Full Text of SB3179 98th General Assembly
SB3179 98TH GENERAL ASSEMBLY |
| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 SB3179 Introduced 2/11/2014, by Sen. Don Harmon SYNOPSIS AS INTRODUCED: |
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815 ILCS 720/7 | from Ch. 43, par. 307 |
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Amends the Beer Industry Fair Dealing Act. Provides that a brewer that cancels or terminates an agreement may not fail to fill an order for beer requested by the wholesaler until reasonable compensation is accepted by the affected wholesaler.
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| | A BILL FOR |
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| 1 | | AN ACT concerning business.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Beer Industry Fair Dealing Act is amended by | 5 | | changing Section 7 as follows:
| 6 | | (815 ILCS 720/7) (from Ch. 43, par. 307)
| 7 | | Sec. 7. Reasonable compensation.
| 8 | | (1) Subject to the right of any party to an agreement to | 9 | | pursue any remedy provided in Section 9, any brewer that | 10 | | cancels, terminates or fails to renew any agreement,
or | 11 | | unlawfully denies approval of, or unreasonably withholds | 12 | | consent, to any
assignment, transfer or sale of a wholesaler's | 13 | | business assets or voting
stock or other equity securities, | 14 | | except as provided in this Act, shall pay
the wholesaler with | 15 | | which it has an agreement pursuant to this Act
reasonable | 16 | | compensation for the fair market value of the wholesaler's
| 17 | | business with relation to the affected brand or brands. The | 18 | | fair market
value of the wholesaler's business shall include, | 19 | | but not be limited to,
its goodwill, if any. A brewer may not | 20 | | fail or refuse to furnish or fill an order for beer requested | 21 | | by the wholesaler until reasonable compensation is accepted by | 22 | | the affected wholesaler in compliance with this Section.
| 23 | | (1.5) The provisions of this subsection (1.5) shall only |
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| 1 | | apply if the brewer agrees to pay reasonable compensation as | 2 | | defined in subsection (1) and
the total annual volume of all | 3 | | beer products supplied by a brewer to a
wholesaler pursuant to | 4 | | agreements between such brewer and wholesaler represents 10%
or | 5 | | less of the total annual volume of the wholesaler's business | 6 | | for all
beer products supplied by all brewers. For purposes of | 7 | | this subsection (1.5)
only, "annual volume"
means the volume of | 8 | | beer products sold by the wholesaler in the 12-month period
| 9 | | immediately preceding receipt of the brewer's written offer | 10 | | pursuant to this
subsection (1.5).
| 11 | | If a brewer is required to pay reasonable compensation as | 12 | | described
in subsection (1) and the question of reasonable | 13 | | compensation is the only issue
between the parties,
the brewer | 14 | | shall, in good faith, make a written offer to
pay reasonable | 15 | | compensation. The wholesaler shall have 30 days from receipt of
| 16 | | the written offer to accept or reject the
brewer's offer. | 17 | | Failure to respond, in writing, to the written offer shall
| 18 | | constitute rejection of the offer to pay reasonable | 19 | | compensation. If the
wholesaler, in writing, accepts the | 20 | | written offer, the wholesaler shall
surrender the affected | 21 | | brand or brands to the brewer at the time payment is
received | 22 | | from
the brewer. If the wholesaler does not, in writing, accept | 23 | | the brewer's
written offer, either party
may elect to submit | 24 | | the determination of reasonable compensation to expedited
| 25 | | binding arbitration. If one party notifies the other party in | 26 | | writing that it
elects expedited binding arbitration, the other |
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| 1 | | party has 10 days from receipt
of the notification to elect | 2 | | expedited binding arbitration or to
reject the arbitration in | 3 | | writing.
Failure to elect arbitration shall constitute
| 4 | | rejection of the offer to arbitrate.
| 5 | | (A) If the parties agree to expedited binding | 6 | | arbitration, the arbitration
shall
be subject to the | 7 | | expedited process under the commercial rules of the | 8 | | American
Arbitration Association.
The arbitration shall be | 9 | | concluded within 90 days after the parties agree to
| 10 | | expedited binding arbitration under this Section, unless | 11 | | extended by the
arbitrator or one of the parties. The | 12 | | wholesaler shall retain the affected
brand or brands during | 13 | | the period of arbitration,
at the conclusion of which
the | 14 | | wholesaler shall surrender the affected brand or brands to | 15 | | the
brewer upon payment of the amount determined to be | 16 | | reasonable compensation,
provided the wholesaler shall | 17 | | transfer the affected brand or brands to the
brewer
after | 18 | | 90 days if the arbitration proceedings are extended beyond | 19 | | the 90 day
limit at the request of the wholesaler. | 20 | | Arbitration costs shall be paid
one-half by the wholesaler | 21 | | and
one-half by the brewer. The award of the arbitrator | 22 | | shall be final and binding
on the parties.
| 23 | | (B) If the brewer elects expedited binding arbitration | 24 | | but the wholesaler
rejects the offer to arbitrate:
| 25 | | (i) The wholesaler may accept, in writing, any | 26 | | written offer previously
made by the
brewer. If the |
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| 1 | | wholesaler selects this option, the wholesaler must | 2 | | surrender
the affected brand or brands to the brewer at | 3 | | the time payment is received. If
the
wholesaler | 4 | | believes that the amount paid by the brewer is less | 5 | | than reasonable
compensation under subsection (1), the | 6 | | wholesaler may bring a proceeding under
subsection (2) | 7 | | for the difference, but may not proceed under | 8 | | subsection (3) of
Section 9; or
| 9 | | (ii) The
wholesaler may proceed against the brewer | 10 | | under Section 9, provided
the wholesaler must
| 11 | | surrender the affected brand or brands to the brewer if | 12 | | a proceeding under
Section 9 has not been initiated | 13 | | within 90 days after the wholesaler rejects
the offer | 14 | | to arbitrate.
Upon determination of reasonable | 15 | | compensation pursuant to Section 9, the brewer
shall
| 16 | | pay the wholesaler the amount so determined.
Until | 17 | | receiving payment from the
brewer of the amount so | 18 | | determined, the wholesaler shall retain the
affected | 19 | | brand or brands.
If (a) the wholesaler retains the | 20 | | affected brand or brands for a period of 2
years after | 21 | | the wholesaler rejects the offer to arbitrate,
(b) the | 22 | | amount of reasonable compensation has not been
| 23 | | determined, and (c) an injunction has not been issued, | 24 | | the brewer shall, in
good
faith, make a payment of | 25 | | reasonable compensation to the wholesaler. If, | 26 | | however, the brewer fails to ship or make available |
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| 1 | | brands ordered by the wholesaler prior to the brewer | 2 | | making any payment (including a good faith payment as | 3 | | provided in this subsection) to the wholesaler, the | 4 | | wholesaler shall be entitled to injunctive relief and | 5 | | attorneys' fees and shall subject the brewer to | 6 | | punitive damages. Upon
receipt of this
payment, the | 7 | | wholesaler must surrender the affected brand or brands | 8 | | to the
brewer, provided that such surrender shall not | 9 | | affect the brewer's obligation
to pay all amounts | 10 | | ultimately determined due to the wholesaler under this | 11 | | Act.
| 12 | | (C) If the wholesaler elects expedited binding | 13 | | arbitration but the brewer
rejects, the brewer may proceed | 14 | | under Section 9 for
the
purpose of
determining reasonable | 15 | | compensation.
Upon determination of reasonable | 16 | | compensation pursuant to Section 9, the brewer
shall
pay | 17 | | the wholesaler the amount so determined.
Until receiving | 18 | | payment from the
brewer of the amount so determined, the | 19 | | wholesaler shall retain the
affected brand or brands.
If | 20 | | (a) the brewer initiates a proceeding under Section 9 | 21 | | within 90 days after
the wholesaler rejects the offer to | 22 | | arbitrate, (b) the wholesaler retains the
affected brand or | 23 | | brands for a period of 2 years from the date the wholesaler
| 24 | | rejects the offer to arbitrate, (c) the amount
of | 25 | | reasonable compensation has not been
determined, and (d) an | 26 | | injunction has not been issued, the brewer shall, in
good
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| 1 | | faith, make a payment of reasonable compensation to the | 2 | | wholesaler. If, however, the brewer fails to ship or make | 3 | | available brands ordered by the wholesaler prior to the | 4 | | brewer making any payment (including a good faith payment | 5 | | as provided in this subsection) to the wholesaler, the | 6 | | wholesaler shall be entitled to injunctive relief and | 7 | | attorneys' fees and shall subject the brewer to punitive | 8 | | damages. Upon
receipt of this
payment, the wholesaler must | 9 | | surrender the affected brand or brands to the
brewer, | 10 | | provided that such surrender shall not affect the brewer's | 11 | | obligation
to pay all amounts ultimately determined due to | 12 | | the wholesaler under this Act.
| 13 | | (2) Except as otherwise provided in subsection (1.5), in | 14 | | the event that
the brewer and the beer wholesaler are unable to
| 15 | | mutually agree on the reasonable compensation to be paid for | 16 | | the value of
the wholesaler's business, as defined in this Act, | 17 | | either
party may maintain a civil suit as provided in Section 9 | 18 | | or the matter
may, by mutual agreement of the parties, be | 19 | | submitted to a neutral
arbitrator to be selected by the parties | 20 | | and the claim settled in
accordance with the rules provided by | 21 | | the American Arbitration Association.
Arbitration costs shall | 22 | | be paid one-half by the wholesaler and one-half by
the brewer. | 23 | | The award of the arbitrator shall be final and binding on the
| 24 | | parties.
| 25 | | (Source: P.A. 96-482, eff. 8-14-09; 97-1119, eff. 8-27-12.)
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