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09/29/94 GILBERT'S ETHAN ALLEN GALLERY v. ETHAN

September 29, 1994

GILBERT'S ETHAN ALLEN GALLERY, APPELLANT,
v.
ETHAN ALLEN, INC., ET AL., APPELLEES.



Miller

The opinion of the court was delivered by: Miller

JUSTICE MILLER delivered the opinion of the court:

Defendant Ethan Allen, Inc. (Ethan Allen), is a manufacturer and distributor of furniture. Defendant Bly & Sons, Inc. (Bly & Sons), and plaintiff Gilbert's Ethan Allen Gallery are furniture dealers.

Plaintiff filed a complaint in the circuit court of Madison County alleging that defendants violated the Illinois Antitrust Act (the Illinois Act) (Ill. Rev. Stat. 1985, ch. 38, par. 60-1 et seq.). The trial court entered judgment against plaintiff and in favor of Bly & Sons. The trial court, however, found that Ethan Allen had violated section 3(3) of the Illinois Act (Ill. Rev. Stat. 1985, ch. 38, par. 60-3(3)), and entered judgment in favor of plaintiff and against Ethan Allen in the sum of $492,000, plus costs.

Ethan Allen filed a timely notice of appeal. Plaintiff cross-appealed the trial court's judgment in favor of Bly & Sons. Plaintiff further claimed on appeal that the trial court erred in failing to award it attorney fees. The appellate court affirmed the trial court's judgment in favor of Bly & Sons, but reversed the trial court's judgment against Ethan Allen, Inc. (251 Ill. App. 3d 17.) The appellate court did not address the question whether the trial court should have awarded plaintiff attorney fees. We granted plaintiff's petition for leave to appeal to this court. 145 Ill. 2d R. 315.

FACTS

Defendant Ethan Allen distributes its furniture solely through the use of authorized dealers. From 1956 to 1985, plaintiff was an authorized Ethan Allen dealer. Plaintiff operated a store in Alton, Illinois, and advertised throughout the metropolitan St. Louis area. Defendant Bly & Sons operated two Ethan Allen stores, one in Fairview Heights, Illinois, and one in Chesterfield, Missouri. Bly & Sons also advertised throughout the metropolitan St. Louis area. Plaintiff and Bly & Sons competed against each other.

Ethan Allen publishes suggested retail prices for their furniture. Plaintiff alleges that there is an unspoken rule that dealers are not to deviate from these prices. Plaintiff periodically sold Ethan Allen furniture at a discount.

Lewis Gilbert, plaintiff's owner, testified that Nathan Ancell, Ethan Allen's chairman of the board, repeatedly complained about plaintiff's practice of discounting Ethan Allen furniture. In 1985, Ethan Allen terminated plaintiff's dealership. Plaintiff claims that Ethan Allen terminated its dealership in retaliation for plaintiff's discounting practice.

The trial court found that Ethan Allen terminated plaintiff to control the pricing of Ethan Allen products, and that such conduct violated section 3(3) of the Illinois Act. The trial court held that an apparent violation of section 3(3) was a per se violation of the Illinois Act. The appellate court reversed and remanded the cause for a new trial, finding that a market share analysis must be performed prior to finding a violation of section 3(3). A market share analysis consists of analyzing the relevant market to determine whether a defendant possesses sufficient monopoly power to injure competition. The appellate court believed that the ability of a defendant to injure competition was a necessary element of a violation of section 3(3) of the Illinois Act.

Plaintiff raises two issues for our review. First, plaintiff claims that an apparent violation of section 3(3) is a per se violation of the Illinois Act without showing that the defendant had the ability to injure competition. Plaintiff next claims that the trial court erred in failing to award attorney fees upon finding that defendant had violated section 3(3) of the Illinois Act.

Discussion

Ethan Allen does not contest the trial court's finding that it forced plaintiff from the marketplace to control the pricing of Ethan Allen products. The issue we must address is whether such conduct violates the ...


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