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91_HB0152ham001
LRB9101262LDpkam
1 AMENDMENT TO HOUSE BILL 152
2 AMENDMENT NO. . Amend House Bill 152 by replacing
3 the title with the following:
4 "AN ACT in relation to beverage distribution."; and
5 by replacing everything after the enacting clause with the
6 following:
7 "ARTICLE 5
8 ILLINOIS WINE AND SPIRITS INDUSTRY
9 FAIR DEALING ACT OF 1999
10 Section 5-1. Short title. This Article may be cited as
11 the Illinois Wine and Spirits Industry Fair Dealing Act of
12 1999. All references in this Article 5 to this Act mean the
13 Illinois Wine and Spirits Industry Fair Dealing Act of 1999.
14 Section 5-5. Definitions. As used in this Act:
15 "Commission" means the Illinois Liquor Control
16 Commission.
17 "Distributorship" means a business relationship, either
18 express or implied, whether oral or written, between a
19 supplier of wine or spirits (other than (i) an Illinois
20 winery or (ii) a winery that has annual case sales in the
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1 State of Illinois less than or equal to 10,000 cases per
2 year) for resale and a distributor of such products in which
3 the distributor is given the right to sell a designated
4 product or products, in a generally defined geographic area,
5 in exchange for an express or implied promise to market the
6 product or products. A registration under the Liquor Control
7 Act of 1934 as amended is a distributorship.
8 "Supplier" means a person who is a grantor of a wine or
9 liquor distributorship in this State (other than (i) an
10 Illinois winery or (ii) a winery that has annual case sales
11 in the State of Illinois less than or equal to 10,000 cases
12 per year).
13 "Distributor" means a person who is a grantee of a wine
14 or liquor distributorship in this State.
15 "Agreement" means any contract, agreement, course of
16 dealing, or arrangement, express or implied, whether oral or
17 written, for a definite or indefinite period between a
18 supplier (other than (i) an Illinois winery or (ii) a winery
19 that has annual case sales in the State of Illinois less than
20 or equal to 10,000 cases per year, and a distributor
21 pursuant to which a distributor has been granted a
22 distributorship).
23 "Good cause" means a failure by a distributor to comply
24 with essential and reasonable requirements imposed upon the
25 distributor by the supplier or bad faith in the performance
26 of the distributorship agreement. The requirements may not
27 be discriminating either by their terms or in the methods or
28 effects of enforcement as compared with requirements imposed
29 on other similarly situated distributors by the supplier.
30 The requirements may not be inconsistent with this Act or in
31 violation of any law or regulation.
32 "Wine and liquor" means spirituous liquor or wine
33 containing alcohol in excess of 10 percent by weight, but not
34 including beer and other malt beverages.
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1 "Person" means a natural person, partnership, joint
2 venture, corporation, or other entity, and includes heirs,
3 assigns, successors, personal representatives, and guardians.
4 "Illinois winery" means a winery located in Illinois.
5 Section 5-10. Legislative declaration; purposes and
6 construction.
7 (a) The General Assembly makes the following findings
8 and declarations:
9 (i) Pursuant to the 21st Amendment of the
10 Constitution of the United States, the General Assembly
11 has enacted the Liquor Control Act of 1934, which
12 establishes a three-tier system of distribution of wine
13 and spirits to the public.
14 (ii) The three-tier system of distribution was
15 established, among other things, to prevent suppliers
16 from controlling pricing and distribution in a manner
17 that harms the interests of citizens of the State of
18 Illinois. Manufacturers have now proposed attacks on the
19 three-tier system as well as on the provision in the
20 Illinois Vehicle Code setting the limit for intoxication
21 at 0.08.
22 (iii) This Act is enacted pursuant to authority of
23 the State of Illinois and under the provisions of the
24 21st Amendment to the United States Constitution to
25 promote the public's interest in fair, efficient, and
26 competitive distribution of wine and liquor products.
27 (b) This Act shall be construed and applied to promote
28 its underlying remedial purposes and policies.
29 (c) The provisions of this Act are of a public order and
30 therefore the rights determined by those provisions cannot be
31 waived. Any contract or agreement purporting to do so is
32 void and unenforceable to that extent.
33 (d) This Act shall govern all relations between
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1 distributors and suppliers to the full extent consistent with
2 the constitutions of this State and of the United States.
3 Accordingly, Section 5-35, which clarifies existing rights
4 and obligations and establishes remedial provisions, applies
5 to all agreements between a distributor and a supplier (other
6 than agreements with an Illinois winery or a winery that has
7 annual case sales in the State of Illinois less than or equal
8 to 10,000 cases per year) whether those agreements were
9 entered into before or after the effective date of this Act.
10 Sections 5-15 through 5-30 of this Act shall govern all
11 agreements between a distributor and a supplier (other than
12 agreements with an Illinois winery or a winery that has
13 annual case sales in the State of Illinois less than or equal
14 to 10,000 cases per year), entered into after the effective
15 date of this Act, including any renewal of an agreement in
16 existence on or before the effective date of this Act.
17 Renewal of an agreement with a designated term or duration
18 shall mean (i) establishment of a new term, (ii) extension of
19 the agreement on any other basis, or (iii) shipment of wine
20 or spirits to the distributor after the expiration of the
21 designated term or duration. Renewal of an agreement in
22 place on a month to month, year to year, or other periodic
23 basis shall mean (i) continuation of the distributorship into
24 the next month, year, or other period, (ii) extension of the
25 distributorship on any other basis, or (iii) shipment of wine
26 or spirits to a distributor after the expiration of the month
27 or other periodic basis designated as the duration of the
28 distributorship in the agreement. Renewal of an agreement
29 without a designated term or duration shall mean shipment of
30 wine or spirits to a distributor after the effective date.
31 (e) In accordance with Section 1.31 of the Statute on
32 Statutes, the provisions of this Act are severable. If any
33 provision or interpretation of this Act, or the application
34 of such interpretation or provision to any distributorship,
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1 is held invalid, the application of the Act to persons or
2 circumstances other than those as to which it is held invalid
3 shall not be affected thereby.
4 Section 5-15. Cancellation and alteration of
5 distributorships.
6 (a) No supplier may cancel, fail to renew, otherwise
7 terminate, or alter on a discriminatory basis an agreement
8 unless the party intending that action has good cause for the
9 cancellation, failure to renew, termination, or alteration
10 and, in any case in which prior notification is required
11 under Section 5-20, the party intending to act has furnished
12 the prior notification and the affected party has not
13 eliminated the reasons specified in the notification for
14 cancellation, failure to renew, or termination within 90 days
15 after the sending of the notification. Each party shall make
16 a good faith effort to resolve disputes under this Section.
17 The burden of proving good cause is on the party who asserts
18 it.
19 (b) The rights confined by this Act may not be waived.
20 Any effort to do so is void.
21 Section 5-20. Notice of termination, cancellation, or
22 alteration.
23 (a) Except as provided in subsection (c) of this
24 Section, no supplier may cancel, fail to renew, otherwise
25 terminate, or alter an agreement unless the supplier
26 furnishes prior notification to the affected party in
27 accordance with subsection (b).
28 (b) The notification required under subsection (a) shall
29 be in writing and sent to the affected party by certified
30 mail not less than 90 days before the date on which the
31 agreement will be cancelled, not renewed, otherwise
32 terminated, or altered. The notification shall contain (i) a
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1 statement of intention to cancel, fail to renew, otherwise
2 terminate, or alter an agreement, (ii) a complete statement
3 of reasons therefore, including all data and documentation
4 necessary to fully apprise the distributor of the reasons for
5 the action, (iii) the date on which the action shall take
6 effect, and (iv) shall provide that the distributor has 60
7 days in which to rectify any claimed deficiency. If the
8 deficiency is rectified within 60 days, the notice shall be
9 void.
10 (c) A supplier may cancel, fail to renew, or otherwise
11 terminate an agreement without furnishing any prior
12 notification for any of the following reasons:
13 (1) Distributor's assignment for the benefit of
14 creditors, or similar disposition, of substantially all
15 of the assets of such party's business.
16 (2) Insolvency of distributor or the institution of
17 proceedings in bankruptcy by or against the distributor.
18 (3) Dissolution or liquidation of the distributor.
19 (4) Distributor's conviction of, or plea of guilty
20 or no contest to, a charge of violating a law or
21 regulation in this State that materially and adversely
22 affects the ability of either party to continue to sell
23 wine or liquor in this State, or the revocation or
24 suspension of a license or permit to sell wine or liquor
25 in this State.
26 (d) The notification required under subsection (a) shall
27 be sent not less than 10 days before the date of the
28 cancellation, non-renewal, termination, or alteration of the
29 notice if the notice is based on (i) failure to pay any
30 account when due and upon demand by the supplier for such
31 payment, in accordance with agreed payment terms, or (ii) bad
32 faith in the performance of the distributorship agreement.
33 If the notice is based on a failure to pay any account, the
34 distributor shall have 10 days in which to remedy the
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1 default. If the default in payment is remedied within 10
2 days, the notice shall be void.
3 Section 5-25. Action for damages and injunctive relief.
4 Parties to a distributorship may bring an action in any court
5 of competent jurisdiction for damages sustained as a
6 consequence of the violation, and may also be granted
7 injunctive relief against unlawful termination, cancellation,
8 nonrenewal, or other harm. For agreements entered into or
9 renewed after the effective date of this Act, this remedy is
10 an addition to the remedies provided in Section 5-35. It is
11 the policy of this State to avoid unfair or wrongful
12 terminations. Therefore, in establishing the right to
13 injunctive relief, it shall not be necessary to establish the
14 existence of irreparable harm or an inadequate remedy at law.
15 Notwithstanding any provisions of any agreement between a
16 supplier and a distributor, the venue for any such action
17 shall be at the location of the distributorship and this Act
18 shall apply.
19 Section 5-30. Application to arbitration agreements. An
20 agreement between a supplier that is not an Illinois winery
21 or a winery that has annual case sales in the State of
22 Illinois less than or equal to 10,000 cases per year and a
23 distributor providing for binding arbitration of disputes
24 shall be valid and enforceable in accordance with the Federal
25 Arbitration Act. In the event that a dispute concerning the
26 existence of good cause for a termination, cancellation,
27 nonrenewal, or other harm is resolved through arbitration,
28 the definition of good cause and the substantive provisions
29 of this Act shall apply.
30 Section 5-35. Procedural provisions; good faith; role of
31 Liquor Control Commission.
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1 (a) This Section clarifies existing rights and
2 obligations and establishes remedial procedures applicable to
3 registrations under Section 6-9 of the Liquor Control Act of
4 1934.
5 (b) Under existing Illinois common and statutory law,
6 suppliers, other than (i) Illinois wineries or (ii) wineries
7 that have annual case sales in the State of Illinois less
8 than or equal to 10,000 cases per year, who have or should
9 have registered names of distributors under Section 6-9 of
10 the Liquor Control Act of 1934, granting or confirming
11 distributors rights to sell at wholesale in this State, have
12 an obligation to act in good faith in all aspects of the
13 registration and distributorship relationship, without
14 discrimination or coercion under threat of retaliation or
15 termination in bad faith, and in conformity with any
16 emergency or final regulations issued by the Liquor Control
17 Commission pursuant to Section 3-12 or 6-19 or other
18 applicable provision of the Liquor Control Act of 1934 or by
19 the Department of Revenue. Under the existing obligation to
20 act in good faith, no registration or obligation to register
21 under Section 6-9 may be terminated, nor may a supplier that
22 is not an Illinois winery or a winery that has annual case
23 sales in the State of Illinois less than or equal to 10,000
24 cases per year fail to renew or extend a product, name,
25 brand, registration, or an agreement with a distributor
26 except by acting in good faith in all aspects of the
27 relationship, without discrimination or coercion, and not in
28 retaliation or as a result of the distributor's exercise of
29 its right to petition the General Assembly, the Congress, or
30 any other unit or form of government for any purpose, to any
31 end, or for or against any proposition, provision, amendment,
32 bill, resolution, judgment, decision, rule, regulation, or
33 interpretation.
34 (c) In order to enforce the existing obligation of good
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1 faith with respect to registrations under Section 6-9, the
2 Commission shall have power to:
3 (1) Prohibit or suspend any supplier that is not an
4 Illinois winery or a winery that has annual case sales in
5 the State of Illinois less than or equal to 10,000 cases
6 per year or its successors or assigns found to have
7 flagrantly or repeatedly violated the obligation
8 described in this Section from selling any product or
9 products governed under the Liquor Control Act of 1934
10 and the Twenty-First Amendment to the United States
11 Constitution in Illinois.
12 (2) Order the supplier, if the supplier is not an
13 Illinois winery or a winery that has annual case sales in
14 the State of Illinois less than or equal to 10,000 cases
15 per year, to continue providing products to a distributor
16 at prices and quantities in effect for the
17 distributorship prior to any termination or failure to
18 renew that becomes the subject of a dispute or
19 administrative proceedings under this Section until the
20 matters in dispute are determined by an order which is
21 final and non-reviewable.
22 Orders of the Liquor Control Commission entered under
23 this Section shall be deemed orders as to which an emergency
24 exists.
25 (d) Notwithstanding Section 5-30 of this Act, any
26 aggrieved party under this Section may apply to the
27 Commission for a finding that another party has violated this
28 Section and request relief.
29 (e) Orders entered by the Commission under this Section
30 shall be reviewable by the Circuit Court under the terms of
31 the Administrative Review Law. In accordance with Section
32 3-110 of the Administrative Review Law, findings and
33 conclusions of the Commission shall be held to be prima facie
34 true and correct.
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1 (f) No court shall enter a stay, restraining order,
2 injunction, mandamus, or other order that has the effect of
3 suspending, delaying, modifying, or overturning a Commission
4 finding or determination under this Section before a full
5 hearing and final decision on the merits of the Commission
6 ruling, finding, or order.
7 ARTICLE 10
8 SOFT DRINK INDUSTRY FAIR DEALING ACT
9 Section 10-1. Short title. This Article may be cited as
10 the Soft Drink Industry Fair Dealing Act. All references in
11 this Article 10 to this Act mean the Soft Drink Industry Fair
12 Dealing Act.
13 Section 10-5. Definitions. As used in this Act:
14 "Distribution agreement" means any contract, appointment,
15 agreement, course of dealing, or arrangement, express or
16 implied, whether oral or written, for a definite or
17 indefinite period, between a supplier and a distributor
18 pursuant to which the distributor has been granted the right
19 to (i) directly or through a cooperative or association of
20 which the distributor is a member, bottle or can one or more
21 soft drink beverages or process soft drink beverage
22 concentrate into beverage syrup, and (ii) sell, distribute,
23 or deliver such soft drink beverages or soft drink beverage
24 syrup under trademarks owned or licensed by the supplier.
25 "Distributor" means a person in this State who (i)
26 directly or through a cooperative or association of which the
27 person is a member, bottles or cans one or more soft drink
28 beverage or processes soft drink beverage concentrate into
29 beverage syrup, and (ii) sells, distributes, or delivers such
30 soft drink beverages or soft drink beverage syrup under
31 trademarks owned or licensed by a supplier.
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1 "Distributorship" means a business relationship between a
2 supplier and a distributor established pursuant to a
3 distribution agreement. Except as otherwise expressly
4 provided in this Act, the term "distributorship" does not
5 include a partnership, joint venture, corporation, limited
6 liability company, or other entity owned in whole or in part
7 by a supplier.
8 "Good cause" means the failure of a distributor to comply
9 substantially with essential and reasonable requirements
10 imposed upon the distributor by a distribution agreement or
11 bad faith in the performance of a distribution agreement.
12 The requirements may not be discriminatory either by their
13 terms or in the methods or effects of enforcement as compared
14 with requirements imposed upon other distributors. The
15 requirements may not be inconsistent with this Act or in
16 violation of any law or regulation. The failure of a
17 distributor to assent to any amendment, modification, or
18 change in the terms of a distribution agreement that would
19 have the effect of materially and adversely affecting the
20 value of the rights conferred upon the distributor by the
21 distribution agreement shall not constitute good cause. For
22 purposes of this Act, any amendment, modification, or change
23 in the terms of a distribution agreement that impairs,
24 restricts, or eliminates, in whole or in part, the
25 distribution or delivery rights of a distributor under the
26 distribution agreement shall be deemed to materially and
27 adversely affect the value of the rights conferred upon the
28 distributor.
29 "Good faith" means honesty in fact and the observation of
30 reasonable commercial standards for fair dealing in trade.
31 "Person" means a natural person, partnership, joint
32 venture, corporation, limited liability company, or other
33 entity and includes heirs, assigns, successors, personal
34 representatives, and guardians.
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1 "Soft drink" means a non-alcoholic, carbonated beverage
2 made from a concentrate, syrup, or other beverage base.
3 "Soft drink products" means ready-to-use soft drinks,
4 whether in bottles, cans, or other containers and soft drink
5 beverage syrup for use in servicing fountain equipment and
6 cup vending machines dispensing soft drinks.
7 "Supplier" means a person engaged in the manufacture or
8 marketing of soft drink beverage concentrate, syrup, or other
9 soft drink beverage base for use in the preparation of soft
10 drink products sold under trademarks owned or licensed by
11 such person.
12 Section 10-10. Legislative declarations; construction;
13 variation by contract.
14 (a) The General Assembly makes the following findings
15 and declarations:
16 (1) The soft drink product industry is dominated by
17 a small number of suppliers which in many instances
18 control large processing, bottling, canning, and
19 distribution operations. Distributors, on the other
20 hand, often are comparatively small, family-owned
21 businesses.
22 (2) Distributors of soft drink products in the
23 State of Illinois have been and are required to make
24 substantial capital investments in plant, property, and
25 equipment in order to fulfill their obligations under
26 distribution agreements. Distributors must rely upon the
27 continuing right to sell and distribute soft drink
28 products to recover their investments and to obtain a
29 reasonable return on those investments.
30 (3) Distributorship relationships in the State of
31 Illinois vitally affect the general economy of the State
32 and the public's interest in the fair, efficient, and
33 competitive distribution of soft drink products. Some
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1 suppliers have unfairly used their economic power to
2 coerce distributors to alter their business practices and
3 to surrender valuable rights under their distribution
4 agreements, including the right to sell, distribute, and
5 deliver soft drink products to large retail accounts.
6 Such actions threaten the ability of distributors to
7 continue to serve their remaining customers, which
8 consist in large part of small businesses such as
9 restaurants, convenience stores, service stations, and
10 schools, all to the great prejudice and harm of the
11 citizens of the State of Illinois.
12 (4) Protecting distributors against unfair
13 treatment by suppliers, who inherently have superior
14 economic power and superior bargaining power in the
15 negotiation of distributorships and distribution
16 practices, is in the public interest.
17 (b) The purposes of this Act are to promote the public's
18 interest in the fair, efficient, and competitive distribution
19 of soft drink products by regulation and by the encouragement
20 of suppliers and distributors of soft drink products to
21 conduct their business relations toward these ends by:
22 (1) protecting distributors against unfair
23 treatment by suppliers who inherently have superior
24 economic power and superior bargaining power in the
25 negotiation of distributorships and distribution
26 practices;
27 (2) assuring that distributors are free to manage
28 their business enterprises;
29 (3) assuring suppliers and the public of continuing
30 service from distributors able to devote adequate efforts
31 and resources to the processing, bottling, canning,
32 distribution, and delivery of soft drink products as to
33 which they have been granted a distributorship; and
34 (4) providing distributors with rights and remedies
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1 in addition to those existing by contract or at common
2 law.
3 This Act shall be liberally construed and applied to
4 promote its underlying purposes.
5 (c) The provisions of this Act are of a public order and
6 therefore the rights established by this Act cannot be waived
7 or varied by contract or agreement. Any contract or
8 agreement purporting to do so or purporting to preclude the
9 application of this Act to any distributorship subject to
10 this Act is void and unenforceable to that extent.
11 (d) This Act provides distributors with rights and
12 remedies in addition to those existing by contract or common
13 law and reaffirms rights and remedies provided by contract or
14 common law.
15 (e) In accordance with Section 1.31 of the Statute on
16 Statutes, the provisions of this Act are severable. If any
17 provision of this Act, or the application of any provision of
18 this Act to any person or circumstance, is held invalid, such
19 invalidity shall not affect other provisions or applications
20 of this Act which can be given effect without the invalid
21 provision or application, and the application of this Act to
22 persons or circumstances other than those as to which it is
23 held invalid shall not be affected thereby.
24 Section 10-15. Cancellation and alteration of
25 distributorships.
26 (a) No supplier, directly or through any officer, agent,
27 employee, or representative, shall:
28 (1) cancel, fail to renew, or otherwise terminate a
29 distribution agreement without good cause to do so;
30 (2) unilaterally impose any amendment,
31 modification, or change in the terms of a distribution
32 agreement, or require or coerce a distributor to assent
33 to any amendment, modification, or change in the terms of
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1 a distribution agreement that would have the effect of
2 materially and adversely affecting the value of the
3 rights conferred upon the distributor by the distribution
4 agreement;
5 (3) fail to exercise good faith in the negotiation
6 of any amendment, modification, or change in the terms of
7 a distribution agreement, engage in retaliatory conduct
8 against a distributor for the exercise of a legal right,
9 or otherwise fail to exercise good faith in its dealings
10 with a distributor;
11 (4) discriminate in pricing, fees, charges or other
12 terms of the distributorship against any distributor that
13 withholds its assent to any amendment, modification, or
14 change in the terms of a distribution agreement that
15 would have the effect of materially and adversely
16 affecting the value of the rights conferred upon the
17 distributor by the distribution agreement;
18 (5) restrict or inhibit, directly or indirectly,
19 the right of free association among distributors for any
20 lawful purpose;
21 (6) fail to offer a distributor the right, within
22 its geographic territory, to (i) directly or through a
23 cooperative or association of which the distributor is a
24 member, bottle or can any new soft drink beverages
25 introduced by the supplier and process any new soft drink
26 beverage concentrate into beverage syrup, and (ii) sell,
27 distribute, and deliver such soft drink beverages or soft
28 drink beverage syrup under trademarks owned or licensed
29 by the supplier or offer a distributor such right on
30 terms and conditions less favorable than such right is
31 offered to any other distributor of the supplier,
32 including any distributor owned in whole or in part by
33 the supplier.
34 (b) No supplier who, pursuant to a distribution
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1 agreement, has granted a person the exclusive right in a
2 generally defined geographic area to (i) directly or through
3 a cooperative or association of which the person is a member,
4 bottle or can one or more soft drink beverages, or process
5 soft drink beverage concentrate into beverage syrup, and (ii)
6 sell, distribute, or deliver such soft drink beverages or
7 soft drink beverage syrup under trademarks owned or licensed
8 by the supplier, shall, directly or through any officer,
9 agent, employee, or representative, enter into an agreement
10 authorizing, permitting, contemplating, or providing for the
11 exercise of any of such rights in the same geographic area by
12 any other person.
13 Section 10-20. Notice of cancellation.
14 (a) Except as hereinafter provided in subsection (c), no
15 supplier may cancel, fail to renew, or otherwise terminate a
16 distribution agreement unless the supplier furnishes prior
17 notification to the affected party in accordance with
18 subsection (b).
19 (b) The notification required by subsection (a) of this
20 Section shall contain (i) a statement of the supplier's
21 intention to cancel, fail to renew, or otherwise terminate
22 the distribution agreement, (ii) a complete statement of the
23 reasons therefor, including all data and documentation
24 necessary to fully apprise the distributor of the reasons for
25 the action, and (iii) the date on which the action is
26 intended to take effect. The notification shall be in
27 writing and sent to the affected distributor by certified
28 mail not less than 90 days before the date on which the
29 supplier intends to cancel, fail to renew, or otherwise
30 terminate the distribution agreement, and shall provide the
31 distributor a reasonable period of time, in no event less
32 than 60 days from the date of delivery or posting of the
33 notice, within which to cure any claimed deficiency. If the
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1 reason for cancellation, nonrenewal, or other termination is
2 nonpayment of sums due under the distributorship, the
3 notification shall be sent not less than 30 days before the
4 date on which the supplier intends to cancel, fail to renew,
5 or otherwise terminate the distribution agreement, and the
6 distributor shall have 30 days from the date of delivery or
7 posting of the notice within which to cure the default. If
8 the deficiency is cured within the applicable period, the
9 notice shall be void.
10 (c) The notice requirements of this Section shall not
11 apply if the reason for cancellation, failure to renew, or
12 other termination of a distributorship agreement is:
13 (1) an assignment for the benefit of the
14 distributor's creditors or similar disposition of
15 substantially all of the assets of the distributor's
16 business;
17 (2) the insolvency of the distributor or the
18 institution of proceedings in bankruptcy by or against
19 the distributor; or
20 (3) the dissolution or liquidation of the
21 distributor.
22 Section 10-25. Transfer of business assets and stock.
23 No supplier, directly or through any officer, agent, employee
24 or representative, shall:
25 (a) unreasonably withhold or delay its consent, if
26 requested by a distributor, to any assignment, sale,
27 transfer, or other disposition of all or any portion of (i) a
28 distributor's business, assets, or stock, or of the
29 beneficial ownership or control of a distributor, or (ii) the
30 stock, beneficial ownership, or control of any other entity
31 owning or controlling a distributor;
32 (b) upon the death of a person owning or controlling a
33 distributor, deny approval of a transfer of ownership or
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1 control of the distributorship to a surviving spouse or adult
2 child of such person;
3 (c) upon the death of one of the partners of a
4 partnership operating the business of a distributor, deny the
5 surviving partner or partners of such partnership the right
6 to become a successor-in-interest to the distribution
7 agreement between the supplier and such partnership;
8 (d) unreasonably withhold or delay its consent, if
9 requested by a distributor, to any assignment, sale, or
10 transfer to the distributor of all or any portion of the
11 business, assets, or stock of any other person who has been
12 granted the right to (i) directly or through a cooperative or
13 association of which the person is a member, bottle or can
14 one or more soft drink beverages or process soft drink
15 beverage concentrate into beverage syrup, and (ii) sell,
16 distribute, or deliver soft drink beverages or soft drink
17 beverage syrup under trademarks owned or licensed by the
18 supplier, where the distributor and such other person have
19 freely negotiated such an assignment, sale, or transfer.
20 Section 10-30. Reasonable compensation.
21 (a) Any supplier that (i) cancels, fails to renew, or
22 otherwise terminates any distribution agreement, or (ii)
23 unlawfully denies approval of or unreasonably withholds
24 consent to any assignment, transfer, or sale of a
25 distributor's business, assets, stock, or other ownership
26 interest in a distributor, shall (i) pay the distributor the
27 fair market value of that portion of the distributor's
28 business that the supplier has cancelled, failed to renew, or
29 otherwise terminated, or (ii) pay the distributor or other
30 aggrieved person the fair market value of that portion of the
31 business, assets, stock, or other ownership interest sought
32 to be assigned, transferred, or sold. Fair market value shall
33 include, but shall not be limited to, the value of the
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1 goodwill associated with the business, assets, stock, or
2 other ownership interest valued hereunder, and such fair
3 market value shall be determined without regard to any
4 marketability, minority interest, or other similar discount
5 or reduction.
6 (b) If a supplier and a distributor or other aggreived
7 person are unable to agree on the reasonable compensation to
8 be paid under subsection (a), any such party may maintain a
9 civil suit as provided in Section 10-35 of this Act or the
10 matter may, by mutual agreement of the parties, be submitted
11 to arbitration. Unless the parties otherwise agree, the
12 costs of arbitration shall be shared equally by the parties.
13 Section 10-35. Judicial remedies.
14 (a) In any action between the parties to a distribution
15 agreement where the existence of good cause for a supplier to
16 cancel, fail to renew, or otherwise terminate the
17 distribution agreement is at issue, the burden of proving
18 good cause shall be on the supplier.
19 (b) If a supplier engages in any of the practices
20 prohibited by Section 10-15 of this Act or violates any of
21 the provisions of Sections 10-20, 10-25, or 10-30 of this
22 Act, any aggrieved distributor or other aggrieved person may
23 bring an action against the supplier for damages sustained by
24 the distributor as a consequence thereof, together with the
25 actual costs and expenses of the action, including reasonable
26 attorney's fees. The aggreived distributor or other
27 aggrieved person also may be granted injunctive relief,
28 including injunctive relief against an unlawful termination,
29 cancellation, nonrenewal, or other termination of a
30 distribution agreement. The remedies provided in this
31 subsection (b) are cumulative with all other remedies
32 available to an aggrieved distributor or other aggrieved
33 person, including but not limited to the remedies provided
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1 for in subsections (c), (d) and (e) of this Section.
2 (c) Upon proper application to the court, a supplier,
3 distributor, or other aggreived person may bring an action to
4 determine reasonable compensation under Section 10-30 of this
5 Act.
6 (d) A supplier, distributor, or other aggrieved person
7 may bring an action for a declaratory judgment to determine
8 any controversy arising under this Act or out of the
9 distributorship relationship.
10 (e) If, in any action brought pursuant to this Act, a
11 finding is made that a party has not acted in good faith with
12 respect to any other party to a distribution agreement, an
13 appropriate penalty shall be assessed against that party and,
14 in addition, that party shall also be ordered to pay the
15 actual costs and expenses of the action, including reasonable
16 attorney's fees incurred by the other party.
17 (f) Any action brought pursuant to this Act shall be
18 brought in a court of this State or in a federal court in
19 this State vested with jurisdiction over the controversy.
20 Venue in any such action shall be in accordance with the Code
21 of Civil Procedure or Title 28 of the U.S. Code, as the case
22 may be, provided that in any action brought in a court of
23 this State, venue also shall exist in any county in which the
24 distributorship is located.
25 (g) Nothing in this Act shall (i) prohibit the parties
26 to any dispute from agreeing to arbitrate the dispute or (ii)
27 prohibit the enforcement of any arbitration agreement in
28 accordance with applicable law. In any such arbitration, the
29 definitions and substantive provisions of this Act shall
30 apply and the arbitrator may afford the remedies provided for
31 by this Act.
32 Section 10-40. Preliminary injunctions; temporary
33 restraining orders. In any action brought under this Act,
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1 for purposes of determining whether a preliminary injunction
2 or a temporary restraining order should be issued, (i) any
3 violation of this Act shall be deemed to constitute an
4 irreparable injury, (ii) the party seeking relief shall be
5 deemed to have no adequate remedy at law, and (iii)
6 enforcement of rights under this Act shall be deemed to be in
7 the public interest and to outweigh any competing interest.
8 Section 10-45. Application of this Act. This Act shall
9 govern all relations between suppliers and distributors to
10 the fullest extent consistent with the constitutions of this
11 State and of the United States. All provisions of this Act
12 which are declarative of or clarify existing law, including
13 the provisions of Section 10-15(a)(3) of this Act, apply to
14 all agreements between a supplier and a distributor whether
15 those agreements were entered into before or after the
16 effective date of this Act. In addition, this Act shall, to
17 the fullest extent permitted by law, apply (i) to conduct
18 occurring after the effective date of this Act, whether or
19 not such conduct relates to a distribution agreement entered
20 into before the effective date of this Act, and (ii) to
21 distribution agreements entered into or amended after the
22 effective date of this Act, including any renewal of a
23 distribution agreement in existence on or before the
24 effective date of this Act. Renewal of a distribution
25 agreement with a designated term or duration shall mean (i)
26 the establishment of a new term or duration, (ii) an
27 extension of the distribution agreement on any other basis,
28 or (iii) the shipment of soft drink concentrate or syrup to
29 the distributor after the expiration of the designated term
30 or duration. Renewal of a distribution agreement that
31 provides for a month to month, year to year, or other
32 periodic term or duration, shall mean (i) the continuation of
33 the distributorship into the next month, year, or other
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1 period commencing after the effective date of this Act, (ii)
2 an extension of the distribution agreement on any other
3 basis, or (iii) the shipment of soft drink concentrate or
4 syrup to a distributor after the expiration of the month,
5 year, or other period of the distribution agreement. Renewal
6 of any distribution agreement that does not have a designated
7 term or duration, or that is terminable at will or upon
8 notice, shall mean the shipment of soft drink concentrate or
9 syrup to a distributor after the effective date of this Act.
10 ARTICLE 95
11 SEVERABILITY
12 Section 95-95. Severability. In accordance with Section
13 1.31 of the Statute on Statutes, the provisions of this Act
14 are severable. If any provision or interpretation of this
15 Act, or the application of such interpretation or provision
16 to any distributorship, is held invalid, the application of
17 the Act to persons or circumstances other than those as to
18 which it is held invalid shall not be affected thereby.
19 ARTICLE 99
20 EFFECTIVE DATE
21 Section 99-99. Effective date. This Act takes effect
22 upon becoming law.".