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91_HB0152eng
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1 AN ACT in relation to beverage distribution.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 ARTICLE 5
5 ILLINOIS WINE AND SPIRITS INDUSTRY
6 FAIR DEALING ACT OF 1999
7 Section 5-1. Short title. This Article may be cited as
8 the Illinois Wine and Spirits Industry Fair Dealing Act of
9 1999. All references in this Article 5 to this Act mean the
10 Illinois Wine and Spirits Industry Fair Dealing Act of 1999.
11 Section 5-5. Definitions. As used in this Act:
12 "Commission" means the Illinois Liquor Control
13 Commission.
14 "Distributorship" means a business relationship, either
15 express or implied, whether oral or written, between a
16 supplier of wine or spirits (other than (i) an Illinois
17 winery or (ii) a winery that has annual case sales in the
18 State of Illinois less than or equal to 10,000 cases per
19 year) for resale and a distributor of such products in which
20 the distributor is given the right to sell a designated
21 product or products, in a generally defined geographic area,
22 in exchange for an express or implied promise to market the
23 product or products. A registration under the Liquor Control
24 Act of 1934 as amended is a distributorship.
25 "Supplier" means a person who is a grantor of a wine or
26 liquor distributorship in this State (other than (i) an
27 Illinois winery or (ii) a winery that has annual case sales
28 in the State of Illinois less than or equal to 10,000 cases
29 per year).
30 "Distributor" means a person who is a grantee of a wine
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1 or liquor distributorship in this State.
2 "Agreement" means any contract, agreement, course of
3 dealing, or arrangement, express or implied, whether oral or
4 written, for a definite or indefinite period between a
5 supplier (other than (i) an Illinois winery or (ii) a winery
6 that has annual case sales in the State of Illinois less than
7 or equal to 10,000 cases per year, and a distributor
8 pursuant to which a distributor has been granted a
9 distributorship).
10 "Good cause" means a failure by a distributor to comply
11 with essential and reasonable requirements imposed upon the
12 distributor by the supplier or bad faith in the performance
13 of the distributorship agreement. The requirements may not
14 be discriminating either by their terms or in the methods or
15 effects of enforcement as compared with requirements imposed
16 on other similarly situated distributors by the supplier.
17 The requirements may not be inconsistent with this Act or in
18 violation of any law or regulation.
19 "Wine and liquor" means spirituous liquor or wine
20 containing alcohol in excess of 10 percent by weight, but not
21 including beer and other malt beverages.
22 "Person" means a natural person, partnership, joint
23 venture, corporation, or other entity, and includes heirs,
24 assigns, successors, personal representatives, and guardians.
25 "Illinois winery" means a winery located in Illinois.
26 Section 5-10. Legislative declaration; purposes and
27 construction.
28 (a) The General Assembly makes the following findings
29 and declarations:
30 (i) Pursuant to the 21st Amendment of the
31 Constitution of the United States, the General Assembly
32 has enacted the Liquor Control Act of 1934, which
33 establishes a three-tier system of distribution of wine
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1 and spirits to the public.
2 (ii) The three-tier system of distribution was
3 established, among other things, to prevent suppliers
4 from controlling pricing and distribution in a manner
5 that harms the interests of citizens of the State of
6 Illinois. Manufacturers have now proposed attacks on the
7 three-tier system as well as on the provision in the
8 Illinois Vehicle Code setting the limit for intoxication
9 at 0.08.
10 (iii) This Act is enacted pursuant to authority of
11 the State of Illinois and under the provisions of the
12 21st Amendment to the United States Constitution to
13 promote the public's interest in fair, efficient, and
14 competitive distribution of wine and liquor products.
15 (b) This Act shall be construed and applied to promote
16 its underlying remedial purposes and policies.
17 (c) The provisions of this Act are of a public order and
18 therefore the rights determined by those provisions cannot be
19 waived. Any contract or agreement purporting to do so is
20 void and unenforceable to that extent.
21 (d) This Act shall govern all relations between
22 distributors and suppliers to the full extent consistent with
23 the constitutions of this State and of the United States.
24 Accordingly, Section 5-35, which clarifies existing rights
25 and obligations and establishes remedial provisions, applies
26 to all agreements between a distributor and a supplier (other
27 than agreements with an Illinois winery or a winery that has
28 annual case sales in the State of Illinois less than or equal
29 to 10,000 cases per year) whether those agreements were
30 entered into before or after the effective date of this Act.
31 Sections 5-15 through 5-30 of this Act shall govern all
32 agreements between a distributor and a supplier (other than
33 agreements with an Illinois winery or a winery that has
34 annual case sales in the State of Illinois less than or equal
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1 to 10,000 cases per year), entered into after the effective
2 date of this Act, including any renewal of an agreement in
3 existence on or before the effective date of this Act.
4 Renewal of an agreement with a designated term or duration
5 shall mean (i) establishment of a new term, (ii) extension of
6 the agreement on any other basis, or (iii) shipment of wine
7 or spirits to the distributor after the expiration of the
8 designated term or duration. Renewal of an agreement in
9 place on a month to month, year to year, or other periodic
10 basis shall mean (i) continuation of the distributorship into
11 the next month, year, or other period, (ii) extension of the
12 distributorship on any other basis, or (iii) shipment of wine
13 or spirits to a distributor after the expiration of the month
14 or other periodic basis designated as the duration of the
15 distributorship in the agreement. Renewal of an agreement
16 without a designated term or duration shall mean shipment of
17 wine or spirits to a distributor after the effective date.
18 (e) In accordance with Section 1.31 of the Statute on
19 Statutes, the provisions of this Act are severable. If any
20 provision or interpretation of this Act, or the application
21 of such interpretation or provision to any distributorship,
22 is held invalid, the application of the Act to persons or
23 circumstances other than those as to which it is held invalid
24 shall not be affected thereby.
25 Section 5-15. Cancellation and alteration of
26 distributorships.
27 (a) No supplier may cancel, fail to renew, otherwise
28 terminate, or alter on a discriminatory basis an agreement
29 unless the party intending that action has good cause for the
30 cancellation, failure to renew, termination, or alteration
31 and, in any case in which prior notification is required
32 under Section 5-20, the party intending to act has furnished
33 the prior notification and the affected party has not
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1 eliminated the reasons specified in the notification for
2 cancellation, failure to renew, or termination within 90 days
3 after the sending of the notification. Each party shall make
4 a good faith effort to resolve disputes under this Section.
5 The burden of proving good cause is on the party who asserts
6 it.
7 (b) The rights confined by this Act may not be waived.
8 Any effort to do so is void.
9 Section 5-20. Notice of termination, cancellation, or
10 alteration.
11 (a) Except as provided in subsection (c) of this
12 Section, no supplier may cancel, fail to renew, otherwise
13 terminate, or alter an agreement unless the supplier
14 furnishes prior notification to the affected party in
15 accordance with subsection (b).
16 (b) The notification required under subsection (a) shall
17 be in writing and sent to the affected party by certified
18 mail not less than 90 days before the date on which the
19 agreement will be cancelled, not renewed, otherwise
20 terminated, or altered. The notification shall contain (i) a
21 statement of intention to cancel, fail to renew, otherwise
22 terminate, or alter an agreement, (ii) a complete statement
23 of reasons therefore, including all data and documentation
24 necessary to fully apprise the distributor of the reasons for
25 the action, (iii) the date on which the action shall take
26 effect, and (iv) shall provide that the distributor has 60
27 days in which to rectify any claimed deficiency. If the
28 deficiency is rectified within 60 days, the notice shall be
29 void.
30 (c) A supplier may cancel, fail to renew, or otherwise
31 terminate an agreement without furnishing any prior
32 notification for any of the following reasons:
33 (1) Distributor's assignment for the benefit of
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1 creditors, or similar disposition, of substantially all
2 of the assets of such party's business.
3 (2) Insolvency of distributor or the institution of
4 proceedings in bankruptcy by or against the distributor.
5 (3) Dissolution or liquidation of the distributor.
6 (4) Distributor's conviction of, or plea of guilty
7 or no contest to, a charge of violating a law or
8 regulation in this State that materially and adversely
9 affects the ability of either party to continue to sell
10 wine or liquor in this State, or the revocation or
11 suspension of a license or permit to sell wine or liquor
12 in this State.
13 (d) The notification required under subsection (a) shall
14 be sent not less than 10 days before the date of the
15 cancellation, non-renewal, termination, or alteration of the
16 notice if the notice is based on (i) failure to pay any
17 account when due and upon demand by the supplier for such
18 payment, in accordance with agreed payment terms, or (ii) bad
19 faith in the performance of the distributorship agreement.
20 If the notice is based on a failure to pay any account, the
21 distributor shall have 10 days in which to remedy the
22 default. If the default in payment is remedied within 10
23 days, the notice shall be void.
24 Section 5-25. Action for damages and injunctive relief.
25 Parties to a distributorship may bring an action in any court
26 of competent jurisdiction for damages sustained as a
27 consequence of the violation, and may also be granted
28 injunctive relief against unlawful termination, cancellation,
29 nonrenewal, or other harm. For agreements entered into or
30 renewed after the effective date of this Act, this remedy is
31 an addition to the remedies provided in Section 5-35. It is
32 the policy of this State to avoid unfair or wrongful
33 terminations. Therefore, in establishing the right to
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1 injunctive relief, it shall not be necessary to establish the
2 existence of irreparable harm or an inadequate remedy at law.
3 Notwithstanding any provisions of any agreement between a
4 supplier and a distributor, the venue for any such action
5 shall be at the location of the distributorship and this Act
6 shall apply.
7 Section 5-30. Application to arbitration agreements. An
8 agreement between a supplier that is not an Illinois winery
9 or a winery that has annual case sales in the State of
10 Illinois less than or equal to 10,000 cases per year and a
11 distributor providing for binding arbitration of disputes
12 shall be valid and enforceable in accordance with the Federal
13 Arbitration Act. In the event that a dispute concerning the
14 existence of good cause for a termination, cancellation,
15 nonrenewal, or other harm is resolved through arbitration,
16 the definition of good cause and the substantive provisions
17 of this Act shall apply.
18 Section 5-35. Procedural provisions; good faith; role of
19 Liquor Control Commission.
20 (a) This Section clarifies existing rights and
21 obligations and establishes remedial procedures applicable to
22 registrations under Section 6-9 of the Liquor Control Act of
23 1934.
24 (b) Under existing Illinois common and statutory law,
25 suppliers, other than (i) Illinois wineries or (ii) wineries
26 that have annual case sales in the State of Illinois less
27 than or equal to 10,000 cases per year, who have or should
28 have registered names of distributors under Section 6-9 of
29 the Liquor Control Act of 1934, granting or confirming
30 distributors rights to sell at wholesale in this State, have
31 an obligation to act in good faith in all aspects of the
32 registration and distributorship relationship, without
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1 discrimination or coercion under threat of retaliation or
2 termination in bad faith, and in conformity with any
3 emergency or final regulations issued by the Liquor Control
4 Commission pursuant to Section 3-12 or 6-19 or other
5 applicable provision of the Liquor Control Act of 1934 or by
6 the Department of Revenue. Under the existing obligation to
7 act in good faith, no registration or obligation to register
8 under Section 6-9 may be terminated, nor may a supplier that
9 is not an Illinois winery or a winery that has annual case
10 sales in the State of Illinois less than or equal to 10,000
11 cases per year fail to renew or extend a product, name,
12 brand, registration, or an agreement with a distributor
13 except by acting in good faith in all aspects of the
14 relationship, without discrimination or coercion, and not in
15 retaliation or as a result of the distributor's exercise of
16 its right to petition the General Assembly, the Congress, or
17 any other unit or form of government for any purpose, to any
18 end, or for or against any proposition, provision, amendment,
19 bill, resolution, judgment, decision, rule, regulation, or
20 interpretation.
21 (c) In order to enforce the existing obligation of good
22 faith with respect to registrations under Section 6-9, the
23 Commission shall have power to:
24 (1) Prohibit or suspend any supplier that is not an
25 Illinois winery or a winery that has annual case sales in
26 the State of Illinois less than or equal to 10,000 cases
27 per year or its successors or assigns found to have
28 flagrantly or repeatedly violated the obligation
29 described in this Section from selling any product or
30 products governed under the Liquor Control Act of 1934
31 and the Twenty-First Amendment to the United States
32 Constitution in Illinois.
33 (2) Order the supplier, if the supplier is not an
34 Illinois winery or a winery that has annual case sales in
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1 the State of Illinois less than or equal to 10,000 cases
2 per year, to continue providing products to a distributor
3 at prices and quantities in effect for the
4 distributorship prior to any termination or failure to
5 renew that becomes the subject of a dispute or
6 administrative proceedings under this Section until the
7 matters in dispute are determined by an order which is
8 final and non-reviewable.
9 Orders of the Liquor Control Commission entered under
10 this Section shall be deemed orders as to which an emergency
11 exists.
12 (d) Notwithstanding Section 5-30 of this Act, any
13 aggrieved party under this Section may apply to the
14 Commission for a finding that another party has violated this
15 Section and request relief.
16 (e) Orders entered by the Commission under this Section
17 shall be reviewable by the Circuit Court under the terms of
18 the Administrative Review Law. In accordance with Section
19 3-110 of the Administrative Review Law, findings and
20 conclusions of the Commission shall be held to be prima facie
21 true and correct.
22 (f) No court shall enter a stay, restraining order,
23 injunction, mandamus, or other order that has the effect of
24 suspending, delaying, modifying, or overturning a Commission
25 finding or determination under this Section before a full
26 hearing and final decision on the merits of the Commission
27 ruling, finding, or order.
28 ARTICLE 10
29 SOFT DRINK INDUSTRY FAIR DEALING ACT
30 Section 10-1. Short title. This Article may be cited as
31 the Soft Drink Industry Fair Dealing Act. All references in
32 this Article 10 to this Act mean the Soft Drink Industry Fair
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1 Dealing Act.
2 Section 10-5. Definitions. As used in this Act:
3 "Distribution agreement" means any contract, appointment,
4 agreement, course of dealing, or arrangement, express or
5 implied, whether oral or written, for a definite or
6 indefinite period, between a supplier and a distributor
7 pursuant to which the distributor has been granted the right
8 to (i) directly or through a cooperative or association of
9 which the distributor is a member, bottle or can one or more
10 soft drink beverages or process soft drink beverage
11 concentrate into beverage syrup, and (ii) sell, distribute,
12 or deliver such soft drink beverages or soft drink beverage
13 syrup under trademarks owned or licensed by the supplier.
14 "Distributor" means a person in this State who (i)
15 directly or through a cooperative or association of which the
16 person is a member, bottles or cans one or more soft drink
17 beverage or processes soft drink beverage concentrate into
18 beverage syrup, and (ii) sells, distributes, or delivers such
19 soft drink beverages or soft drink beverage syrup under
20 trademarks owned or licensed by a supplier.
21 "Distributorship" means a business relationship between a
22 supplier and a distributor established pursuant to a
23 distribution agreement. Except as otherwise expressly
24 provided in this Act, the term "distributorship" does not
25 include a partnership, joint venture, corporation, limited
26 liability company, or other entity owned in whole or in part
27 by a supplier.
28 "Good cause" means the failure of a distributor to comply
29 substantially with essential and reasonable requirements
30 imposed upon the distributor by a distribution agreement or
31 bad faith in the performance of a distribution agreement.
32 The requirements may not be discriminatory either by their
33 terms or in the methods or effects of enforcement as compared
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1 with requirements imposed upon other distributors. The
2 requirements may not be inconsistent with this Act or in
3 violation of any law or regulation. The failure of a
4 distributor to assent to any amendment, modification, or
5 change in the terms of a distribution agreement that would
6 have the effect of materially and adversely affecting the
7 value of the rights conferred upon the distributor by the
8 distribution agreement shall not constitute good cause. For
9 purposes of this Act, any amendment, modification, or change
10 in the terms of a distribution agreement that impairs,
11 restricts, or eliminates, in whole or in part, the
12 distribution or delivery rights of a distributor under the
13 distribution agreement shall be deemed to materially and
14 adversely affect the value of the rights conferred upon the
15 distributor.
16 "Good faith" means honesty in fact and the observation of
17 reasonable commercial standards for fair dealing in trade.
18 "Person" means a natural person, partnership, joint
19 venture, corporation, limited liability company, or other
20 entity and includes heirs, assigns, successors, personal
21 representatives, and guardians.
22 "Soft drink" means a non-alcoholic, carbonated beverage
23 made from a concentrate, syrup, or other beverage base.
24 "Soft drink products" means ready-to-use soft drinks,
25 whether in bottles, cans, or other containers and soft drink
26 beverage syrup for use in servicing fountain equipment and
27 cup vending machines dispensing soft drinks.
28 "Supplier" means a person engaged in the manufacture or
29 marketing of soft drink beverage concentrate, syrup, or other
30 soft drink beverage base for use in the preparation of soft
31 drink products sold under trademarks owned or licensed by
32 such person.
33 Section 10-10. Legislative declarations; construction;
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1 variation by contract.
2 (a) The General Assembly makes the following findings
3 and declarations:
4 (1) The soft drink product industry is dominated by
5 a small number of suppliers which in many instances
6 control large processing, bottling, canning, and
7 distribution operations. Distributors, on the other
8 hand, often are comparatively small, family-owned
9 businesses.
10 (2) Distributors of soft drink products in the
11 State of Illinois have been and are required to make
12 substantial capital investments in plant, property, and
13 equipment in order to fulfill their obligations under
14 distribution agreements. Distributors must rely upon the
15 continuing right to sell and distribute soft drink
16 products to recover their investments and to obtain a
17 reasonable return on those investments.
18 (3) Distributorship relationships in the State of
19 Illinois vitally affect the general economy of the State
20 and the public's interest in the fair, efficient, and
21 competitive distribution of soft drink products. Some
22 suppliers have unfairly used their economic power to
23 coerce distributors to alter their business practices and
24 to surrender valuable rights under their distribution
25 agreements, including the right to sell, distribute, and
26 deliver soft drink products to large retail accounts.
27 Such actions threaten the ability of distributors to
28 continue to serve their remaining customers, which
29 consist in large part of small businesses such as
30 restaurants, convenience stores, service stations, and
31 schools, all to the great prejudice and harm of the
32 citizens of the State of Illinois.
33 (4) Protecting distributors against unfair
34 treatment by suppliers, who inherently have superior
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1 economic power and superior bargaining power in the
2 negotiation of distributorships and distribution
3 practices, is in the public interest.
4 (b) The purposes of this Act are to promote the public's
5 interest in the fair, efficient, and competitive distribution
6 of soft drink products by regulation and by the encouragement
7 of suppliers and distributors of soft drink products to
8 conduct their business relations toward these ends by:
9 (1) protecting distributors against unfair
10 treatment by suppliers who inherently have superior
11 economic power and superior bargaining power in the
12 negotiation of distributorships and distribution
13 practices;
14 (2) assuring that distributors are free to manage
15 their business enterprises;
16 (3) assuring suppliers and the public of continuing
17 service from distributors able to devote adequate efforts
18 and resources to the processing, bottling, canning,
19 distribution, and delivery of soft drink products as to
20 which they have been granted a distributorship; and
21 (4) providing distributors with rights and remedies
22 in addition to those existing by contract or at common
23 law.
24 This Act shall be liberally construed and applied to
25 promote its underlying purposes.
26 (c) The provisions of this Act are of a public order and
27 therefore the rights established by this Act cannot be waived
28 or varied by contract or agreement. Any contract or
29 agreement purporting to do so or purporting to preclude the
30 application of this Act to any distributorship subject to
31 this Act is void and unenforceable to that extent.
32 (d) This Act provides distributors with rights and
33 remedies in addition to those existing by contract or common
34 law and reaffirms rights and remedies provided by contract or
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1 common law.
2 (e) In accordance with Section 1.31 of the Statute on
3 Statutes, the provisions of this Act are severable. If any
4 provision of this Act, or the application of any provision of
5 this Act to any person or circumstance, is held invalid, such
6 invalidity shall not affect other provisions or applications
7 of this Act which can be given effect without the invalid
8 provision or application, and the application of this Act to
9 persons or circumstances other than those as to which it is
10 held invalid shall not be affected thereby.
11 Section 10-15. Cancellation and alteration of
12 distributorships.
13 (a) No supplier, directly or through any officer, agent,
14 employee, or representative, shall:
15 (1) cancel, fail to renew, or otherwise terminate a
16 distribution agreement without good cause to do so;
17 (2) unilaterally impose any amendment,
18 modification, or change in the terms of a distribution
19 agreement, or require or coerce a distributor to assent
20 to any amendment, modification, or change in the terms of
21 a distribution agreement that would have the effect of
22 materially and adversely affecting the value of the
23 rights conferred upon the distributor by the distribution
24 agreement;
25 (3) fail to exercise good faith in the negotiation
26 of any amendment, modification, or change in the terms of
27 a distribution agreement, engage in retaliatory conduct
28 against a distributor for the exercise of a legal right,
29 or otherwise fail to exercise good faith in its dealings
30 with a distributor;
31 (4) discriminate in pricing, fees, charges or other
32 terms of the distributorship against any distributor that
33 withholds its assent to any amendment, modification, or
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1 change in the terms of a distribution agreement that
2 would have the effect of materially and adversely
3 affecting the value of the rights conferred upon the
4 distributor by the distribution agreement;
5 (5) restrict or inhibit, directly or indirectly,
6 the right of free association among distributors for any
7 lawful purpose;
8 (6) fail to offer a distributor the right, within
9 its geographic territory, to (i) directly or through a
10 cooperative or association of which the distributor is a
11 member, bottle or can any new soft drink beverages
12 introduced by the supplier and process any new soft drink
13 beverage concentrate into beverage syrup, and (ii) sell,
14 distribute, and deliver such soft drink beverages or soft
15 drink beverage syrup under trademarks owned or licensed
16 by the supplier or offer a distributor such right on
17 terms and conditions less favorable than such right is
18 offered to any other distributor of the supplier,
19 including any distributor owned in whole or in part by
20 the supplier.
21 (b) No supplier who, pursuant to a distribution
22 agreement, has granted a person the exclusive right in a
23 generally defined geographic area to (i) directly or through
24 a cooperative or association of which the person is a member,
25 bottle or can one or more soft drink beverages, or process
26 soft drink beverage concentrate into beverage syrup, and (ii)
27 sell, distribute, or deliver such soft drink beverages or
28 soft drink beverage syrup under trademarks owned or licensed
29 by the supplier, shall, directly or through any officer,
30 agent, employee, or representative, enter into an agreement
31 authorizing, permitting, contemplating, or providing for the
32 exercise of any of such rights in the same geographic area by
33 any other person.
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1 Section 10-20. Notice of cancellation.
2 (a) Except as hereinafter provided in subsection (c), no
3 supplier may cancel, fail to renew, or otherwise terminate a
4 distribution agreement unless the supplier furnishes prior
5 notification to the affected party in accordance with
6 subsection (b).
7 (b) The notification required by subsection (a) of this
8 Section shall contain (i) a statement of the supplier's
9 intention to cancel, fail to renew, or otherwise terminate
10 the distribution agreement, (ii) a complete statement of the
11 reasons therefor, including all data and documentation
12 necessary to fully apprise the distributor of the reasons for
13 the action, and (iii) the date on which the action is
14 intended to take effect. The notification shall be in
15 writing and sent to the affected distributor by certified
16 mail not less than 90 days before the date on which the
17 supplier intends to cancel, fail to renew, or otherwise
18 terminate the distribution agreement, and shall provide the
19 distributor a reasonable period of time, in no event less
20 than 60 days from the date of delivery or posting of the
21 notice, within which to cure any claimed deficiency. If the
22 reason for cancellation, nonrenewal, or other termination is
23 nonpayment of sums due under the distributorship, the
24 notification shall be sent not less than 30 days before the
25 date on which the supplier intends to cancel, fail to renew,
26 or otherwise terminate the distribution agreement, and the
27 distributor shall have 30 days from the date of delivery or
28 posting of the notice within which to cure the default. If
29 the deficiency is cured within the applicable period, the
30 notice shall be void.
31 (c) The notice requirements of this Section shall not
32 apply if the reason for cancellation, failure to renew, or
33 other termination of a distributorship agreement is:
34 (1) an assignment for the benefit of the
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1 distributor's creditors or similar disposition of
2 substantially all of the assets of the distributor's
3 business;
4 (2) the insolvency of the distributor or the
5 institution of proceedings in bankruptcy by or against
6 the distributor; or
7 (3) the dissolution or liquidation of the
8 distributor.
9 Section 10-25. Transfer of business assets and stock.
10 No supplier, directly or through any officer, agent, employee
11 or representative, shall:
12 (a) unreasonably withhold or delay its consent, if
13 requested by a distributor, to any assignment, sale,
14 transfer, or other disposition of all or any portion of (i) a
15 distributor's business, assets, or stock, or of the
16 beneficial ownership or control of a distributor, or (ii) the
17 stock, beneficial ownership, or control of any other entity
18 owning or controlling a distributor;
19 (b) upon the death of a person owning or controlling a
20 distributor, deny approval of a transfer of ownership or
21 control of the distributorship to a surviving spouse or adult
22 child of such person;
23 (c) upon the death of one of the partners of a
24 partnership operating the business of a distributor, deny the
25 surviving partner or partners of such partnership the right
26 to become a successor-in-interest to the distribution
27 agreement between the supplier and such partnership;
28 (d) unreasonably withhold or delay its consent, if
29 requested by a distributor, to any assignment, sale, or
30 transfer to the distributor of all or any portion of the
31 business, assets, or stock of any other person who has been
32 granted the right to (i) directly or through a cooperative or
33 association of which the person is a member, bottle or can
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1 one or more soft drink beverages or process soft drink
2 beverage concentrate into beverage syrup, and (ii) sell,
3 distribute, or deliver soft drink beverages or soft drink
4 beverage syrup under trademarks owned or licensed by the
5 supplier, where the distributor and such other person have
6 freely negotiated such an assignment, sale, or transfer.
7 Section 10-30. Reasonable compensation.
8 (a) Any supplier that (i) cancels, fails to renew, or
9 otherwise terminates any distribution agreement, or (ii)
10 unlawfully denies approval of or unreasonably withholds
11 consent to any assignment, transfer, or sale of a
12 distributor's business, assets, stock, or other ownership
13 interest in a distributor, shall (i) pay the distributor the
14 fair market value of that portion of the distributor's
15 business that the supplier has cancelled, failed to renew, or
16 otherwise terminated, or (ii) pay the distributor or other
17 aggrieved person the fair market value of that portion of the
18 business, assets, stock, or other ownership interest sought
19 to be assigned, transferred, or sold. Fair market value shall
20 include, but shall not be limited to, the value of the
21 goodwill associated with the business, assets, stock, or
22 other ownership interest valued hereunder, and such fair
23 market value shall be determined without regard to any
24 marketability, minority interest, or other similar discount
25 or reduction.
26 (b) If a supplier and a distributor or other aggreived
27 person are unable to agree on the reasonable compensation to
28 be paid under subsection (a), any such party may maintain a
29 civil suit as provided in Section 10-35 of this Act or the
30 matter may, by mutual agreement of the parties, be submitted
31 to arbitration. Unless the parties otherwise agree, the
32 costs of arbitration shall be shared equally by the parties.
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1 Section 10-35. Judicial remedies.
2 (a) In any action between the parties to a distribution
3 agreement where the existence of good cause for a supplier to
4 cancel, fail to renew, or otherwise terminate the
5 distribution agreement is at issue, the burden of proving
6 good cause shall be on the supplier.
7 (b) If a supplier engages in any of the practices
8 prohibited by Section 10-15 of this Act or violates any of
9 the provisions of Sections 10-20, 10-25, or 10-30 of this
10 Act, any aggrieved distributor or other aggrieved person may
11 bring an action against the supplier for damages sustained by
12 the distributor as a consequence thereof, together with the
13 actual costs and expenses of the action, including reasonable
14 attorney's fees. The aggreived distributor or other
15 aggrieved person also may be granted injunctive relief,
16 including injunctive relief against an unlawful termination,
17 cancellation, nonrenewal, or other termination of a
18 distribution agreement. The remedies provided in this
19 subsection (b) are cumulative with all other remedies
20 available to an aggrieved distributor or other aggrieved
21 person, including but not limited to the remedies provided
22 for in subsections (c), (d) and (e) of this Section.
23 (c) Upon proper application to the court, a supplier,
24 distributor, or other aggreived person may bring an action to
25 determine reasonable compensation under Section 10-30 of this
26 Act.
27 (d) A supplier, distributor, or other aggrieved person
28 may bring an action for a declaratory judgment to determine
29 any controversy arising under this Act or out of the
30 distributorship relationship.
31 (e) If, in any action brought pursuant to this Act, a
32 finding is made that a party has not acted in good faith with
33 respect to any other party to a distribution agreement, an
34 appropriate penalty shall be assessed against that party and,
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1 in addition, that party shall also be ordered to pay the
2 actual costs and expenses of the action, including reasonable
3 attorney's fees incurred by the other party.
4 (f) Any action brought pursuant to this Act shall be
5 brought in a court of this State or in a federal court in
6 this State vested with jurisdiction over the controversy.
7 Venue in any such action shall be in accordance with the Code
8 of Civil Procedure or Title 28 of the U.S. Code, as the case
9 may be, provided that in any action brought in a court of
10 this State, venue also shall exist in any county in which the
11 distributorship is located.
12 (g) Nothing in this Act shall (i) prohibit the parties
13 to any dispute from agreeing to arbitrate the dispute or (ii)
14 prohibit the enforcement of any arbitration agreement in
15 accordance with applicable law. In any such arbitration, the
16 definitions and substantive provisions of this Act shall
17 apply and the arbitrator may afford the remedies provided for
18 by this Act.
19 Section 10-40. Preliminary injunctions; temporary
20 restraining orders. In any action brought under this Act,
21 for purposes of determining whether a preliminary injunction
22 or a temporary restraining order should be issued, (i) any
23 violation of this Act shall be deemed to constitute an
24 irreparable injury, (ii) the party seeking relief shall be
25 deemed to have no adequate remedy at law, and (iii)
26 enforcement of rights under this Act shall be deemed to be in
27 the public interest and to outweigh any competing interest.
28 Section 10-45. Application of this Act. This Act shall
29 govern all relations between suppliers and distributors to
30 the fullest extent consistent with the constitutions of this
31 State and of the United States. All provisions of this Act
32 which are declarative of or clarify existing law, including
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1 the provisions of Section 10-15(a)(3) of this Act, apply to
2 all agreements between a supplier and a distributor whether
3 those agreements were entered into before or after the
4 effective date of this Act. In addition, this Act shall, to
5 the fullest extent permitted by law, apply (i) to conduct
6 occurring after the effective date of this Act, whether or
7 not such conduct relates to a distribution agreement entered
8 into before the effective date of this Act, and (ii) to
9 distribution agreements entered into or amended after the
10 effective date of this Act, including any renewal of a
11 distribution agreement in existence on or before the
12 effective date of this Act. Renewal of a distribution
13 agreement with a designated term or duration shall mean (i)
14 the establishment of a new term or duration, (ii) an
15 extension of the distribution agreement on any other basis,
16 or (iii) the shipment of soft drink concentrate or syrup to
17 the distributor after the expiration of the designated term
18 or duration. Renewal of a distribution agreement that
19 provides for a month to month, year to year, or other
20 periodic term or duration, shall mean (i) the continuation of
21 the distributorship into the next month, year, or other
22 period commencing after the effective date of this Act, (ii)
23 an extension of the distribution agreement on any other
24 basis, or (iii) the shipment of soft drink concentrate or
25 syrup to a distributor after the expiration of the month,
26 year, or other period of the distribution agreement. Renewal
27 of any distribution agreement that does not have a designated
28 term or duration, or that is terminable at will or upon
29 notice, shall mean the shipment of soft drink concentrate or
30 syrup to a distributor after the effective date of this Act.
31 ARTICLE 95
32 SEVERABILITY
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1 Section 95-95. Severability. In accordance with Section
2 1.31 of the Statute on Statutes, the provisions of this Act
3 are severable. If any provision or interpretation of this
4 Act, or the application of such interpretation or provision
5 to any distributorship, is held invalid, the application of
6 the Act to persons or circumstances other than those as to
7 which it is held invalid shall not be affected thereby.
8 ARTICLE 99
9 EFFECTIVE DATE
10 Section 99-99. Effective date. This Act takes effect
11 upon becoming law.
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