Gilbert's Ethan Allen Gallery v. Ethan Allen, Inc.

620 N.E.2d 1349, 251 Ill. App. 3d 17, 190 Ill. Dec. 88, 1993 Ill. App. LEXIS 1356
CourtAppellate Court of Illinois
DecidedSeptember 3, 1993
Docket5-91-0746
StatusPublished
Cited by12 cases

This text of 620 N.E.2d 1349 (Gilbert's Ethan Allen Gallery v. Ethan Allen, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gilbert's Ethan Allen Gallery v. Ethan Allen, Inc., 620 N.E.2d 1349, 251 Ill. App. 3d 17, 190 Ill. Dec. 88, 1993 Ill. App. LEXIS 1356 (Ill. Ct. App. 1993).

Opinions

JUSTICE LEWIS

delivered the opinion of the court:

Defendant Ethan Allen, Inc. (Ethan Allen), appeals from a judgment of the circuit court of Madison County in favor of plaintiff, Gilbert’s Ethan Allen Gallery, on plaintiff’s claim that Ethan Allen violated the Illinois Antitrust Act (the Illinois Act) (Ill. Rev. Stat. 1985, ch. 38, par. 60 — 1 et seq.). Plaintiff cross-appeals a judgment in favor of defendant Ely & Sons, Inc. (Ely), on plaintiff’s claim that Ely violated the Illinois Act. The issues on appeal are: (1) whether the trial court applied the correct legal test in finding that Ethan Allen violated section 3(3) of the Illinois Act (Ill. Rev. Stat. 1985, ch. 38, par. 60 — 3(3)); (2) whether the trial court erred in computing damages for plaintiff; (3) whether the trial court erred in finding that Ely did not violate the Illinois Act; and (4) whether the trial court erred in refusing to order attorney fees to plaintiff. We reverse on issue (1) and affirm on issue (3). Issues (2) and (4) need not be discussed.

I

Ethan Allen is a manufacturer and distributor of furniture whose products are distributed to the consumer through a network of authorized dealers. Plaintiff was an Ethan Allen dealer from 1956 to 1972 and an exclusive Ethan Allen dealer from 1972 to 1985. Plaintiff’s store was located in Alton, but plaintiff advertised throughout the metropolitan St. Louis area and made most of its sales to residents from Missouri. Ethan Allen’s share of the metropolitan St. Louis furniture market was more than 1% but less than 2%. In 1985, Ethan Allen terminated its relationship with plaintiff and informed plaintiff that it would no longer recognize plaintiff as an authorized dealer. As a result of that termination, Ely became the sole authorized dealer of Ethan Allen furniture in the St. Louis metropolitan area. Ely has one store located in Fairview Heights, Illinois, and one in Chesterfield, Missouri. Plaintiff, meanwhile, became a competitor of Ely and Ethan Allen by becoming a Drexel furniture dealer.

Plaintiff brought this action alleging its termination was a result of a conspiracy between Ethan Allen and Ely to fix prices in violation of the Illinois Act. (Ill. Rev. Stat. 1985, ch. 38, pars. 60 — 3(2), (3).) At a bench trial, the court heard evidence that it is Ethan Allen’s practice to publish suggested retail prices, and it prefers its dealers to set their resale prices accordingly. Former Ethan Allen sales representative Jack Tripp testified that he serviced plaintiff’s account with Ethan Allen. Tripp further stated that an Ethan Allen executive told him in 1984 that plaintiff would not be an Ethan Allen dealer much longer because it was a discounter and sold furniture for less than the suggested price.

Lewis Gilbert testified that Nathan Ancell, chairman of the board of Ethan Allen, informed him that Ethan Allen strongly disapproved of plaintiff’s discounting policy. Gilbert further testified that he lost $126,000 as a result of the termination by Ethan Allen. After Ethan Allen’s termination, plaintiff became a Drexel furniture dealer. The $126,000 sum represented the cost to change the furniture displays Ethan Allen required him to maintain. He stated that the changeover required him to close down the store for a period of time and operate at a reduced level for an additional period of time, resulting in additional losses of $226,000 in 1987 and $140,000 in 1988.

At the close of evidence, the court entered judgment in favor of plaintiff on its claim against Ethan Allen and against plaintiff on its claim against Ely. The court concluded that Ethan Allen’s actions forcing plaintiff from the marketplace constituted a violation of section 3(3) of the Illinois Act (Ill. Rev. Stat. 1985, ch. 38, par. 60 — 3(3)). The court awarded plaintiff $492,000 in damages plus costs of suit, but not attorney fees.

Ethan Allen appeals the judgment against it, and plaintiff cross-appeals the judgment in favor of Ely. Plaintiff does not argue or contend on appeal that Ethan Allen violated section 3(2) of the Illinois Act, which section prohibits conspiracies to restrain trade or commerce. We reverse as to the judgment against Ethan Allen in favor of plaintiff and affirm as to the judgment against plaintiff in favor of Bly.

II

The first issue we are asked to address by Ethan Allen is whether the trial court correctly applied the law in finding that Ethan Allen violated section 3(3) of the Illinois Act, which provides that every person shall be deemed to have committed a violation of the Illinois Act if they:

“(3) Establish, maintain, use, or attempt to acquire monopoly power over any substantial part of trade or commerce of this State for the purpose of excluding competition or of controlling, fixing, or maintaining prices in such trade or commerce.” (Ill. Rev. Stat. 1985, ch. 38, par. 60-3(3).)

Section 11 of the Illinois Act provides, in pertinent part:

“When the wording of this Act is identical or similar to that of a federal antitrust law, the courts of this State shall use the construction of the federal law by the federal courts as a guide in construing this Act.” (Ill. Rev. Stat. 1985, ch. 38, par. 60— 11.)

Ethan Allen argues that the wording of section 3(3) of the Illinois Act is similar to that of section 2 of the Sherman Antitrust Act (Sherman Act) (15 U.S.C.A. §2 (West Supp. 1993)) and that the trial court should have followed Federal precedent in this case. The Federal case law addressing section 2 of the Sherman Act requires that a market-share analysis be made to determine if competition is sufficiently injured so that the monopolizing activities constitute a violation of the Illinois Act. Eastman Kodak Co. v. Image Technical Services, Inc. (1992), 504 U.S. 451, 119 L. Ed. 2d 265, 112 S. Ct. 2072; Wigod v. Chicago Mercantile Exchange (7th Cir. 1992), 981 F.2d 1510.

In the case before us, the trial court found that while there was a dearth of Illinois cases construing section 3(3) of the Illinois Act, M B L (USA) Corp. v. Diekman (1985), 137 Ill. App. 3d 238, 484 N.E.2d 371, indicated that violation of section 3(3) of the Illinois Act is a “per se” violation which makes a market-share analysis or a rule-of-reason analysis unnecessary. The trial court further noted that section 3(3) of the Illinois Act and section 2 of the Sherman Act are different. Section 2 of the Sherman Act provides:

“Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.” (15 U.S.C.A. §2 (West Supp. 1993).)

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Cite This Page — Counsel Stack

Bluebook (online)
620 N.E.2d 1349, 251 Ill. App. 3d 17, 190 Ill. Dec. 88, 1993 Ill. App. LEXIS 1356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gilberts-ethan-allen-gallery-v-ethan-allen-inc-illappct-1993.