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91_HB0152eng HB0152 Engrossed LRB9101262LDmb 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 HB0152 Engrossed -2- LRB9101262LDmb 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 HB0152 Engrossed -3- LRB9101262LDmb 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 HB0152 Engrossed -4- LRB9101262LDmb 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 HB0152 Engrossed -5- LRB9101262LDmb 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 HB0152 Engrossed -6- LRB9101262LDmb 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 HB0152 Engrossed -7- LRB9101262LDmb 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 HB0152 Engrossed -8- LRB9101262LDmb 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 HB0152 Engrossed -9- LRB9101262LDmb 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 HB0152 Engrossed -10- LRB9101262LDmb 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 HB0152 Engrossed -11- LRB9101262LDmb 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; HB0152 Engrossed -12- LRB9101262LDmb 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 HB0152 Engrossed -13- LRB9101262LDmb 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 HB0152 Engrossed -14- LRB9101262LDmb 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 HB0152 Engrossed -15- LRB9101262LDmb 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. HB0152 Engrossed -16- LRB9101262LDmb 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 HB0152 Engrossed -17- LRB9101262LDmb 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 HB0152 Engrossed -18- LRB9101262LDmb 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. HB0152 Engrossed -19- LRB9101262LDmb 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, HB0152 Engrossed -20- LRB9101262LDmb 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 HB0152 Engrossed -21- LRB9101262LDmb 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 HB0152 Engrossed -22- LRB9101262LDmb 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.