Appeal from the Circuit Court of Cook County. Honorable John E. Morrissey, Judge Presiding.
The opinion of the court was delivered by: Presiding Justice Karnezis
Plaintiffs, Chicago area consumers who purchased milk at retail from defendants Jewel Food Stores, Inc. (Jewel) and Dominick's Finer Foods, Inc. (Dominick's), for the period from August 23, 1996, to August 23, 2000, filed a class action against defendants alleging that defendants conspired to fix, raise and maintain the price of milk in the Chicago area in violation of section 3(1)(a) of the Illinois Antitrust Act (740 ILCS 10/3(1)(a) (West 2002)) (the Antitrust Act or the Act). Plaintiffs appeal from the trial court's grant of defendants' motion for judgment at the close of plaintiffs' case pursuant to section 2-1110 of the Illinois Code of Civil Procedure (735 ILCS 5/2-1110 (West 2002)) (the Code). Plaintiffs argue that the court incorrectly applied section 2-1110 by (1) requiring plaintiffs to prove their case by clear and convincing evidence; (2) failing to find that plaintiffs proved a prima facie case; (3) requiring plaintiffs to present evidence of a manifest agreement and illicit motive in order to prove the price-fixing conspiracy; and (4) excluding all evidence regarding defendants' milk prices after the date plaintiffs commenced their action. We affirm.
Defendants are the two dominant grocery store chains in the nine-county Chicago metropolitan area and have been for a number of years. They maintain a relatively stable share of the retail grocery market, with Jewel's market share approximating 42% and Dominick's 26%. The remaining 32% of the market is split among other grocery store chains, with no single chain having more than 6% of the market. On a store- by-store basis, Dominick's identified Jewel as its chief competitor for 90% of its stores.
All of the grocery stores sell milk, as do numerous other venues such as convenience stores and gasoline stations. Milk is a homogeneous product. It is available in various fat contents, whole, 2%, 1% and skim, but the milk within each fat category is the same, regardless of who is selling it or the brand under which it is sold. Although defendants both sell "premium" and "secondary" brands of milk, there is no difference between the premium and secondary brand milk. Only the brand names differ. Jewel's two product lines are Dean's and Fieldcrest and Dominick's are Dominick's and Nancy Martin.
Although the wholesale prices for the different types of milk differ depending on the fat content, defendants both charge the same retail price for each type of milk within a brand, setting the price based on the cost of the higher-priced whole milk rather than using an average cost of the four milk types. As part of Dominick's milk pricing strategy, it exactly matches the price Jewel charges for premium brand milk as soon as possible after Jewel changes its milk price. Dominick's performs daily checks of Jewel stores and advertisements in order to keep abreast of Jewel's prices.
Dominick's also matches Jewel's price for secondary brand milk in those Chicago markets where Jewel is its major competitor. Defendants each price their secondary brand at 10 cents per gallon less than the premium brand in those markets, no matter the price charged for the premium brand. Therefore, each time Jewel changes its premium brand prices, its secondary brand prices will adjust similarly. Dominick's then follows Jewel's lead and prices its secondary brand accordingly. In neighborhoods where Jewel and Dominick's are not each other's nearest competitor, they each set their secondary brand milk prices based on the prices set by other competitors. Defendants' prices in those neighborhoods are generally lower than prices charged in markets where each is the other's closest competitor. For approximately 90% of its stores, Jewel is Dominick's closest competitor and in those markets, Dominick's matches Jewel's base price for both milk brands.
In 2000, Jewel's premium brand milk was priced at $2.38 per gallon in Milwaukee while the identical milk was sold in Chicago for $3.69 per gallon. When the wholesale price of milk decreased by 40 cents per gallon in December 1999, defendants did not decrease the prices they charged until after the instant suit was filed in late 2000. In markets where Jewel and Dominick's were each other's closest competition, Jewel's gross profit margin on its milk products exceeded 40% while Dominick's exceeded 50%, except when it ran its $1 off promotions at which time its profit margin still exceeded 40%.
On August 23, 2000, considering defendants' milk prices exorbitant given the market and the wholesale cost of milk, plaintiffs filed a class action against defendants alleging that defendants worked together to maintain an artificially high price for milk in the Chicagoland area in violation of section 3(1)(a) of the Antitrust Act. Following class certification, plaintiffs presented their case, at the close of which defendants moved for a finding in their favor pursuant to section 2-1110 of the Code and dismissal of the action. The court granted defendants' motion and plaintiffs appeal.
The court granted defendants' motion for a finding in their favor, filed at the conclusion of plaintiffs' case in chief pursuant to section 2-1110 of the Code, and dismissed the case. Section 2-1110 provides that in cases tried, as here, without a jury, a defendant may, at the close of the plaintiff's case, move for a finding or judgment in his or her favor. 735 ILCS 5/2- 1110 (West 2002); People ex rel. Sherman v. Cryns, 203 Ill. 2d 264, 275, 786 N.E.2d 139, 148 (2003). Plaintiffs argue that we should review the court's decision de novo while defendants argue that we should review it under the manifest weight of the evidence standard. For the reasons that follow, we agree with defendants and must, therefore, determine whether the court's decision was against the manifest weight of the evidence.
In ruling on a section 2-1110 motion, a court must engage in a two-prong analysis. People ex rel. Sherman, 203 Ill. 2d at 275, 786 N.E.2d at 148. The court must first determine, as a matter of law, whether the plaintiff has presented a prima facie case. People ex rel. Sherman, 203 Ill. 2d at 275, 786 N.E.2d at 148. A prima facie case is established by presenting "at least 'some evidence on every element essential to [the plaintiff's underlying] cause of action.' " People ex rel. Sherman, 203 Ill. 2d at 275, 786 N.E.2d at 148, quoting Kokinis v. Kotrich, 81 Ill. 2d 151, 154, 407 N.E.2d 43 (1980). Should the plaintiff fail to meet this burden, the court must grant the motion and enter judgment in the defendant's favor, dismissing the action. 735 ILCS 5/2-1110 (West 2002); People ex rel. Sherman, 203 Ill. 2d at 275, 786 N.E.2d at 148. Because a court's determination that a plaintiff failed to present a prima facie case is a question of law, we review such a ruling de novo. People ex rel. Sherman, 203 Ill. 2d at 275, 786 N.E.2d at 148. If the court determines that the plaintiff has established a prima facie case, the court then moves to the second prong of the inquiry in which, as the finder of fact, it must consider the totality of the evidence presented, including any evidence that is favorable to the defendant. People ex rel. Sherman, 203 Ill. 2d at 275-76, 786 N.E.2d at 149. Pursuant to section 2-1110, the court does not view the evidence in the light most favorable to the plaintiff but rather must "weigh the evidence, considering the credibility of the witnesses and the weight and quality of the evidence" (735 ILCS 5/2-1110 (West 2000)) and draw reasonable inferences therefrom. People ex rel. Sherman, 203 Ill. 2d at 276, 786 N.E.2d at 149. Since the weighing process involves consideration of evidence presented by the defendant as well as by the plaintiff, the process "may result in the negation of some of the evidence presented by the plaintiff." People ex rel. Sherman, 203 Ill. 2d at 276, 786 N.E.2d at 149. After weighing the quality of all of the evidence presented by both parties, "the court should determine, applying the standard of proof required for the underlying cause, whether sufficient evidence remains to establish the plaintiff's prima facie case." People ex rel. Sherman, 203 Ill. 2d at 276, 786 N.E.2d at 149. If the court finds that the plaintiff failed to present sufficient evidence to establish its prima facie case, the court should grant the defendant's motion and enter a judgment dismissing the action. People ex rel. Sherman, 203 Ill. 2d at 276, 786 N.E.2d at 149. We will not reverse such a ruling unless it is contrary to the manifest weight of the evidence. People ex rel. Sherman, 203 Ill. 2d at 276, 786 N.E.2d at 149.
The court's order stated that the court "reviewed the evidence, considering the credibility of the witnesses and the weight and quality of the evidence" and stated the court's findings as to what the "credible evidence" showed. The court determined that there were no facts regarding agreements, handshakes or conversations between defendants about the price of milk or other commodities during the class period and, therefore, no direct evidence of a conspiracy. The court then applied the clear and convincing standard of proof and determined that, although there was "some evidence" of parallel pricing, there was no additional evidence to support an inference that defendants conspired to fix the price of milk. The court found "no adequate facts demonstrating conspiracy" and held for defendants on their section 2-1110 motion. Under a section 2-1110 analysis, the credibility of witnesses, weight and quality of the evidence and underlying evidentiary standard are not considered unless the second prong of the analysis is reached. Since the court here did reach the second prong of the analysis, it had found that plaintiffs satisfied the first prong. Only after then considering all of the evidence under the second prong did the court find that the evidence was insufficient to sustain plaintiffs' case. Accordingly, given the court's weighing of the evidence, we consider the court's second-prong finding in favor of defendants under the manifest weight of the evidence standard of review. See People ex rel. Scott v. Convenient Food Mart, Inc., 21 Ill. App. 3d 97, 110, 315 N.E.2d 124, 135 (1974).
Underlying Standard of Proof
Plaintiffs argue that the trial court erred in applying the clear and convincing standard of proof. Plaintiffs charged defendants with horizontal price-fixing, conspiring to fix the price of milk in violation of section 3(1)(a) of the Illinois Antitrust Act. Therefore, in ruling on defendants' section 2-1110 motion, the trial court should have (1) determined if plaintiffs offered evidence so as to establish a prima facie case of horizontal price-fixing and, if so, then (2) weighed the evidence under the salient standard of proof to determine whether a prima facie case still exists. Greenwald v. Spring Hill Ford, Inc., 173 Ill. App. 3d 857, 860, 527 N.E.2d 1095, 1097 (1988). Generally, in ruling on a section 2-1110 motion, such evidence must prove plaintiffs' case by a preponderance of the ...