, 549-50, 161 Cal.Rptr. 811, 821.) We also note section 11 of the Act, which provides that courts>, in construing the Act, "shall follow the construction given to the Federal Law by the Federal Courts>." The Bar Committee Comments (Ill. Ann. Stat., ch. 38, par. 60-11, Bar Committee Comments — 1967, at 513 (Smith-Hurd 1977)) add that the Illinois act should be construed like the Federal acts when "the language and structure of the Illinois Act do not indicate that a different result was intended." (See Wash. Rev. Code 1961, tit. 19, § 19.86.050, which is identical to section 3(4) of the Illinois act and which is to be construed by the ...


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