United States District Court, Central District of Illinois, Peoria Division
June 26, 1989
HARVEY JACKSON AND ROGER JACKSON, PLAINTIFFS,
UNION NATIONAL BANK OF MACOMB, A NATIONAL BANKING ASSOCIATION, DEFENDANT.
The opinion of the court was delivered by: Mihm, District Judge.
Presently before the Court is the Motion of Defendant, Union
National Bank of Macomb (hereinafter "Union"), for summary
judgment pursuant to Rule 56(c) of the Federal Rules of Civil
Procedure. The basis of Union's Motion is that this case was
instituted after the expiration of the applicable statute of
limitations. The Court concurs and hereby GRANTS Union's
On March 31, 1989, Plaintiffs, Harvey Jackson and Roger
Jackson, filed a Complaint in this case in which they sought
damages for alleged violations of the Bank Holding Company Act
Amendments of 1970, 12 U.S.C. § 1971 et seq. Plaintiffs, who
are brothers, each owned an undivided one-half interest in a
40-acre tract of real estate. In their Complaint, the Jacksons
assert that in or around July 1981, Union advised Harvey
Jackson that, in order for him to receive renewals for two
promissory notes held by Union, Roger Jackson would have to
execute a mortgage and note to Union. The purpose of the
mortgage was to have Roger Jackson provide his one-half
interest in the real estate as security for the notes which his
brother sought to renew. Plaintiffs further allege that Union's
loan officer, Nye Bouslog, represented to them that only Harvey
Jackson's acreage would be secured and that only Harvey Jackson
would be liable on the promissory note. Harvey Jackson claims
that he would not have had his brother execute the security
documents had Harvey known that such action would encumber
Roger's undivided one-half interest in the real estate.
In September 1983, Union began liquidating Harvey Jackson's
assets in order to obtain repayment on the notes. On June 11,
1984, Harvey Jackson filed a Chapter 13 bankruptcy petition in
which he named Union as a secured creditor. Pursuant to that
petition, payments were made to Union until early 1986. The
monies that Union received from Harvey Jackson did not,
however, repay his entire debt to Union. As a result, Union
instituted foreclosure proceedings against the Jackson brothers
in the Circuit Court of McDonough County, Illinois. On December
11, 1986, that court entered a decree of foreclosure against
According to Plaintiffs, prior to December 11, 1986, they
were completely unaware of any potential personal liability
that Roger Jackson might have with respect to the documents
executed in July 1981. According to the Jacksons, Union made no
attempts prior to December 1986 to collect from Roger Jackson
any payments due and owing under the terms of the promissory
notes executed in 1981.
The applicable statute of limitations for violations of the
Bank Holding Company
Act Amendments of 1970 is found at 12 U.S.C. § 1977. That
statute states as follows:
Limitations of Actions; Suspension of Limitations
1. Subject to paragraph (2) of this section, any
action to enforce any cause of action under this
chapter shall be forever barred unless commenced
within four years after the cause of action
2. Whenever any enforcement action is instituted
by or on behalf of the United States with respect
to any matter which is or could be the subject of
a private right of action under this chapter, the
running of the statute of limitations in respect
of every private right of action arising under
this chapter and based in whole or in part on such
matter shall be suspended during the pendency of
the enforcement action so instituted and for one
year thereafter: Provided, That whenever the
running of the statute of limitations in respect of
a cause of action arising under this chapter is
suspended under this paragraph, any action to
enforce such cause of action shall be forever
barred unless commenced either within the period of
suspension or within the four year period referred
to in paragraph (1) of this section.
12 U.S.C. § 1977. There is no dispute between the parties to
this case that, because no enforcement action by or on behalf
of the United States has been instituted against Union, the
provisions of 12 U.S.C. § 1977(2) have no application in this
case. As a result, the focus of the Court's inquiry is whether
the Jacksons' filing of this lawsuit on March 31, 1989
satisfies the four year statute of limitations provided in
12 U.S.C. § 1977(1). Union argues that the 1989 filing does not
satisfy the four year limitations period and that the statute
of limitations expired in July 1985 — four years after Roger
Jackson executed the mortgage and note to Union. This Court
The United States Court of Appeals for the Seventh Circuit
has not interpreted the statute of limitations applicable to
the anti-tying provisions of the Bank Holding Company Act, but
the Fourth Circuit, in Lancianese v. Bank of Mt. Hope,
783 F.2d 467 (4th Cir. 1986), held that the four year statute of
limitation begins to run no later than the date on which a
bank's alleged violations end. According to the Lancianese
Court, the fact that the bank customers do not suffer the final
harm caused by the bank's conduct until some later time is
irrelevant to the determination of whether their claim against
the bank is time barred. Id. at 470.
Although the Seventh Circuit has not directly addressed the
statute of limitations question with respect to the anti-tying
provisions of the Bank Holding Company Act, that Court has
ruled that those provisions should be treated in a manner
similar to the anti-tying provisions of the antitrust laws. In
Exchange Nat'l Bank of Chicago v. Daniels, 768 F.2d 140 (7th
Cir. 1985), the Seventh Circuit stated:
This court has construed § 1972 as prohibiting
exclusive dealing practices — those that attempt
to prevent customers from dealing with other banks.
McCoy v. Franklin Savings Assn., 636 F.2d 172, 175
(7th Cir. 1980). It is similar to other anti-tying
laws meant to preserve competition among rival
businesses. We treat it, in other words, as the
banking equivalent of § 3 of the Clayton Act,
15 U.S.C. § 14.
Id. at 143. Accordingly, this Court will look to the Seventh
Circuit rulings on the statute of limitations governing
anti-tying cases in the context of the Clayton Act.*fn1
The statute of limitations governing anti-tying causes of
action under the Clayton Act is contained in 15 U.S.C. § 15b.
That section states as follows:
Any action to enforce any cause of action under
§§ 15, 15a, or 15c of this title shall be forever
barred unless commenced within four years after the
cause of action accrued. No cause of action barred
under existing law on the effective date of this
Act shall be revived by this Act.
15 U.S.C. § 15b. There is no question that, absent tolling for
one reason or another, the four year antitrust statute of
limitations begins to run at the time that the alleged
violation occurs. Brunswick Corp. v. Riegel Textile Corp.,
752 F.2d 261
, 268 (7th Cir. 1984). In the context of this case,
that principle would mean that the statute would begin to run
in July 1981 and expire four years later unless there is reason
to toll the limitations period.
The Jacksons seem to argue that the four year limitations
period was tolled because they were not aware of the alleged
violation until December 1986, so that the limitations period
began to run at that time. Such a result does not jibe with the
Seventh Circuit's interpretation of the antitrust laws. In
Brunswick, the Seventh Circuit rejected a construction of the
antitrust laws which would allow a tolling of the statute of
limitations until the time that the antitrust victim suffers a
loss. In that case, the Court explained that:
Exclusion from a market is a conventional form of
antitrust injury that gives rise to a claim for
damages as soon as the exclusion occurs . . . even
though, in the nature of things, the victim's
losses lie mostly in the future . . .
In some cases, . . . the plaintiff may be able to
show that his future losses were so speculative at
the time of the exclusion that a judge or jury
would not have been allowed to award damages for
those losses at that time, in which event the
plaintiff may and indeed must wait to sue. . . .
But unless special circumstances preclude, as
excessively speculative, an award of damages based
on predicated as distinct from realized losses due
to the defendant's misconduct, the statute of
limitations is not tolled simply in order to wait
and see just how well the defendant does in the
market from which he excluded the plaintiff.
Otherwise it would be tolled indefinitely in a
very large class of antitrust suits.
Id. at 271 (citations omitted).
In Conway v. Bulk Petroleum Corp., 545 F. Supp. 398 (N.D.Ill.
1982), another anti-tying case under the Clayton Act, the court
granted summary judgment in defendants' favor based on the
statute of limitations bar. The plaintiff in Conway contended
that the statute should have been tolled due to the defendants'
fraudulent concealment of their unlawful conduct, but his
position was rejected by the Court. The Court noted that the
plaintiff was aware of the objective facts underlying the
defendants' various alleged tying arrangements prior to the
expiration of the limitations period. The most that could be
said in support of the plaintiff's position was that he was not
aware of the purpose underlying the defendants' conduct until
after the four year limitations period had expired. Id. at 400.
Yet, according to the Conway Court, the plaintiff's subsequent
discovery of the defendants' purpose did
not allow an extension of the four year statutory period.
Applying the Brunswick and Conway principles to the facts of
this case, this Court finds that the Jacksons' cause of action
is time barred. As found by the court in Lancianese, the four
year statute of limitations governing anti-tying provisions of
the Bank Holding Company Act Amendments begins to run no later
than the date on which a bank's alleged violations ended. The
fact that a bank customer does not suffer injury as a result of
the alleged violation until some time later does not toll the
running of the statute of limitations. Accordingly, the statute
of limitations in this case expired four years after the day
that Union required Roger Jackson to execute the note and
mortgage in July 1981; that is, it expired in July 1985.
Plaintiffs attempt to claim that Bouslog's representations
that Roger Jackson's undivided one-half interest in the real
estate would not be placed at risk constitutes a basis for
tolling the statute of limitations.*fn2 This Court, as the
Conway Court, must reject that position. As in Conway, during
the period prior to the foreclosure proceedings, the Jacksons
were aware of the objective facts underlying Union's alleged
unlawful tying arrangements. The mere fact that the Jacksons
were unaware of Union's purpose in having Roger Jackson execute
the security documents does not amount to a fraudulent
concealment. The failure of an injured party to discover the
existence of a cause of action within the limitations period
does not toll the statute. Allis Chalmers Mfg. Co. v.
Commonwealth Edison Co., 315 F.2d 558, 562 (7th Cir. 1963). If
Union illegally tied its renewal of credit to Harvey Jackson in
a manner prohibited by the Bank Holding Company Act Amendments,
Union did so in July 1981. The mere fact that Roger Jackson did
not feel the ramifications of the claimed violation until five
and one-half years later does not excuse the Jacksons' failure
to discover their potential claim. This case is time barred,
and Union is entitled to summary judgment.
The anti-tying provisions of the Bank Holding Company Act
prohibit exclusive dealing practices. See, 12 U.S.C. § 1972(1).
If Union violated that statute at all, it did so at the time of
the transaction in July 1981, despite the fact that Roger
Jackson suffered no supposed injury from that conduct until
1986. (This Court calls Roger Jackson's injury "supposed"
because, as noted by the Exchange Nat'l Bank Court, "Section
1975 [of the Bank Holding Company Amendments] permits a treble
damages action by an injured party, but an obligation to pay
back a loan actually made is not an injury." Exchange Nat'l
Bank, 768 F.2d at 144. In other words, it is questionable
whether Roger Jackson suffered any anti-tying injury at all.
That question is not presently before the Court, though, so the
Court will not discuss it further.)
The Court finds that this case was instituted after the
expiration of the statute of limitations. Defendant's Motion
for Summary Judgment is GRANTED. The Clerk is directed to enter
final judgment for Defendant.
It is so ordered.