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DEMETER, INC. v. WERRIES
January 7, 1988
DEMETER, INC., AN INDIANA CORP., CARGILL, INC., A DELAWARE CORP., CONTINENTAL GRAIN CO., A DELAWARE CORP., BUNGE CORPORATION, A NEW YORK CORP., THE PILLSBURY COMPANY, A DELAWARE CORP., ILLINOIS CEREAL MILLS, INC., A DELAWARE CORP., FASCO MILLS CO., AN ILLINOIS CORP., MCLAY GRAIN CO., AN ILLINOIS CORP., GERSTENBERG AND TUCKER, INC., AN ILLINOIS CORP., PLAINTIFFS,
LARRY WERRIES, DIRECTOR OF THE DEPARTMENT OF AGRICULTURE OF THE STATE OF ILLINOIS, DEFENDANT.
The opinion of the court was delivered by: Mills, District Judge:
We must declare an act of the Illinois General Assembly to
The Plaintiffs are nine federally licensed warehousemen
engaged in grain warehousing activities in Illinois. The
Defendant is Director of the Department of Agriculture of the
State of Illinois and is entrusted by state statute*fn1 with
ensuring the participation of federally licensed warehousemen
in the Illinois grain insurance program.
Here, Plaintiffs seek to enjoin the Director from commencing
any action against the Plaintiffs for Plaintiffs' failure to
comply with amendments made to Ill.Rev.Stat. ch. 114, ¶ 704 &
ch. 111, ¶ 306 (1985), by Illinois Public Act No. 84-156.
Plaintiffs maintain that these amendments to the Illinois Grain
Insurance Act and the Illinois Grain Dealers Act are
unconstitutional as they are preempted by the United States
Warehouse Act and, therefore, must be
struck down as violative of the Supremacy Clause of the United
At a preliminary hearing before this Court, it was ordered
that the Department of Agriculture be preliminarily enjoined
from enforcing the provisions of the amendments to the acts as
against the Plaintiffs and from revoking or suspending their
grain dealers' licenses or taking any action against them for
failure to pay assessments under the Illinois Grain Insurance
Act. It was further ordered that an escrow account be
established into which the Plaintiffs were to pay their
assessments pending disposition of this suit on the merits.
Plaintiffs now move for summary judgment on the record
before the Court.
Plaintiffs are grain warehousemen licensed under the United
States Warehouse Act (USWA). 7 U.S.C. § 241 (1982). All
Plaintiffs operate within the State of Illinois. Plaintiffs
have held federal warehouse licenses under the USWA for a
number of years prior to the enactment of the amendments to the
Illinois Grain Dealers Act and the Illinois Grain Insurance
Act. All Plaintiffs are in good standing under the federal
licenses and are bonded pursuant to the federal statute to
secure performance of their obligations as warehousemen.*fn2
In addition to being federally licensed grain warehousemen, all
Plaintiffs are grain dealers licensed under the Illinois Grain
Dealers Act. Ill.Rev.Stat. ch. 111, ¶ 301 (1985).
B. Background Legislation
To obtain a license in Illinois, a grain dealer must join
the Illinois Grain Insurance Fund by the payment of an amount
based on the percentage of the aggregate dollar amount paid by
the dealer to producers during the dealer's past fiscal year.
See Ill.Rev.Stat. ch. 111, ¶ 303 (1985); Id. ch. 114, ¶ 705.
Prior to 1985, the Illinois Grain Dealers Act did not subject
federal warehousemen to the Illinois Grain Insurance Act.
However, by Public Act 84-156, the Illinois legislature amended
§ 6 (Ill.Rev.Stat. ch. 111, ¶ 306) of the Grain Dealers Act to
If the Department [of Agriculture] finds that a
grain dealer is licensed as a grain warehouse
under the United States Warehouse Act and does
not satisfy the requirements of Section 4
[Ill.Rev.Stat. ch. 114, ¶ 704] of The Illinois
Grain Insurance Act the Director shall suspend or
revoke such license until such time as ...
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