shareholders in Oak Park. His father, Gilbert Balin, is an
employee of Oak Park. Gilbert Balin's brother, Richard Balin, is the sole
owner of defendant C.B.B.B. Incorporated. Other than the connection
between the Balins, which the plaintiffs allege could represent a
multiple bidder, Oak Park had never sent a multiple bidder to the Cook
County Annual Tax Sale. Timothy Balin was the sole bidder representing
Oak Park on the first day of the tax sale. He bid 18% on the first
property sold in the 1996 Tax Sale.
In preparing for the 1996 Tax Sale, Timothy Balin was not optimistic
about the rates. He testified that he expected that the average rates
would be similar to those of the previous three years. There was serious
debate among the principals in Oak Park as to whether they were going to
participate in the 1996 Tax Sale in light of the low bid rates in the
previous years. Timothy Balin decided to bid on properties with small tax
Gilbert and Richard Balin divided up the responsibilities of inspecting
and evaluating the properties that were contained in the bid book that
they had ordered from the county. They considered various factors and, if
the property was deemed worthy of a bid, marked "ok" on the bind book.
Timothy Balin testified that he always started bidding at 18% at the
commencement of a Tax Sale. He further testified that he was surprised to
see that the rates did not drop. Oak Park continued to bid 18% for
properties and depended on "the auctioneer's practice of fairly
distributing the tied 18% bids amongst the various bidders."
Richard Balin is the sole shareholder of C.B.B.B., Inc. Richard Balin
had been a shareholder of Oak Park Investment, but had retired in 1993.
Neither Richard Balin nor C.B.B.B. had participated in tax sales for the
six years prior to the 1996 Annual Tax Sale. Richard Balin had never
participated on his own in real estate tax buying.
Richard provided financing by obtaining a letter of credit in the
amount of $100,000 from Bank Leumi, secured by a certificate of deposit.
He further withdrew $200,000 to $300,000 from safety deposit boxes and
obtained a loan of $550,000 from his brother. As a self described
"conservative investor", Richard Balin kept most of his money in safe
Richard Balin had previously scheduled vacations during the Tax Sale
and could not attend substantial portions of the sale. Therefore, Tamara
Balin Carter, Gilbert Balin's daughter, bid on properties for Richard
Balin. Tamara had never before attended a tax sale. While she bid for
C.B.B.B., she remained on Oak Park's payroll.
As noted above, Richard and Gilbert divided the research before the
sale. Both Oak Park and C.B.B.B. contend that the parties had no
discussions or contact related to bid rates. However, Tamara testified
that she discussed bid rates with her father and uncle before the Tax
Sale. Richard instructed Tamara to bid no lower than 5 or 6% for the
properties. When she reported to him that the bidding was at 18%, Richard
obtained the additional loan of $550,000 from his brother. C.B.B.B.
purchased a total of $1,180,566,77 in tax delinquencies at the 1996 Annual
Gilbert Balin testified that other bidders, National specifically, were
"picking on [Tamara]" and bidding down the penalty rates on properties on
which Tamara made an initial bid. Smith testified that it appeared that
National was bidding her down because National thought that Tamara was a
multiple bidder for Oak Park.
The only piece of circumstantial evidence unrelated to the relationship
the two entities is that Timothy Balin, Oak Park's bidder, bid
18% on the first property. However, he testified that he always bid 18%
at the beginning of an auction. This piece of circumstantial evidence,
standing alone, is not sufficient to meet the standards outlined above.
The relationship between Oak Park and C.B.B.B. may be sufficient to
deny summary judgment as to both of them. However, there is no evidence
which ties either Oak Park or C.B.B.B. to any of the other defendants.
There are not any plus factors which allow plaintiffs to claim that their
evidence tends to disprove the arguments which these two defendants have
put forward. Oak Park and C.B.B.B. did not meet with any of the other
defendants, they did not change their multiple bidding strategy before
the Tax Sale, and Richard Balin's statements about the reasons he decided
to enter the Tax Sale are uncontradicted.
However, plaintiffs argue that Oak Park and C.B.B.B. conspired between
themselves, but do not show or allege the anti-competitive effect that
could be the result of a conspiracy between these two relatively small
entities. It is irrelevant to this Court whether Oak Park and C.B.B.B.
discussed pricing strategies because, even if the two bidding
corporations were to be fully synchronized, they could not have affected
the overall market. Small entities can be liable for participation in a
conspiracy if the conspiracy taken as a whole can affect prices and the
overall market. Plaintiffs here have alleged such a broad conspiracy.
However, there is no direct or circumstantial evidence linking Oak Park
or C.B.B.B. to the broader conspiracy. Therefore, the actions of Oak Park
and C.B.B.B. could not have let to a resultant unreasonable restraint of
trade or injury. Denny's, 8 F.3d at 1220. We enter summary judgment in
favor of defendants Oak Park Investments, Incorporated and C.B.B.B.
Incorporated because no evidence ties their behavior to the larger
conspiracy and even if they conspired with each other, the conspiracy is
C) D.S. Tax
D.S. Tax has participated solely in the Cook County Tax Sale for the
last ten years. Dewey Suster is the president and sole shareholder of
D.S. Tax. In the 1992 and 1993 Tax Sales, D.S. filed its registration
prior to the tax sale's commencement and attended the tax sale on the
first day it began. Its participation was not profitable and Suster
reduced D.S.'s participation focusing its resources on what Suster
perceived to be more profitable business opportunities.
However, D.S. had gained profits from buying taxes in certain
geographic areas, such as Thornton and Proviso Townships. Therefore,
Suster determined that he would concentrate his resources and buying in
those areas in which D.S. had historically shown a profit. Each year from
1994 through 1996, D.S. applied for reduced amounts of letters of credit
in preparation for the Tax Sales. Before the Tax Sale began, D.S.
determined that it would purchase the same or fewer properties as it had
in 1995. D.S. utilized two individuals to bid on taxes at the 1996 Tax
The 1996 Annual Tax Sale began on January 12, 1998. D.S. registered for
the Tax Sale on January 16, 1998, and first won a property on January
26, 1998. According to statute, D.S. could not begin bidding on
properties for ten days after registering. D.S. only registered one bidder
for the 1996 Tax Sale.
D.S. did not bid on January 27, 1998, because the properties were in
areas that D.S. determined were less profitable. However, it learned that
the prevailing penalty bidding rates were simultaneous
bids of 18%. D.S.
bid at the prevailing rates, except when it had particular need for the
property being auctioned.
D.S. was a member of an entity organized to lobby on behalf of buyers
named the Taxpayers Action Committee ("TAC"). TAC was organized in 1973
as a not-for-profit corporation for the purpose of lobbying. Suster was
asked to serve as treasurer and secretary. His duties consisted of
managing the checking account, paying the bills and collecting dues. In
February of 1996, Suster concluded that the expenses associated with
participating outweighed the benefits. However, the parties dispute
exactly when D.S. actually quit TAC. D.S. alleges that it left after
1996, but plaintiffs allege that Suster continued to keep records at
least through the 1996 Annual Tax Sale in 1998.
Plaintiffs reference a Regent Properties telephone message paid which
contained a message from Farmer, a D.S. employee. Farmer testified that
the exchange was brief and limited to a single property. Suster testified
that D.S. had not bought or sold Tax Certificates from any tax bidder at
the 1996 Sale.
D.S. Tax joined the 1996 Tax Sale late. It registered on January 16,
1998. Before the sale, D.S. had reduced the amount of the letter credit
it obtained compared to the year before. One day after joining the Tax
Sale, on January 27, 1998, D.S. did not bid on any properties, even
though the taxes were selling for an 18% penalty rate, because it had
previously determined that those properties were less profitable. After
the forfeiture rule was instituted, D.S. continued to bid on properties
that met its specifications. The only piece of evidence which plaintiffs
reference that could possibly be characterized as a plus factor is D.S.'s
participation in the Taxpayer's Action Committee. This factor, in absence
of any other "plus factor" is not sufficient to tend to disprove D.S.'s
claim of independent action.
D.S. is a clear example of a tax buyer following the leader. It entered
the Tax Sale at a point in which bidding 18% was already an ingrained
course of behavior. It followed the market. There is no evidence that
D.S. was involved in any conspiracy activity in anticipation of the Tax
Sale. The fact that D.S. had lowered the amount of its letter of credit
together with the fact that D.S. entered the sale late proves that no
reasonable jury could find that D.S. participated in a conspiracy in
violation of the Sherman Antitrust Act. Therefore, we grant D.S.'s motion
for summary judgment and enter judgment in favor of D.S. Tax.
D) First Financial
Marshall Atlas and Richard Durra are the sole shareholders of First
Financial. Atlas is the president. In order to prepare for the Tax Sale,
First Financial rented the tapes, produced by Cook County, of tax liens
to be auctioned. It hired Bill Dwyer, a computer programmer, to produce a
program which reflected the name, index number, volume, assessed
violation, total tax due, and the amount of the tax for each property.
The information was divided into about 30 books, divided by township, and
Atlas studied the information. Atlas highlighted every index number that
he wanted to bid on at the sale.
Atlas determined the tax rate to bid by considering the type of
property, the location of the property, the appearance of the property,
whether the owner had paid half of a tax installment, whether it was
occupied, whether it was generating income, whether it was mortgaged, the
quality of the neighborhood, the presence of environmental problems, the
presence of housing violations, the insurability of the property,
impairments on title, and the prevailing bid rate. Atlas would also
consider First Financial's cost of money, inventory of properties, lines
of credit, recent profits and loss experience, and the number of
properties it had purchased at that Tax Sale. Atlas would, in person,
inspect properties with liens larger that Ten Thousand Dollars
Atlas was one of few bidders who bid on properties for which only a
small balance was due. However, he virtually never bid on marginal
properties, special assessments, gas stations, or land, unless he had the
opportunity to investigate further. He also testified that, prior to the
1996 Tax Sale, he decided that First Financial would not bid on items
under $100,000 if the bidding was at zero percent.
First Financial only used two individuals to bid on properties in the
1996 Annual Tax Sale, Atlas and Ron Ohr. Atlas testified that he did not
share any information with other tax buyers who were planning to attend
the 1996 Tax Sale. He also testified that he had no expectation that the
market would be any different from the previous year. Atlas testified
that he began to bid 18% on most properties because the prevailing rates
were around 18%. First Financial bought a majority of its properties at
18%, but it also bought other properties between 1% and 18%. First
Financial made purchases totaling $3,500,220.87 at the 1996 Tax Sale.
First Financial is a member of a lobbying organization called the
Downstate Tax Buyers Group. Meetings occurred twice a year and Atlas
attended unless there was a conflict with a tax auction in Cook County.
The circumstantial evidence specific to First Financial is that they
bid 18% on the first property, participated in the Downstate Tax Buyers
Association, and that Atlas and Durra, the two principals, socially
interacted with other tax buyers. The fact that First Financial engaged
in social informal communication and joined a lobbying group is merely
some evidence that they had the opportunity to conspire, it is not a plus
factor. Market Force. Inc., 906 F.2d at 1172.
The first bid at 18% is more significant. It suggests that First
Financial made a pre-Tax Sale decision to bid at 18%. First Financial
cannot argue that it was merely following the leader because it was a
leader. The problem with relying only on this piece of evidence is that
neither side presented any evidence detailing the first bid in previous
Tax Sales. Therefore, we cannot know with certainty whether an initial
bid at 18% is a departure from normal procedure.
Given the strength of the statistical evidence and the fact that First
Financial was an initial bidder, we find that plaintiffs have presented
sufficient evidence which tends to discredit the idea that First
Financial was independently operating on its own business decisions.
Therefore, we deny First Financial's motion for summary judgment.
E) Midwest and David and Bonnie Gray
David Gray is the president of Midwest. Midwest began bringing multiple
bidders at the 1994 Annual Tax Sale and also brought multiple bidders to
the 1995 Annual Tax Sale. Several months before the start of the 1996 Tax
Sale, Gray approached LaSalle Bank with a request to increase Midwest's
funding from $12 million to $16 million.
David Gray testified that he prepared to have multiple bidders
available for the 1996 Annual Tax Sale, but decided that he would use
them only if other tax buyers also used multiple bidders. Gray testified
that he believed that tax buyers who had been using multiple bidders for
the last three years would be unable or unwilling
to continue using more
than one bidder. He testified, based on his almost forty years of
experience, that a multiple bidder strategy could only be continued for a
period of three to four years.
Gray testified that he had his multiple bidders obtain seat assignments
on the first morning of the Tax Sale, but sent them into another room.
When the Tax Sale began and he only saw 15-20 bidders, he instructed his
primary bidder to start the bidding at 18%, take it slow and see what
developed. Midwest won the 11th property at 3% and successfully won 25
properties at rates below 18% on the first day of the Tax Sale. Gray
testified that Midwest was not engaged in any agreement or conspiracy to
fix the bidding of the 1996 Tax Sale. Gray further testified that he
probably would have been willing to buy all of the properties offered at
15% and was prepared to bid down to 0% on some of the properties.
Midwest made a pre-Tax Sale decision to only use multiple bidders if
other tax buyers brought multiple bidders to the Tax Sale. As noted
above, this is plaintiffs' strongest argument. Midwest argues that they
"lined up" multiple bidders so that they would be available and obtained
multiple seating assignments for those bidders. Therefore, plaintiffs'
argument is not as strong as it would be had Midwest not actually brought
the multiple bidders to the Tax Sale, but plaintiffs argue that Midwest,
and other tax buyers, only brought multiple bidders in order to threaten
retaliation in case a tax buyer defected from the conspiracy.
David Gray testified that he made the decision regarding multiple
bidders before the commencement of the sale. He testified that, in his
business judgment, tax buyers could not maintain a multiple bidder
strategy for more than three or four years in a row. Gray also testified
that he sent his multiple bidders out of the auction room before the
beginning of the Tax Sale. Finally, Midwest has admitted that its bidder
participated in an effort to bid down properties upon which Noble,
National's multiple bidder, submitted bids. Midwest claims that punishing
a multiple bidder is a legal, competitive response to National using a
multiple bidder. That is correct, but Midwest seems to be arguing that a
classic prisoner's dilemma scenario was created at the 1996 Tax Sale
after years of accelerating defections. Plaintiffs' position, with which
we agree, is that the speed by which all the bidders changed from a
highly competitive posture to a highly cooperative posture is difficult
to reconcile with the idea of independent conduct. The fact that Midwest
made the decision not to use multiple bidders before the beginning of the
Tax Sale tends to disprove that it acted independently. Therefore, we
deny Midwest's motion for summary judgment.
F) National Indemnity and Noble Tax
National was created, by Jennings Realty, to purchase delinquent real
estate taxes in 1970. National only buys taxes in Illinois. National
states that it bids based on the dynamics of the tax sale, the judgment
of its principals, the results of a search of the Tax Sale history of the
property, field inspections, the location of the property, and its
National began using multiple bidders in the 1992 Annual Tax Sale,
which took place in 1994. National brought three extra bidders to the
1992 Tax Sale and, at later sales, increased the number to five and then
ten multiple bidders. National gave its multiple bidders a list of
properties on which they were instructed to bid zero. National only used
multiple bidders to raise volume on residential and small balance
Howard Berland testified that National was unhappy with the result of
zero percent because of the low rates of return. Berland
testified that he and Warren Peters decided not to use multiple bidders
at the 1996 Tax Sale, but wanted to have some ready for use. Therefore,
National decided, before the commencement of the Tax Sale, to use only a
single bidder, Mary Cruz. However, National registered 21 bidders for the
1996 Tax Sale. Berland further testified that National assumed that other
tax buyers were experiencing the same problems and would refrain from
using multiple tax bidders at the 1996 Annual Tax Sale.
In prior years, Berland had instructed his bidder, Cruz, to attempt to
get a high volume of properties. However, before the 1996 Tax Sale he
informed Cruz that she should attempt to get high rates. She understood
his instruction sheet to mean that she should not bid lower than four
percent. Cruz bid 18% from the beginning because she wanted a high rate
On February 23, 1998, National sent in a multiple bidder, Scott Mondi,
to bid under the name Noble Tax Investors. Mondi only bid between
February 23 through February 26 because he was unable to get high rates.
Other bidders would bid down the penalty rate if Mondi was bidding on a
National made a pre-Tax Sale decision not to use multiple bidders. It
registered 21 bidders for the 1996 Tax Sale, but only brought one
multiple bidder to the first day of the sale. Berland testified that he
and Peters decided not to use multiple bidders because that strategy had
resulted in low rates of return. As we have previously noted, a pre-Tax
Sale decision to reduce the number of bidders is plaintiffs' strongest
piece of circumstantial evidence. Standing alone it is sufficient to tend
to disprove the fact that defendants acted individually.
In addition, Cruz, National's sole bidder, began bidding exclusively at
18%. Therefore, National cannot claim to merely have followed the
leader. National was one of the buyers responsible for initiating the
trend. Taken together, the reduction of multiple bidders and the initial
and continued bids at 18% are sufficient for plaintiffs to withstand
summary judgment with respect to National.
National makes the argument that its use of Mondi as a multiple
bidder, under the name Noble Tax, on February 23, 1998, proves that it
was not involved in the conspiracy. Other bidders bid down the penalty
rate on all properties which Mondi attempted to bid, and therefore, Mondi
only bid through February 26. As we noted at the hearing on February 8,
2001, these events are just as consistent with the idea that National was
attempting to gain an upper hand and maximize its own profit even after
entering into a conspiracy. The fact that the repercussion was so swift
tends to show that a system was in place to immediately punish defectors
from the conspiracy.
G) Phoenix Bond
Phoenix Bond began preparing for the 1996 Tax Sale by obtaining the
computer tape itemizing the properties for sale. It hired an independent
computer consultant to produce appraisal sheets for certain properties
selected by Phoenix Bond. Phoenix inspected some of the properties and
did abbreviated title work. In most instances Phoenix did not set a
minimum bidding rate.
At the 1996 Tax Sale, Andrew Marks was Phoenix Bond's principal
bidder. The parties dispute whether Phoenix Bond had ever hired multiple
bidders. Phoenix alleges that it had used multiple bidders in the past,
but failed to cite to any testimony establishing that it had hired anyone
other than Marks and Mira Kovacevic to bid. Phoenix alleges, also without
testimony, that it brought multiple bidders to the 1996 Tax
sale. After Marks saw National Indemnity, another bidder, arrive with
only one tax buyer, Marks testified that he decided to forego the option
of using multiple bidders.
At the beginning of the Tax Sale, Marks refrained from bidding, at
least for the first five properties sold, to get a sense of the market.
Phoenix Bond then purchased its first property at 18%. Shortly
thereafter, Marks and Prosen, of Q.T.S., had the discussion in which
Marks threatened to bring multiple bidders to the sale in response to
Prosen's use of multiple bidders.
Phoenix Bond purchased 1,501 items at the 1996 Annual Tax Sale. The
principals testified that they never met with, wrote to, or spoke with any
other tax buyers regarding rates or participate in any agreement
concerning the 1996 Annual Tax Sale.
Phoenix Bond claims that it arrived at the Tax sale with the same
number of multiple bidders as it had brought the year before, but failed
to cite to any testimony establishing that it brought anyone other than
Andrew Marks and Mira Kovacevic. Andrew Marks, Phoenix's lead bidder,
testified that he noticed that National had not brought multiple bidders
to the Tax Sale and decided not to use multiple bidders. Marks also
testified that he did not bid on the first few items offered at the Tax
Sale, but Ohr testified that Phoenix was among the bidders who bid 18% at
the beginning of the Tax Sale. Whether Phoenix bid 18% to start the sale
is a disputed material fact precluding summary judgment.
The strongest piece of circumstantial evidence which plaintiffs have
brought against Phoenix involves Marks' statement to Prosen of Q.T.S.
Q.T.S. brought and used multiple bidders at the 1996 Tax Sale. After one
of the multiple bidders won a property, Marks turned to Prosen and said
"[w]ell, we can bring as many bidders as we want to a sale, too, and if
you keep them here, we will." Phoenix argues that Marks, using the
ambiguous pronoun "we", was referring to Phoenix, a family owned
business. We agree that the term "we" in context is ambiguous and,
standing alone, does not tend to disprove defendant's position that it
acted independently. However, coupled with the dispute as to whether
Phoenix initially bid 18% and the disputes about the number of multiple
bidders and the way that they were dismissed, a reasonable jury could
find for plaintiffs if it drew all reasonable and justifiable inferences
in plaintiffs' favor. Therefore, we deny Phoenix Bond's motion for
Regent began operations in 1982 and participated in the 1980 Annual Tax
Sale held in 1982. Regent has never purchased delinquent property taxes
in tax sales outside of the Chicago metropolitan area. The three
principals of Regent are Milford Ardell, Allen Kaplan and Fred Shandling.
Regent employs Steve Deely to assist in preparation for the Tax Sales.
Deely extensively evaluates the properties offered for sale to determine
on which properties Regent should bid. Since 1988, Deely has been
Regent's principal bidder.
Kaplan testified that he and his partners noticed that other
businesses, which the principals were involved in, were proving to be
more profitable and less administratively burdensome. Therefore, in
preparation for the 1996 Tax Sale, Kaplan and Ardell allege that they
decided to reduce Regent's level of participation in the Tax Sale. Regent
registered fewer multiple bidders for the 1996 Tax Sale then it had for
the 1994 and 1995 Annual Tax Sales. At the 1995 Tax Sale, Regent sent
bidders, but Regent only sent three bidders to the 1996 Tax Sale.
Kaplan, Ardell and Deely all testified that they believed that the
previous four years of near zero percent penalty rate bidding may have
adversely affected their competitors. Kaplan and Ardell told Deely that
they did not want Regent to have a high level of participation in the
1996 Tax Sale if the rates continued to be low.
Deely arrived, on the first day of the 1996 Tax Sale, with two multiple
bidders. However, he instructed them not to bid unless they received
further instructions from him. The parties dispute whether Deely bid on
the first item offered at the Tax Sale. Deely testified that he noticed
that others were bidding at 18% and that other companies did not bring
multiple bidders to the sale. Deely testified that he began bidding at
18% because he felt that 18% was the prevailing rate and that he did not
use multiple bidders because other tax buyers were not using them.
Deely, Kaplan, Ardell and Shandling all denied that they had agreed with
any other buyer to fix the bidding rates at the 1996 Tax Sale.
Plaintiffs have come forward with three pieces of circumstantial
evidence. Regent, prior to the sale, registered fewer multiple bidders
for the 1996 Tax Sale than the 1995 Tax Sale. Regent sent three bidders
to the 1996 Tax Sale, but determined that only Steve Deely would bid,
unless other buyers were using multiple bidders. The parties dispute
whether Regent bid 18% on the first property. Finally, Kaplan and
Ardell, the two Regent principals, met, for lunch, with a representative
of Capital Asset six days before the commencement of the sale. Taken
together, this evidence of pre-Tax Sale conduct is sufficient to tend to
disprove that Regent pursued a follow the leader strategy independent of
involvement in a conspiracy. Therefore, we deny Regent's motion for
II. Plaintiffs' Unrelated Allegations
Plaintiffs make several arguments in favor of their motion for summary
judgment which have no real connection to whether the defendants engaged
in a conspiracy to fix the penalty rates at the 1996 Tax Sale. Plaintiffs
make allegations of individual instances of false and pretextual
discovery responses, the credibility of individual witness testimony
based on allegations of prior convictions, and several allegations
concerning the alleged destruction of evidence. At best, these
allegations involve the amount of weight we are to grant to evidence.
Weighing evidence is the province of the jury and we will not entertain
arguments regarding the weight of evidence while analyzing a motion for
After an extensive analysis of the depositions, briefs and oral
argument transcript, we grant in part and deny in part defendants'
motions for summary judgment. We grant the individual motions for summary
judgment brought by D.S. Tax Associates, Ltd. [209-1], Oak Park
Investments, Inc. [229-1] and C.B.B.B., Inc. [228-1] and enter judgment
in favor of D.S. Tax, Oak Park Investments and C.B.B.B. We deny all other
motions for summary judgment including the motions brought by: certain
defendants jointly [242-1]; Capital Asset, S.I. Securities and Barrett
Rochman [231-1]; First Financial Funding Co. [235-1]; Midwest Real Estate
Investment Co., David Gray and Bonnie Gray [238-1]; National Indemnity
Corp. and Noble Tax Investors, Inc. [224-1], Phoenix Bond & Indemnity
Co. [226-1]; and Regent Properties, Milford Ardell, Allen Kaplan and Fred
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