text:
    ENVIRONMENTAL SERVICES, INC., an Illinois corporation, Plaintiff, v. BELL LUMBER AND POLE COMPANY, a Minnesota corporation, Defendant.
    No. 84 C 6231.
    United States District Court, N.D. Illinois, E.D.
    Nov. 26, 1984.

      Daniel C. Meenan, Jr., David A. Axelrod, Feiwell, Galper, Lasky & Berger, Ltd., Chicago, Ill., for plaintiff.
    Sheldon A. Zabel, Ann Rae Heitland, Schiff, Hardin & Waite, Chicago, Ill., Hugh V. Plunkett III, David L. Hashmall, Pop-ham, Haik, Schnobrich, Kaufman & Doty, Ltd., Minneapolis, Minn., for defendant.
   ORDER

BUA, District Judge.

Before the Court is defendant’s motion to dismiss for lack of personal jurisdiction or, in the alternative, to transfer the case to the United States District Court for the District of Minnesota. For the reasons stated herein, defendant’s motion to transfer is granted and its motion to dismiss is denied.

I. FACTS

This is an action for fraud and misrepresentation in the execution of an agreement for certain waste disposal. The action was brought by Environmental Services, Inc. (ESI), which is an Illinois corporation with its principal place of business in Chicago. The defendant Bell Lumber and Pole Company (Bell) is a Minnesota corporation with its principal place of business in New Brighton, Minnesota. Venue is proper under 28 U.S.C. § 1391, and jurisdiction is proper under 28 U.S.C. § 1332.

Plaintiff’s claim arises out of a contract entered into by itself and defendant whereby plaintiff would remove from Bell’s property, treat and recycle approximately 20,-000 cubic yards of debris and soil. The contract specified no place for its performance and plaintiff was to take title to and delivery of the material upon removal from Bell’s premises in Minnesota. Plaintiff alleges certain oral representations by Bell regarding the nonhazardous nature of the waste. Plaintiff further alleges that Bell’s misrepresentations prevented its performance under the contract and caused it to incur expenses and damages pursuant to its attempted performance in Illinois.

II. DISCUSSION

28 U.S.C. § 1404(a) governs change of venue and provides in pertinent part:

(a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.

In order to meet the requirements of § 1404(a), the movant must establish “(1) that venue is proper in the transferor district; (2) that the transferor court has the power to transfer the case (that is, that the transferee court is in a district ‘where it might have been brought’); and (3) that the transfer is for the ‘convenience of the parties and witnesses in the interest of justice.’ ” Hotel Constructors, Inc. v. Seagrave Corp., 543 F.Supp. 1048, 1050 (N.D.Ill.1982). Requirements (1) and (2) are met in this case. Venue is proper in this district because plaintiff resides in Illinois for venue purposes and this action could have been brought in the District of Minnesota, which has proper venue and jurisdiction because defendant resides there under 28 U.S.C. §§ 1332 and 1391.

The Court now turns to requirement (3). To support a motion to transfer, the movant must show a “clear balance of inconvenience” in this district over the transferee district. Id.; see also SEC v. First National Finance Corp., 392 F.Supp. 239, 240 (N.D.Ill.1975). In determining whether the movant has met this burden, the Court must consider the factors specifically mentioned in § 1404(a) (convenience of the parties, convenience of the witnesses and the interests of justice in general) while also giving weight to plaintiff’s choice of forum.

1. Convenience of the Parties

Although under the common law doctrine of forum non conveniens, plaintiff’s choice of forum was an overriding factor entitled to considerable weight, the significance of that choice has diminished since the enactment of § 1404(a). Norwood v. Kirkpatrick, 349 U.S. 29, 32, 75 S.Ct. 544, 546, 99 L.Ed. 789 (1955); Hotel Constructors, Inc. v. Seagrave Corp., 543 F.Supp. at 1050. Additionally, plaintiff’s choice of forum has reduced value where the forum lacks any significant contact with the underlying cause of action. Cunningham v. Cunningham, 477 F.Supp. 632, 634 (N.D.Ill.1979). In such a case, it becomes just one of many factors to be viewed by the Court when making its determination of convenience. General Signal Corp. v. Western Electric Co., 362 F.Supp. 878, 880 (N.D.Ill.1973).

In the present case, the question of where the conduct underlying this action occurred is disputed. Plaintiff contends that the defendant’s misrepresentations caused the breach of contract and consequent damage in Illinois since that is where plaintiff’s attempted performance failed due to the alleged misrepresentations. Defendant argues that any alleged misrepresentation made for the purpose of inducing ESI to enter into the contract must have been made during the contract negotiations, all of which took place in Minnesota. The Court agrees with the defendant that the plaintiff’s claims of breach of contract and fraud rest on a question of contract formation and execution, which occurred for the most part during negotiations in Minnesota. For these reasons, Illinois is not conclusively where the cause of action arose and, therefore, plaintiff’s choice of forum will be given equal consideration along with the other factors which must be considered under § 1404.

2. Convenience of the Parties and Witnesses

Although § 1404(a) specifically póints to the convenience of both parties and witnesses, in the present ease, only the latter factor need by analyzed by the Court. The facts presented by this motion indicate that the convenience of the parties is neutral in this case. Both plaintiff and defendant will be inconvenienced if this action is brought in the other parties’ resident district and the financial strengths of the parties are equivalent.

In analyzing the convenience!of witnesses, the Court must look to the expenses of transportation and the length of time the witnesses will be absent from their jobs. In addition, this Court must consider not only the number of potential witnesses located in the transferor and transferee districts, but also the nature and quality of their testimony in relationship to the issues of the case. Midwest Precision Services v. PTM Industries, 574 F.Supp. 657, 659 (N.D.Ill.1983). At this stage, three issues are raised by the pleadings. The first issue is whether the parties to the contract contemplated that the waste disposed of would be nonhazardous. The second issue is whether, if the parties contemplated nonhazardous waste, the waste delivered by Bell was hazardous. The third issue is whether the parties contemplated that the waste would be disposed of in Illinois and therefore judged by Illinois standards, as well as federal standards.

Probably the most significant factual issue in this case is whether the parties meant for the term “waste” in the agreement to include hazardous waste. Bell intends to call several of its employees who were involved in the contract negotiations. All of these employees are residents of Minnesota. In addition, Bell intends to call employees of Circuit Laboratories and Interpoll Laboratories, both of which companies are located in Minnesota. Finally, the affidavit of Bell’s President, Merton Bell III, points to the importance of the testimony of James A. Kinsey, an employee of Waste Reduction, Inc. (ESI’s authorized agent in Minnesota), who initiated the contract negotiations in Minnesota with Bell. Kinsey and the employees of Circuit Laboratories and Interpoll Laboratories are residents of Minnesota and would not be within the subpoena power of this Court.

ESI argues that trial in Minnesota would deprive that court of the testimony of numerous Illinois residents who observed the attempted performance of ESI’s obligations under the contract in Illinois. ESI intends to call, among many others, Neil F. Harti-gan, the Attorney General of Illinois, and two judges from the Cook County Circuit Court, all of whom were involved in the State of Illinois’ successful attempt to prevent ESI’s disposal of the waste in Illinois. ESI also intends to call various employees at various waste testing laboratories in Illinois in order to show that the waste is hazardous under Illinois standards.

If the issue in this case were whether Bell’s waste is hazardous under Illinois standards, ESI’s list of witnesses would at least equal, if not outweigh, Bell’s list- of witnesses. However, that is not the issue in the case. The issue is one of contract formation in relation to the three issues discussed above. Since the contract itself is silent as to the place of performance and the nature of the waste as a condition of performance, Bell’s list of witnesses — who are Minnesota residents and who either participated in contract negotiations or in testing the material at the time of the contract’s execution — prevails over ESI’s list of Illinois witnesses.

The second issue of whether the waste delivered by Bell was hazardous points again to the testimony of witnesses in Minnesota. Plaintiff argues that this issue has already been determined in Illinois and therefore its list of Illinois witnesses should prevail. Plaintiff’s argument is not persuasive since the contract mentions no place of performance and it seems unlikely that Bell should be held to Illinois hazardous waste standards unless such an understanding was reached during the contract negotiations. This finding also disposes of the third issue in Bell’s favor. Further, since the contract’s formation took place in Minnesota, it is likely that Minnesota law would apply to questions of contract interpretation, as well as Minnesota hazardous waste standards at the time of delivery.

On balance, considering the nature and quality of the testimony of potential witnesses, the Court finds that when all potential issues raised by the complaint are considered, the convenience of the witnesses would best be served by the transfer of this case to the District of Minnesota.

3. Interest of Justice

The Court concludes that the final factor to be considered under § 1404(a) supports transfer to the District of Minnesota. Under Illinois conflict of law principles, Minnesota law will be applied to this action because Minnesota is the place of the contract’s making. P.S. & E., Inc. v. Selastomer Detroit, Inc., 470 F.2d 125, 127 (7th Cir.1972), citing Oakes v. Chicago Fire Brick Co., 388 Ill. 474, 58 N.E.2d 460 (1944). The question of the place of performance remains open to question as a matter of contract interpretation since the contract was silent as to it. Therefore, ESI’s attempted performance in Illinois does not necessarily mean that Illinois law will apply as the place of performance.

Additionally, the nature of the waste at the time of delivery may involve a question of Minnesota waste standards. These facts make transfer of the action appropriate. This is not because Minnesota law is uncertain, novel or complex, but merely because issues of local law are best construed by courts most familiar with them. Hotel Constructors, Inc. v. Seagrave Corp., 543 F.Supp. at 1052.

For the reasons stated above, the defendant’s motion to dismiss is denied and its motion to transfer is granted.

IT IS SO ORDERED.


source: Caselaw Access Project

author: WILLIAM T. HART, District Judge.

license: Public Domain

text:
    UNR INDUSTRIES, INC., et al., Plaintiffs, v. CONTINENTAL INSURANCE COMPANY, et al., Defendants.
    No. 83 A 2523, etc.
    United States District Court, N.D. Illinois, E.D.
    Nov. 30, 1984.

      Malcolm M. Gaynor, Richard M. Bendix, Jr., Schwartz, Cooper, Kolb & Gaynor Chtd., Mark D. Romness, William S. Leav-itt, Chicago, Ill., Ronald A. Oster, Joseph O’Malley, Paul, Hastings, Janofsky & Walker, Los Angeles, Cal., for debtor in possession.
    J. William Cuncannan, Sarah M. Stege-moeller, DeFrees & Fiske, Chicago, Ill., for Official Creditors Committee.
    Peter C. John, Douglas J. Lipke, Matthew J. Gehringer, Phelan, Pope & John, Ltd., Louis W. Levit, Levit & Mason, Ltd., Chicago, Ill., for Zurich Ins. Co.
    Lloyd E. Williams, Anthony P. Kataus-kas, Jacobs, Williams & Montgomery, Ltd., Chicago, Ill., for Commercial Union Ins. Co.
    John G. Jacobs, Robert Plotkin, Jonah Orlofsky, Plotkin & Jacobs, Chicago, Ill., Stuart Parker, Siff & Newman, P.C., New York City, for American Mut. Liability Co.
    Daniel J. Pope, Coffield, Ungaretti, Harris & Slavin, Chicago, Ill., for American Re-Insurance Co.
    Thomas L. Aries, Merrill C. Hoyt, Harvey J. Cohen, Aries, Hoyt & Williams, Stanley B. Block, Donald W. Jenkins, Vedder, Price, Kaufman & Kammholz, Chicago, Ill., for Continental Ins. Co. and Underwriters Adjusting Co.
    Thomas C. Walker, James E. O’Halloran, Jr., O’Halloran, Lively & Walker, North-brook, Ill., for Corroon & Black of Illinois, Inc.
    Gerald G. Saltarelli, Ronald Butler, James I. Rubin, Ellen M. Babbit, Butler, Rubin, Newcomer, Sattarelli & Boyd, Michael J. Gallagher, Cassiday, Schade & Gloor, Chicago, Ill., for Bituminous Cas. Corp.
    Philip J. McGuire, Michael E. Dowd, Dowd & Dowd, Ltd., Chicago, Ill., for Northbrook Excess and Surplus Ins. Co.
    Philip C. Stahl, Donald Vogelsang, Gary M. Elden, Reuben & Proctor, Chicago, Ill., for Nat. Sur. Corp. and Fireman’s Fund Ins. Co.
    Perry L. Fuller, Robert E. Nord, Fritz K. Huszagh, Hinshaw, Culbertson, Moelmann, Hoban & Fullér, Chicago, Ill., for Continental Cas. Ins. Co.
    Patrick W. O’Brien, Kenneth J. Jurek, Hope G. Nightingale, Mayer, Brown & Platt, Chicago, Ill., for Ins. Service Office, Inc.
    Donald M. Haskell, Michael Sehr, William F. Ryan, Haskell & Perrin, Chicago, Ill., for Home Ins. Co.
    Michael J. Dolesh, David M. Spector, Is-ham, Lincoln & Beale, Chicago, Ill., for Employers Reinsurance Co.
   MEMORANDUM OPINION AND ORDER

WILLIAM T. HART, District Judge.

UNR Industries, Inc. and its affiliates are debtors in Chapter 11 bankruptcy proceedings in this district. As part of those proceedings UNR initiated this adversary action to enforce its rights as an insured under numerous liability insurance policies with the various defendant insurance companies, and for other relief. After the decision in Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982), and before the Bankruptcy Amendments of 1984 this court withdrew the reference of the adversary proceeding. Presently before the Court are several motions to dismiss directed against the two federal law counts and some of the state law counts in UNR’s first amended complaint.

I. Count 1

Count 1 alleges that defendant insurance companies Continental, Bituminous, and Zurich (the “primary carriers’’), along with Underwriters Adjustment Company, violated Section One of the Sherman Act, 15 U.S.C. § 1, by conspiring to deprive UNR of its right to full indemnification for and defense of asbestos-related claims under policies previously issued by the primary carriers. Specifically, UNR alleges that defendants agreed to a formula capping the liability of each primary carrier for asbestos claims at a stated percentage of UNR’s total liability, thereby forcing UNR to pay at least 35% of both the cost of defending asbestos claims and the cost of any judgments. This formula is claimed to be in violation of each, defendant’s contract of insurance which provides for full indemnification and defense of UNR in asbestos claims. Defendants also allegedly misled UNR as to the availability of full indemnification and defense under its policies. UNR claims defendants forced it to comply with their formula by misleading UNR as to the meaning of their policies, threatening to withdraw all indemnification for and defense of asbestos claims, and threatening to institute litigation concerning UNR’s policies. Continental, as the only defendant whose policy was current at the time of the alleged conspiracy, is said to have agreed to enforce the agreement by threatening to cancel its policies midstream, demand higher premiums, and impose a $15,-000 deductible for all asbestos claims arising after January 1, 1976.

UNR claims that defendants have made good on the above threats. Defendants have sued UNR concerning the interpretation of UNR’S policies. Continental did in fact impose a $15,000 deductible in early 1976, by 1978 had increased the deductible to $30,000, and subsequently added an asbestos exclusion to its policies. When in 1981 UNR demanded full indemnification for and defense of its asbestos claims Zurich, Bituminous and Continental responded by terminating all payments for indemnification and defense.

The motion to dismiss count 1 has two bases. Defendants first argue the activities alleged do not violate the antitrust laws. Second, they argue that even if they have violated the antitrust laws their activities are exempt from antitrust scrutiny under the McCarran-Ferguson Act, 15 U.S.C. §§ 1011-15.

UNR’s answer to defendants’ motion offers three theories to support its claim that defendants have violated the antitrust laws. The first and most strongly argued theory is that defendants’ combined refusal to abide by their contracts of insurance constitutes “retroactive price-fixing.” If the price-fixing label is applicable to these facts then the complaint adequately states a claim under the antitrust laws, since price-fixing is a per se antitrust violation. Arizona v. Maricopa County Medical Society, 457 U.S. 332, 102 S.Ct. 2466, 73 L.Ed.2d 48 (1982).

To bring defendants’ actions under the heading of price-fixing, UNR first points out that the price paid and the value received by a consumer are economically equivalent. From that equivalence UNR-argues that competitors can price-fix in two different ways. The first and traditional method is for competing sellers to agree on a price (usually higher than that which competitive forces would have set) to be charged in the future. The second method, and the method charged in UNR’s complaint, is for sellers to sell at a competitive price but then agree among themselves to deliver less of the product or service than is called for by the sale contract. Put simply, UNR’s argument is that charging more than something is worth and delivering less than what was bought both- have the same result: the consumer gets back less value than he paid out. Since both methods give the same bad result, argues UNR, both methods deserve the same bad label: price-fixing.

The Seventh Circuit has recently stated that the “mere attachment of a per se label by a plaintiff to defendants’ conduct does not automatically invoke the per se doctrine and eliminate the requirement that the plaintiff allege and prove the anticom-petitive effects of defendants’ conduct. The defendants’ conduct must be analyzed to determine whether it should receive per se treatment.” Bunker Ramo Corp. v. United Business Forms, Inc., 713 F.2d 1272, 1284 (7th Cir.1983).

Here, such analysis reveals defendants’ conduct is not per se illegal. The flaw in UNR’s argument is that it confuses the conduct the antitrust laws are aimed at with what they try to achieve. The' antitrust laws are based on the assumption that consumers are best served by a competitive market and to that extent can be said to promote consumer welfare. Reiter v. Sonotone Corp., 442 U.S. 330, 343, 99 S.Ct. 2326, 2333, 60 L.Ed.2d 931 (1979); Sutliff, Inc. v. Donovan Companies, 727 F.2d 648 (7th Cir.1984). But the Sherman Act does not outlaw every action that hurts consumer welfare, it outlaws “[ejvery contract, combination ... or conspiracy [] in restraint of trade." 15 U.S.C. § 1 (emphasis supplied). As the Supreme Court has said, the antitrust laws do “not purport to afford remedies for all torts committed by or against persons engaged in interstate commerce.” Hunt v. Crumboch, 325 U.S. 821, 826, 65 S.Ct. 1545, 1548, 89 L.Ed. 1954 (1945). See also Sutliff, 727 F.2d at 655 (“the Sherman Act did not make ordinary business torts federal torts for which treble damages could be recovered’). Therefore, while every antitrust violation is presumed to harm consumers, not every harm to a consumer is or can be presumed to be an antitrust violation. All UNR’s argument shows is that it is a consumer and has been harmed by conspiring sellers, but that allegation is not sufficient to state an antitrust claim.

Another way to see the flaw in UNR’s argument is to remember that per se status (which is what UNR is after) has been conferred on price-fixing not merely because it harms consumers (which it does) but because it harms consumers in a particular way — by (almost always) restraining competition. Maricopa, 457 U.S. 332, 102 S.Ct. 2466, 73 L.Ed.2d 48. The price-fixing label can by analogy attach to conduct more subtle than a simple conspiracy to directly fix prices, Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 100 S.Ct. 1925, 64 L.Ed.2d 580 (1980) (agreement to stop selling on credit); In re Wheat Rail Freight Rate Antitrust Litigation, 579 F.Supp. 517 (N.D.Ill.1984) (agreement on how freight rates would be calculated), but the analogy is successful only if the challenged conduct is, like traditional price-fixing, virtually certain to reduce competition. Catalano, 446 U.S. at 649-50, 100 S.Ct. at 1928-29; Bunker Ramo Corp. v. United Business Forms, Inc., 713 F.2d 1272, 1284 (7th Cir.1983) (“only conduct that is ‘manifestly anticompetitive’ will be considered a per se offense”). UNR’s analogy, by contrast, rests on the fact that defendants’ conduct is broadly like traditional price-fixing in the sense that it harmed a consumer. What UNR has not shown is that defendants’ conduct is like traditional price-fixing in that it “would always or almost always tend to restrict competition and decrease output.” Broadcast Music, Inc. v. CBS, 441 U.S. 1, 19-20, 99 S.Ct. 1551, 1562-63, 60 L.Ed.2d 1 (1979). Absent such a showing, defendants’ conduct cannqt be per se illegal.

Rejecting UNR’s per se argument does not, of course, end the inquiry. The question remains as to whether any of the facts alleged could constitute an unreasonable restraint of trade under a rule of reason analysis. UNR’s second and third theories attempt to show such an unreasonable restraint. Its first argument on this issue is brief but to the point:

A rule of reason analysis of the alleged facts would demonstrate that three competitors and their agent, all of whom should have been servicing UNR at the same time, agreed to eliminate any possibility of competition in the provision of such servicing. They agreed to withhold benefits; to apply deductibles retroactively to cover a period when no deductibles were included in the policies, and to eliminate coverage entirely when UNR demanded the full coverage to which it was entitled. UNR was required to pay, not only for the original policies, but [for] the very benefits for which it had [already] paid.

(UNR’s answer brief at 20.)

UNR’s third theory, though phrased in terms of boycott and coercion, is based on essentially the same facts as its second theory and therefore the two theories will be analyzed together.

The problem with both these theories is that they fail to show that defendants’ conduct had any effect on competition. This is not a situation where defendants were competing to get or even keep UNR’s business — they already had UNR’s business. Defendants’ duties are therefore not derived from the antitrust laws’ vision of how competitors should behave; they are derived from the contracts each defendant had with UNR. Of course it is always open to competitors to provide more than their contract requires, and the Supreme Court has apparently recognized that agreements foreclosing that possibility violate the antitrust laws. St. Paul Fire & Marine Ins. Co. v. Barry, 438 U.S. 531, 553, 98 S.Ct. 2923, 2935, 57 L.Ed.2d 932 (1978). However, UNR’s complaint and answer make clear that it is not complaining of a lack of competition in extra-contractual service. Its complaint is that defendants have failed to do that which their contracts require. Since defendants’ conduct towards UNR is fixed by each defendant’s contract, there is no role for competition to play. If one of these defendants decided to defend and indemnify UNR against a particular asbestos claim, that decision would not be made because free market forces compelled it; it would be made because that defendant’s contract required it. Similarly, if one of these defendants wrongfully refused to defend and indemnify UNR, that refusal is not wrongful because it represents a lessening of competition but rather because it represents a breach of contract.

UNR also asserts that while each of these defendants could have breached their contracts individually without violating the antitrust laws, a conspiracy to breach is a violation. However, that assertion misapprehends the reason why conspiracies and simultaneous individual acts are treated differently under the Sherman Act. As already noted, the antitrust laws are designed to protect competition. If competitors simultaneously but independently raised their prices, the antitrust laws assume that since there was no conspiracy the price increase must have been caused by market forces and is therefore unobjectionable. That is, a conspiracy is a necessary condition for a violation of Section One of the Sherman Act. Monsanto Co. v. Spray-Rite Service Corp., — U.S. -, 104 S.Ct. 1464, 1469-71, 79 L.Ed.2d 775 (1984). However, a conspiracy is not a sufficient condition as UNR seems to assume. Accepting that further assumption would mean that every conspiracy to commit some kind of wrong in the course of business would ipso facto constitute a restraint of trade in violation of the Sherman Act. That result was certainly not intended by the Sherman Act’s framers, Sutliff, Inc. v. Donovan Companies, 727 F.2d 648, 655 (7th Cir.1984). Moreover, it is simply not true that every such conspiracy has the effect of restraining trade, and this case is a good example. UNR does not allege that defendants’ conspiracy affected the market for insurance policies or any other market. The only effect alleged, ignoring UNR’s conclusory allegations, is a simple breach of contract and the concomitant harm to UNR. Even assuming that defendants would have been unable to successfully breach their contracts unless they acted in concert, that fact does not transform a breach of contract into a restraint of trade.

The essential difference between an agreement not to compete and an agreement not to honor contracts makes the cases principally relied on by UNR inappo-site. In Radiant Burners v. Peoples Gas Co., 364 U.S. 656, 81 S.Ct. 365, 5 L.Ed.2d 358 (1961), the Court held that a conspiracy to make the sale of plaintiff’s gas burner impossible by refusing to provide gas to plaintiff’s purchasers stated a claim under the Sherman Act. In St. Paul Fire & Marine Ins. Co. v. Barry, 438 U.S. 531, 98 S.Ct. 2923, 57 L.Ed.2d 932 (1978), the claim was that defendants conspired to prevent St. Paul’s policy holders from getting medical malpractice insurance from any other insurance company. The conduct involved in these cases was a potential violation of the Sherman Act not simply because a conspiracy was involved and a competitor or consumer was injured as a result. Those cases involved an attempt to-prevent one or more competitors from making contracts in the future; that is, from engaging in trade. Since UNR makes no allegation that anyone was restrained from engaging in trade (as opposed to abiding by a contract), those cases do not support UNR’s position.

Put simply, UNR’s argument is an attempt to avoid the requirement that anti-competitive effect be pleaded and adequately supported by factual allegations. See Bunker Ramo, 713 F.2d at 1284; Havoco of America v. Shell Oil Co., 626 F.2d 549, 555 (7th Cir.1980). UNR’s view is that every conspiracy that harms a consumer violates the Sherman Act. For the reasons stated above, that theory is simply untenable. Without adequate allegations of anti-competitive effect count 1 is fatally defective and must be dismissed.

II. Count 2

The second count alleges that defendant insurance companies American Mutual, Fireman’s Fund, National Surety, Commercial Union, Falcon, and defendant Insurance Services Office conspired together with other members of the insurance industry to deprive UNR and other asbestos manufacturers of the full defense of asbestos claims to which UNR and the others were entitled under their policies, to impose fraudulent policy interpretations on their insureds so as to avoid their obligations under those policies, and to disrupt and eliminate the market for occurrence liability policies so that they could market a claims-made policy which provides less coverage at higher premiums. UNR also alleges that these objectives were promoted by withdrawing coverage from insureds, by “boycott,” and by “instituting litigation.” First amended complaint at par. 39(e).

Count 2 charges, with one exception, the same type of conduct charged in count 1. Not surprisingly, UNR’s answer to the motion to dismiss count 2 is in great measure identical to its answer to the motion to dismiss count 1, though the main emphasis is placed on the boycott theory rather than the price-fixing theory. No reason is given for finding an antitrust violation that was not rejected above, and therefore the similar charges in count 2 fail for the same reason: insufficient allegation of anticompetitive effect.

The one new charge made in count 2 is that the count 2 defendants conspired to refuse to issue occurrence policies. UNR’s answer brief makes no mention of that charge, apparently because UNR concedes that a joint decision by insurers to offer one type of policy rather than another is the type of decision that is protected by the McCarran-Ferguson Act.

The McCarran-Ferguson Act exempts from the antitrust laws conduct which is the business of insurance, is regulated by state law, and does not amount to boycott, coercion or intimidation. 15 U.S.C. §§ 1012-1013. Union Labor Life Insurance Co. v. Pireno, 458 U.S. 119, 129, 102 S.Ct. 3002, 3008, 73 L.Ed.2d 647 (1982), sets forth the three criteria for determining whether a particular practice constitutes the business of insurance within the McCarran-Ferguson Act:

first, whether the practice has the effect of transferring or spreading a policyholder’s risk; second, whether the practice is an integral part of the policy relationship between the insurer and the insured; and third, whether the practice is limited to entities within the insurance industry.

It is obvious that an agreement to change the type of policy offered is the business of insurance. The type of coverage offered directly affects the spreading of risk, is at the very heart of the policy relationship, and the agreement is limited to insurance companies.

Turning to the second requirement, there is little question that this conduct is regulated by state law. Illinois has a comprehensive insurance code, Ill.Rev. Stat. ch. 73, § 1 et seq. (1981), which is sufficient to satisfy this requirement. Klamath-Lake Pharmaceutical Ass’n v. Klamath Medical Service Bureau, 701 F.2d 1276, 1287 (9th Cir.), cert. denied, — U.S. -, 104 S.Ct. 88, 78 L.Ed.2d 96 (1983).

Finally, an agreement to change to a new type of policy is not a boycott and does not constitute coercion or intimidation. In St. Paul Fire & Marine Ins. Co. v. Barry, 438 U.S. 531, 98 S.Ct. 2923, 57 L.Ed.2d 932 (1978) the Court held that refusing to offer any coverage at all would be a boycott and hence not exempt under the McCarran-Ferguson Act. However, the Court explicitly recognized that fixing “rates or terms of coverage” would not constitute a boycott. Id. at 544, 98 S.Ct. 2923, 57 L.Ed.2d 932. See also Grant v. Erie Ins. Exchange, 542 F.Supp. 457 (M.D.Pa.1982), aff'd, 716 F.2d 890 (3d Cir.1983). Therefore, the conspiracy to refuse to issue occurrence policies, while it might violate the antitrust laws as a concerted refusal to deal, is exempt from antitrust scrutiny under the McCarran-Ferguson Act. Since no antitrust allegations remain in count 2, it is dismissed.

III. Count. 4

Count 4 charges a breach of an “implied covenant of good faith and fair dealing” against defendant insurance companies Continental, Bituminous, Zurich, Home, Commercial Union, Falcon, Continental Casualty Company, National Surety, Fireman’s Fund and American Mutual. Count 4 requests compensatory and punitive damages from each of the above-named defendants.

Count 4 is based on the same, facts alleged in count 1 plus the charges of breach of insurance contract made in count 3. Detailed review of the facts is unnecessary since the motion to dismiss is aimed at count 4’s legal, not factual, basis. The five moving defendants claim that any recovery under this theory is preempted by § 155 of Illinois Insurance Code of 1935 (Ill.Rev. Stat. ch. 73, § 767 (1981)), which authorizes a court to award attorneys’ fees plus a statutorily defined amount (in no event to exceed $5,000) when the court finds that the insurance company’s action in refusing to recognize its liability under its insured’s policy was “vexatious and unreasonable.”

This Court has previously held that § 155 preempts any common-law tort recovery against an insurer. Gibe v. General American Life Ins. Co., 84 C 1280 (N.D.Ill. May 24, 1984). An earlier case by this court dismissing a tort claim for compensatory and punitive damages against an insurer is presently on appeal. United of America Bank v. Aetna Casualty and Surety Co., 83 C 8154 (N.D.Ill. April 3, 1984), certified for appeal in order dated April 26, 1984, appeal accepted, Misc. 84-8022 (7th Cir. June 12, 1984). It therefore appears that a definitive ruling will soon settle the issues raised by the motion to dismiss count 4. To avoid delay in this case, however, the present motion will be decided now. Furthermore, the continuing judicial debate on these issues has convinced this court to reexamine its position.

Since the Illinois Supreme Court has not decided this issue, this court must predict what rule that Court would adopt if faced with the issue. Harris v. Karri-On Campers, Inc., 640 F.2d 65, 68 (7th Cir.1981); Barr Co. v. Safeco Ins. Co. of America, 583 F.Supp. 248, 252-54 (N.D.Ill.1984). In making that decision, this court must consider all the data which the Illinois Supreme Court would consider and follow the approach that Illinois courts take toward the problem. Harris, 640 F.2d at 68.

Although the Illinois Supreme Court has not passed on preemption as it relates to this particular statute, it has addressed the issue of statutory preemption before. In Hall v. Gillins, 13 Ill.2d 26, 147 N.E.2d 352 (1958), the Court held that no new common-law right of action for a wrongful death would be recognized where the legislature had created a wrongful death remedy by statute. Though the statutory remedy differed substantively from the proposed common-law action in that it limited the kinds of damages that could be recovered to pecuniary injury and limited the amount of damages that could be recovered to $20,-000, the Court was persuaded those differences were “not sufficiently significant” to justify creating a new remedy. 147 N.E.2d at 355.

A few years later the Court held that the Dram Shop Act of 1872 (now in Ill.Rev. Stat. ch. 43, § 135) preempted any common-law recovery for damages caused by the negligent sale of liquor. Cunningham v. Brown, 22 Ill.2d 23, 174 N.E.2d 153 (1961). In Cunningham, the Court reviewed the history leading up to the 1872 Act and found that the Act was passed because (1) no common-law action against tavern operators for the sale of liquor existed, and (2) the “temperance forces were demanding that the cost of the intoxicating liquor should bear the damages it caused.” 174 N.E.2d at 156. Since the statutory remedy and the proposed common-law remedy both had the same basic purpose — to make the tavern operator liable for damages caused by his sale of liquor — the Court concluded that the two remedies were “almost coincidental” except for the amount of damages recoverable. The Court then cited Hall for the proposition that the statutory limit of $15,000 on the amount that could be recovered was not reason enough to create a common-law action.

These two cases illustrate two principles relevant to the question in this case. First, when the legislature has provided a remedy for a heretofore unremedied evil, the courts should not allow an end-run around the limits imposed by that statute by creating a common-law action that remedies the same basic evil. Second, the statutory and common-law actions need not be identical for preemption to occur. In Hall, for example, the legislature’s allowing recovery only for pecuniary injury did not justify creating a new tort that would allow recovery for the “destruction of the family unit” as plaintiffs in that case claimed. 147 N.E.2d at 355. Similarly, in Cunningham the fact that the statute imposed liability without fault did not convince the Court to create a parallel but fault-based common-law action. 174 N.E.2d at 155. Finally, both cases held that statutory limits on the amount recoverable were not reason enough to create a common-law remedy.

Of course, not just any overlap between the statute and the common-law remedy will do. Whether the legislature intended to remedy the same basic evil as the common-law remedy is aimed at “must be ascertained through examination of the practical considerations to which the legislature directed itself when enacting ... the ... statute.” 174 N.E.2d at 156. Since the statute here in question does not explicitly reveal the evil the legislature was concerned with, an examination of legislative history is necessary.

Section 155 of the Illinois Insurance Code was first enacted in 1937 as part of a comprehensive revision of the insurance laws. That first version of § 155 allowed reasonable attorneys’ fees if the insurance company was found to have behaved vexatiously and without reasonable cause. The fee award could not exceed the lesser of 25% of the amount the court or jury awarded the insured (presumably on his contract claim), $500, or the difference between the amount awarded the insured and the amount the insurance company had offered in settlement before the lawsuit.

The only indication of the legislature’s intent this court has found appears in an article explaining the New Code generally. Havinghurst, Some Aspects of the Illinois Insurance Code, 32 Ill.L.Rev. 391 (1937). Written by the chairman of the committee of the Illinois State Bar Association Insurance Law Section which drafted the basic version of the 1937 revision, the article describes § 155 as “objectionable to [insurance] companies” because “courts are apt to allow exorbitant amounts” for attorneys’ fees thus driving up premium rates. To rebut that objection the author points out that (1) the court, not the jury, makes the fee award, (2) “[n]o stated penalty is provided for,” and (3) the limits ($500 maximum at that time) on the amount that could be awarded make the attorneys’ fees provision “the most moderate of any of the statutes.” Id. at 404. The author then states:

In the absence of any allowance of attorneys’ fees, the holder of a small policy may see practically his whole claim wiped out by expenses if the company compels him to resort to court action, although the refusal to pay the claim is based upon the flimsiest sort of a pretext. The strict limit on the amount allowable makes the section significant only for small claims. It should prove wholesome in its effect upon companies unreasonably withholding payment of such claims. It is doubtful if there are many judges who would allow such fees when the defense was bona fide although deemed inadequate.

One commentator has concluded from the above article that the sole purpose of § 155 was to make possible suits by holders of small policies by awarding the attorneys’ fees that otherwise would consume the holder’s recovery on the policy. Durham, Section 767 of the Illinois Insurance Code: Does It Pre-Empt Tort Liability?, 16 John Marshall L.Rev. 471, 492-93. However, the language of the statute as well as the above quotations from Havin-ghurst’s article contradict that conclusion. If the legislature’s sole purpose was to make suits by holders of small policies economically worthwhile, then the statute would have conditioned the fee award on the insured’s conduct by looking to whether the insured had prevailed and was not otherwise undeserving. See Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 416-17, 98 S.Ct. 694, 697-98, 54 L.Ed.2d 648 (1978) (interpreting section 2000e-5(k) of Title VII). Limiting attorneys’ fee awards to cases where the insurer’s conduct was vexatious or unreasonable suggests that a second purpose — punishing misbehaving insurance companies — was at work. As Mr. Havinghurst wrote, § 155 “should prove wholesome in its effect upon companies unreasonably withholding payment of [small] claims.” Although it could be argued that the punitive remedy is insufficient where the policy amount is large, Cunningham and Hall show that a court must not second-guess the legislature’s decision concerning the amount necessary to fulfill the statute’s purpose. That is especially so when the constitutional provision which was invoked to support the inadequate-remedy argument in those two cases (that “Every person ought to find a certain remedy in the laws for all injuries and wrongs which he may receive;” Ill. Const. Art. II) has no application to the availability of punitive damages.

One appellate court has decided that the original § 155 does not preempt punitive damages. In Lynch v. Mid-America Fire & Marine, 94 Ill.App.3d 21, 418 N.E.2d 421, 49 Ill.Dec. 567 (4th Dist.1981), the court viewed § 155 as simply reversing the normal rule against allowing attorneys’ fees and stated “[t]he tenor of the section gives no indication that it was intended to cover the field of awarding compensation for bad faith or vexatious dealing by insurers.” 418 N.E.2d at 426, 49 Ill.Dec. at 571. By lumping punitive and compensatory damages together, however, that court did not follow the approach laid down in Hall and Cunningham. While it may be true that § 155 was not intended to “cover the field of awarding compensation,” the above discussion shows the 1937 legislature did intend § 155 to fulfill the role of punitive damages. Whether § 155 preempts compensatory damages is, of course, another matter.

The 1977 amendments to § 155 increased the punitive effect of the award by removing the cap on attorneys’ fees and providing for the award of a separate sum not to exceed $5,000. Not surprisingly, every Illinois appellate court that has considered the the issue agrees that the present version of § 155 preempts punitive damages. Kinney v. St. Paul Mercury Ins. Co., 120 Ill.App.3d 294, 458 N.E.2d 79, 75 Ill.Dec. 911 (1st Dist.1983); Hoffman v. Allstate Ins. Co., 85 Ill.App.3d 631, 407 N.E.2d 156, 40 Ill.Dec. 925 (2d Dist.1980); Debolt v. Mutual of Omaha, 56 Ill.App.3d 111, 371 N.E.2d 373, 13 Ill.Dec. 656 (3d Dist.1978); Fisher v. Fidelity & Deposit Co. of Maryland, 125 Ill.App.3d 632, 466 N.E.2d 332, 80 Ill.Dec. 880 (5th Dist.1984). Even were this court not otherwise persuaded that punitives are preempted, the uniform rule adopted by these decisions “is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise.” West v. AT & T, 311 U.S. 223, 237, (1940); see also White v. United States, 680 F.2d 1156, 1161 (7th Cir.1982). No such persuasive data exists. Therefore, this court concludes that § 155 preempts any award of punitive damages based on a common-law theory at all times relevant to this case.

Count 4 also claims compensatory damages. As the labels suggest, compensatory and punitive damages serve different purposes: the former compensates the plaintiff while the latter punishes the defendant. Although both kinds of damages can be recovered by one plaintiff for one wrong, they should, strictly speaking, be considered the fruits of separate action. Compensatory damages are recovered by a plaintiff acting solely for himself to remedy his own wrong. Punitive damages, by contrast, are recovered by an “attorney general” (whether private or public) acting to punish and deter behavior that has been deemed harmful to the public at large. Therefore, in accord with the approach illustrated by Hall and Cunningham, the legislative history must be reviewed again to see whether § 155 was also intended to compensate insureds who had suffered loss as a result of vexatious and unreasonable behavior by their insurance company.

As already discussed, the Havinghurst article suggests the original § 155 had two purposes: to make suits by holders of small policies economically feasible, and to punish misbehaving insurance companies. The article makes no mention of an intent to compensate plaintiffs for actual losses. Moreover, the wording of the statute itself contradicts such an intent. Section 155 does not provide for an award in the general sense; it provides for attorneys’ fees. As the statute itself states, attorneys’ fees are considered “part of the taxable costs in the action” rather than part of the damages sustained. Therefore the language the legislature expressed itself in belies any intent to address the problem of compensating the plaintiff for damages sustained.

The substance of the statute also belies any intent to preempt compensatory damages, since the provisions of § 155 are fully explainable in terms of a punitive purpose, and some of its provisions are only explainable in terms of that purpose. As already noted, § 155 applies only when the insurer’s conduct was vexatious and unreasonable. That limitation makes perfect sense if the award is intended to punish the defendant, but little sense if the award is intended to compensate the plaintiff since the need for compensation is wholly independent of the vexatiousness of the insurer’s conduct. Similarly, the computation of the statutory award is consistent with a punitive but not a compensatory purpose. The award is not figured by looking to the losses sustained, but rather by looking to the amount of reasonable attorneys’ fees incurred. While that method of computation is consistent with a punitive purpose, see the Havinghurst article supra and Barr v. Safeco Ins. Co. of America, 583 F.Supp. 248, 255 (N.D.Ill.1984), the amount of attorneys’ fees bears no necessary relation to the amount of loss.

The 1977 amendments to § 155 likewise do not evidence an intent to address the issue of compensation. As with the origi-. nal version, the legislative history contains no suggestion of such intent. Nor do the amendments themselves show such an intent. The amendment removing the limit on the amount of attorneys’ fees recoverable may make more suits against insurers economically feasible but does nothing to compensate the plaintiff for the damages giving rise to the suit. Similarly, the award of a sum not to exceed $5,000, being governed by the same standards as the attorneys’ fees award of the original section, is no more related to compensation than the original statute was. The only intent this court can discern from the amendments is an intent to increase the effectiveness of the statute in achieving the two purposes identified in Mr. Havin-ghurst’s article by separating the attorneys’ fees award from the punitive damages award and allowing a court to impose both. As with the original statute, the purposes of providing attorneys’ fees and punishing errant insurers fully explains the provisions of the present statute.

Since every provision of the present and original § 155 is fully explained by and furthers the purposes of making suits economically feasible and punishing errant insurers, there is nothing left over to serve the purpose of compensating plaintiffs. To hold that the original § 155 or the obviously punitive cash award of the current statute also preempts compensatory damages would require the unusual assumption that one award can serve both purposes. As already discussed, neither the legislative history nor the statute itself suggests that the legislature acted on that assumption. Indeed, the very notion of punitive damages is inconsistent with the idea of one award for both purposes since requiring a defendant to compensate his victim is normally considered restitution, not punishment. Therefore, this court concludes that the analysis mandated by Hall and Cunningham shows that § 155 was not intended to and does not preempt recovery of compensatory damages on a tort theory.

The two Illinois appellate courts that have considered the issue of compensatory damages are split. The first district has consistently held that § 155 preempts all tort actions based on an insurer’s bad faith conduct and has therefore upheld dismissals of compensatory damage claims based on such an action. Trautman v. Knights of Columbus, 121 Ill.App.3d 911, 460 N.E.2d 350, 77 Ill.Dec. 294 (1984); Kinney v. St. Paul Mercury Ins. Co., 120 Ill.App.3d 294, 458 N.E.2d 79, 75 Ill.Dec. 911 (1983); Tobolt v. Allstate Ins. Co., 75 Ill.App.3d 57, 393 N.E.2d 1171, 30 Ill.Dec. 824 (1979). The first district opinions, however, do not recognize that compensatory damages have a function wholly different from punitive damages, and do not examine the statute and its history to see if it was intended to serve the compensatory function. The analysis in these opinions is essentially the converse of Lynch: they lump punitive and compensatory damages together and then conclude that since the legislature intended to preempt the former it also preempted the latter. See, e.g., Tobolt, 393 N.E.2d 1179-80, 30 Ill.Dec. at 832-33, which quotes extensively from Debolt v. Mutual of Omaha, 56 Ill.App.3d 111, 371 N.E.2d 373, 13 Ill.Dec. 656 (4th Dist.1978), leave to appeal denied, 71 Ill.2d 602, an opinion which dealt solely with the question of punitive damages.

The second district has held that while § 155 preempts punitive damages, it “does not preempt a plaintiff’s right to claim compensatory damages for a breach of good faith and fair dealing.” Hoffman v. Allstate Ins. Co., 85 Ill.App.3d 631, 407 N.E.2d 156, 40 Ill.Dec. 925, 928 (1980). Based on the above examination of § 155 and its history, this court concludes that Hoffman correctly applied the principles laid down by Hall and Cunningham and predicts that the Illinois Supreme Court would agree with Hoffman rather than the first district’s position. Therefore, the motion to dismiss count 4 is denied but the request for punitive damages is stricken.

IV.Count 7

Count 7 alleges that defendants Continental, Zurich, Bituminous, Underwriter’s Adjusting Company, Home, Continental Casualty Company, Commercial Union, Falcon, American Mutual, National Surety and Fireman’s Fund are liable for compensatory damages and attorneys’ fees under the Illinois Unfair Claims Practices Act, Ill.Rev.Stat. ch. 73, § 766.6 (1981). However, the Illinois appellate courts agree that § 766.7 provides no private right of action but simply defines those practices for which the Illinois Director of Insurance may issue a cease and desist order under § 766.8. Hamilton v. Safeway Ins. Co., 104 Ill.App.3d 353, 432 N.E.2d 996, 60 Ill.Dec. 97 (1st Dist.1982); Hoffman v. Allstate Ins. Co., 85 Ill.App.3d 631, 407 N.E.2d 156, 40 Ill.Dec. 925 (2d Dist.1980); Tobolt v. Allstate Ins. Co., 75 Ill.App.3d 57, 393 N.E.2d 1171, 30 Ill.Dec. 824 (1st Dist.1979). UNR relies on Scroggins v. Allstate Ins. Co., 74 Ill.App.3d 1027, 393 N.E.2d 718, 30 Ill.Dec. 682 (1st Dist.1979), but that court’s.statement that § 766.6 was “enacted for the benefit of the insured ... as well as to provide an administrative enforcement mechanism for the benefit of the public at large” is, besides being dicta, not sufficient to sustain an implied private right of action. Illinois courts imply such an action only where it is both consistent with and necessary to achieve the aims of the statute. Sawyer Realty Group, Inc. v. Jarvis Corp., 89 Ill.2d 379, 386, 432 N.E.2d 849, 852, 59 Ill.Dec. 905, 908 (1982). Since the statute allows the Director of Insurance to issue cease and desist orders to any insurer that commits an act proscribed by § 766.6, an implied private right of action is simply not necessary. Abbott Laboratories v. Granite State Ins. Co., 573 F.Supp. 193, 196 (N.D.Ill.1983).

In its brief UNR alternatively asks permission to amend count 4 to base its right to sue on § 155 of the Insurance Code, Ill.Rev.Stat. ch. 73, § 767 (1981). Defendants’ reply brief raises no objection to this amendment and this court sees none. Therefore, count 7 is dismissed and UNR is given until December 10, 1984 to file an amended count 7.

V.Counts 12, 13 and 14

Counts 12, 13 and 14 name UNR’s former insurance broker, Corroon & Black of Illinois, Inc. (“defendant”), as the sole defendant and allege professional negligence, breach of fiduciary duty, implied indemnity, and breach of implied and oral contracts. Defendant has moved to dismiss (under Fed.R.Civ.P. 12(b)(6) and 16) and in the alternative for a more definite statement (under Fed.R.Civ. 12(e)) as to all three counts. While the allegations in these counts are broadly phrased, they are not “so vague that [the defendant] cannot reasonably be required to frame a responsive pleading.” McDougall v. Donovan, 552 F.Supp. 1206, 1208 (N.D.Ill.1982). The details defendant seeks can be gained through discovery. Wishnick. v. One Stop Food & Liquor Store, 60 F.R.D. 496, 498 (N.D.Ill.1973). Defendant’s motion is therefore denied.

VI.Remaining Counts

The counts which have not been dismissed are all based on state law. If this were an ordinary case the dismissal of the federal claims would, since no diversity is alleged, also require dismissal of the state law claims. By-Prod Corp. v. Armen-Berry Co., 668 F.2d 956, 962 (7th Cir.1982). However, this is not an ordinary case since it originated in the bankruptcy court. The parties are therefore directed to file briefs limited to the question of the proper forum for the remaining claims, keeping in mind the relevant provisions of the Bankruptcy Amendments and Federal Judgeship Act of 1984, 98 Stat. 333. Since the choice of forum is normally a plaintiff’s, UNR shall file the opening brief by December 17, 1984. Defendants shall file their answer by December 31 and UNR’s reply is due January 7, 1985. No duplication of argument will be permitted and briefs exceeding 15 pages will not be accepted.

IT IS THEREFORE ORDERED that:

(1) Counts 1 and 2 are dismissed.

(2) The request for punitive damages in count 4 is stricken.

(3) Count 7 is dismissed. UNR is given until December 10,1984, to file an amended count 7.

(4) Defendants are ordered to answer all remaining unanswered counts by December 17, 1984.

(5) UNR’s opening brief on the proper forum issue is due December 17,1984. Defendants’ answer brief is due December 31, and UNR’s reply brief is due January 7, 1985.

(6) This case is set for a status hearing on January 8, 1985 at 2:00 p.m.

      . UNR appears to argue that the boycott it alleges (and perhaps the coercion as well) constitutes a per se violation. However, group boycotts are illegal per se only if they are used to enforce agreements that are themselves illegal per se. Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101 (7th Cir.1984); cf. Indiana Federation of Dentists v. FTC, 745 F.2d 1124 at 1131 n. 8 (7th Cir.1984) (questioning the Car Carriers rule). Since no price-fixing or other per se violation has been shown, that would appear to dispose of UNR’s per se claim. In any event, UNR’s boycott claim, like its price-fixing claim is not of the traditional type and therefore must be scrutinized for anticompetitive effect. Bunker Ramo Corp. v. United Business Forms, Inc., 713 F.2d 1272, 1284 (7th Cir.1983). Since as discussed below UNR’s boycott and coercion claims have nothing to do with the competition the antitrust laws are meant to protect, they perforce do not state a per se claim.

      . UNR's answer brief states that defendants refused to issue policies to UNR. Id. at 8. However, no such allegation is made in the amended complaint and therefore it has not been considered.

      . Since count 2 is dismissed for failure to state a claim, the separate motion of Insurance Services Office need not be addressed.

      . The Illinois cases are discussed below. For a summary of the varying decisions within this district, see Barr Co. v. Safeco Ins. Co. of America, 583 F.Supp. 248, 251 (N.D.1984).

      . Roberts v. Western-Southern Life Ins. Co., 568 F.Supp. 536 (N.D.Ill.1983) agreed with Lynch that the original version of § 155 did not preempt punitive damages. Like Lynch, Roberts relied on the difference between the remedy in § 155 and the remedy of compensatory damages to conclude that punitive damages are not preempted.

      . Roberts v. Western Southern Life Ins. Co., 568 F.Supp. 536 (N.D.Ill.1983), found such persuasive data in a report by the state commission which drafted the 1977 amendments. The report stated that the commission "thought that the insurance industry might have taken the opportunity to establish statutory limits on the amount of punitive damages. This was not done." Id. at 549. Since it contradicts the intent of the 1937 legislature and the intent most naturally inferred from the 1977 amendments, that statement can only be persuasive if the statutory action and the common-law action are significantly different. Roberts argues they are significantly different because the statute looks to objective qualities of the insurer's conduct ("vexatious and unreasonable action") and so sets a lower standard than the common law, which looks to the subjective intent of the insurer ("bad faith” and "malicious”). Even if realistic, however, that difference is exactly analogous to the difference between absolute and fault-based liability which Cunningham found insufficient to justify the creation of a commonlaw remedy. 174 N.E. at 155.

      . Knierim v. Izzo, 22 Ill.2d 73, 174 N.E.2d 157 (1961), which held that "compensatory damages [can] be sufficiently punitive,” does not detract from the foregoing analysis. In that case no limit was placed on the amount of compensatory damages, so it was reasonable to assume that the same amount would properly punish the wrongdoer. The statute involved here, however, places strict limits on the amount that can be awarded. It would be unreasonable to assume that same amount could "sufficiently” compensate the plaintiff.


author: SHADUR, District Judge.

text:
    Csaba BOKROS, Plaintiff, v. ASSOCIATES FINANCE, INC., Defendant.
    No. 84 C 6126.
    United States District Court, N.D. Illinois, E.D.
    Dec. 6, 1984.

      Andy Norman, Chicago, Ill., for plaintiff.
    Andrew B. David, Bob Clark, Jr., Arvey, Hodes, Costello & Burman, Chicago, Ill., for defendant.
   MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Csaba Bokros (“Bokros”) charges Associates Finance, Inc. (“Associates”) with violations of the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601-rl667e, and various state statutory and common law rules. On Associates’ motion, this Court dismissed Bokros’ original complaint and this action because the limitations periods applicable under TILA (one for rescission and one for damage actions) had run, thus eliminating the sole basis for federal jurisdiction. Bokros then filed an Amended Complaint (the “Complaint”) seeking to meet Associates’ objections. Associates in turn renewed its Fed.R.Civ.P. (“Rule”) 12(b)(6) motion to dismiss, which this Court granted from the bench October 24, 1984. Bokros now moves for a order vacating the dismissal and reinstating the lawsuit. For the reasons stated in this memorandum opinion and order that motion is denied.

Facts

On July 11, 1979 Bokros entered into an agreement with Robert Thomas & Associates (“Thomas”) to borrow $17,000. Part of the loan proceeds — $8,000—was used to retire a mortgage on Bokros’ residence, while more than half — $9,000—was used to help finance the purchase of a tractor-trailer. Bokros’ obligation to repay the principal sum plus finance charges, calling for monthly installments over a five-year period, was secured by a junior mortgage on Bokros’ house.

Though Bokros received $17,000 in loan proceeds, the note and security agreement memorializing the loan (the “Note,” no copy of which was supplied to Bokros) reflected loan proceeds of $20,000, to which a finance charge of $12,400 was added, for a total repayment obligation of $32,400. While the printed terms of the Note contemplated a loan secured by a security interest, with a space provided for a description of the collateral, no such description was included. Indeed the space allotted for describing collateral other than a motor vehicle simply contained the following handprinted term: “Prepayment penalty of 5% of principal balance will be in effect for 1 yr.” Moreover the line provided for specifying the annual percentage rate on the loan was left blank. In two places the Note specified 60 monthly payments of $540 each beginning in August 1979. Bokros also signed and delivered a “business loan” affidavit (Appendix A, the “Affidavit”; see Ill.Rev.Stat. ch. 17, ¶ 6404(c), formerly ch. 74, 114(c)) attesting (1) he was engaged in the trucking business, doing business as Bokros Trucking, and (2) the loan proceeds were to be used solely to carry on the business (referring specifically to “down payment on tractor-trailer”).

In 1981 Bokros and his wife experienced financial difficulties and filed for relief under Chapter 13 of the Bankruptcy Reform Act of 1978, 11 U.S.C. §§ 1301-1330. Before that, however, Thomas had assigned the Note to Associates, which filed with the Cook County Recorder of Deeds a mortgage on Bokros’ residence reflecting a principal debt of $20,000 plus finance charges. After the assignment Bokros had been making the monthly payments under the Note to Associates, though after the Chapter 13 filing he made payments to the Chapter 13 trustee, who in turn made payments to Bokros’ creditors, including Associates. In all Associates has received payments of at least $29,953.93 on the outstanding obligations.

In 1983 Bokros asked Associates for, and received, a copy of the Note. In light of the discrepancy as to principal amount and other omissions, Bokros decided to invoke TILA. On April 24, 1984 he notified Associates he was rescinding the loan under TILA § 1635. Associates refused to honor the rescission, leading Bokros to initiate this lawsuit July 18, 1984.

Claimed Bases for Vacating Dismissal

Bokros makes a three-part argument in support of his motion:

1. .Thomas’ loan to him was a consumer credit transaction subject to the provisions of TILA.
2. Associates took the Note subject to any claims and defenses Bokros would have asserted against Thomas.
3. Both TILA limitations provisions were tolled because both Thomas and Associates fraudulently concealed from Bokros his right to rescind the loan.

This opinion will consider each contention in turn.

1. Applicability of TILA

TILA § 1603(1) exempts from TILA’s provisions:

Credit transactions involving extensions of credit primarily for business, commercial or agricultural purposes, or to government or governmental agencies or instrumentalities, or to organizations.

To determine whether an extension of credit falls within that exemption, the court “must examine the transaction as a whole and the purpose for which the credit was extended.” Tower v. Moss, 625 F.2d 1161, 1166 (5th Cir.1980).

Bokros argues the loan does not qualify as primarily for business or commercial purposes, because nearly half its proceeds were used to retire Bokros’ existing residential mortgage. See Gallegos v. Stokes, 593 F.2d 372, 375 (10th Cir.1979) (loan extended for purchase of a pickup truck for both personal and business use was subject to TILA’s disclosure requirements).

That contention is of course belied by the representations in the Affidavit, in which Bokros explicitly affirmed the loan proceeds were to be used for business purposes. While the Affidavit is not conclusive on that score, given the necessity to examine the transaction as a whole, it is strong evidence of the loan’s character. But even apart from the all-or-none characterization in the Affidavit, on Bokros’ own current statement of the facts (Complaint Count I 113) more than half the proceeds— $9,000 of the $17,000 — were in fact used for down payment on a tractor-trailer for his business (unquestionably a “business” or “commercial” purpose).

After all TILA § 1603 does speak in terms of “primarily.” And even though Gallegos, 593 F.2d at 375 did talk of “a factual issue to be resolved by the trier of fact,” it was referring to a mixed factual bag with permissible inferences going either way. By contrast Tower, which said “the nature of the credit transaction is ultimately determined by the entire surrounding factual circumstances” (625 F.2d at 1166 n. 4), considered a set of facts that were not in dispute and resolved the TILA exemption question as a matter of law (id. at 1166-67). It is worth noting that is precisely how courts deal with the analogous (or, rather, even more factually oriented) question whether the “dominant purpose” of a contract is for sale of goods or for services, governing the applicability vel non of UCC Article 2; see, e.g., WICO Corp. v. Willis Industries, 567 F.Supp. 352, 355 (N.D.Ill.1983) and cases cited there.

If “primarily” is to have any substantive content (as it must), in the context of a loan like Bokros’ — taken out for two discrete purposes — it must refer to the use of more than half the funds. That use, for purchase of the tractor-trailer, was concededly for “business [or] commercial ... purposes.” Because the loan thus involved an “extension[] of credit primarily for business [or] commercial ... purposes,” TILA was inapplicable to the loan under TILA § 1603(1) as a matter of law.

This opinion could end right now. But because Bokros must founder on still another ground, it may be worth some further discussion on the assumption the primary purpose of the loan could pose a factual question. If so, the principles of Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957), recently reaffirmed in Hishon v. King & Spalding, — U.S. -, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59 (1984), would require going forward.

2. Liability of Associates as Assignee

TILA § 1641 defines the scope of an assignee’s liability:

(a) Except as otherwise specifically provided in [TILA], any civil action for a violation of [TILA] ... which may be brought against a creditor may be maintained against any assignee of such creditor only if the. violation for which such action or proceeding is brought is apparent on the face of the disclosure statement.

However a different rule controls the right to rescission provided by TILA § 1635. On that score TILA § 1641(c) provides:

Any consumer who has the right to rescind a transaction under section 1635 of this title may rescind the transaction as against any assignee of the obligation.

That unequivocal language is confirmed by the legislative history (S.Rep. No. 368, 96th Cong., 1st Sess. 32-33, reprinted in 1980 U.S.Code Cong. & Ad.News 236, 268):

In addition, this section eliminates ambiguity on the question of assignee liability for rescission by stating explicitly that a consumer’s exercise of this right is effective against an assignee. Without such protection for the consumer, the right of rescission would provide little or no effective remedy.

Thomas’ assignment of the loan, in other words, did not suspend Bokros’ rights under TILA § 1635, even as against Associates.

3. Limitations Analysis

Under TILA § 1635(a), a debtor who has entered into a credit transaction subject to TILA and who, as part of the transaction, has granted the creditor a security interest in his principal dwelling:

shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this subchapter, whichever is later, by notifying the creditor, in accordance with regulations of the Board, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Board, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the Board, appropriate forms for the obligor to exercise his right to rescind any transaction subject to this section.

TILA § 1635(f) imposes a time limit on that right to rescind:

An obligor’s right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first, notwithstanding the fact that the information and forms required under this section or any other disclosures required under this part have not been delivered to the obligor....

Bokros’ loan was consummated July 11, 1979 — or at least by August 25, 1979, the date of the first installment payment. By the plain terms of the statute, then, Bokros’ right to rescind as against Thomas or its assignees had expired long before Bokros gave Associates notice of rescission April 24, 1984.

In an effort to avoid that conclusion, Bokros contends both Thomas and Associates fraudulently concealed from him his right to rescind under TILA § 1635. His theory is he was deliberately kept in the dark as to his rights by parties who had an affirmative duty to disclose, so that equitable tolling principles suspended the running of the limitations clock for the period the fraudulent concealment continued.

Fraudulent concealment doctrine has long been recognized as applicable to federal statutes of limitations. As Justice Frankfurter put it in Holmberg v. Armbrecht, 327 U.S. 392, 397, 66 S.Ct. 582, 585, 90 L.Ed. 743 (1946):

[Tjhis Court long ago adopted as its own the old chancery rule that where a plaintiff has been injured by fraud and “remains in ignorance of it without any fault or want of diligence or care on his part, the bar of the statute does not begin to run until the fraud is discovered, though there be no special circumstances or efforts on the part of the party committing the fraud to conceal it from the knowledge of the other party.” Bailey v. Glover, 21 Wall. 342, 348, 22 L.Ed. 636....

That “equitable doctrine is read into every federal statute of limitation,” id. at 397, 66 S.Ct. at 585, including those under TILA. See Davis v. Edgemere Finance Co., 523 F.Supp. 1121, 1125-27 (D.Md.1981); Chevalier v. Baird Savings Association, 66 F.R.D. 105, 106-08 (E.D.Pa.1975).

To make out a case of fraudulent concealment under TILA, though, Bokros must do more than “merely intoning the word ‘fraudulently,’ ” Charlotte Telecasters, Inc. v. Jefferson-Pilot Corp., 546 F.2d 570, 574 (4th Cir.1976) or more than alleging mere nondisclosure, Davis, 523 F.Supp. at 1126. Rather he must allege facts indicating (Davis, 523 F.Supp. at 1125, quoting Charlotte Telecasters, 546 F.2d at 574, in turn quoting Weinberger v. Retail Credit Corp., 498 F.2d 552, 555 (4th Cir.1974)):

(1) fraudulent concealment by the party raising the statute together with (2) the other party’s failure to discover the facts which are the basis of his cause of action despite (3) the exercise of due diligence on his part.

As to Thomas, Bokros has satisfied the Weinberger-Charlotte-Davis test. Thomas’ alleged modification of the principal amount of the loan on the Note, without giving a copy of the alleged Note to Bok-ros, concealed from Bokros the documented terms of the transaction. Thomas’ failure to specify an annual percentage rate may be cast in a similar light. Moreover, assuming (most favorably to Bokros) that Thomas knew the loan was subject to TILA yet induced Bokros to execute the Affidavit, Thomas may be charged with attempting to conceal from Bokros the availability of TILA remedies, including TILA § 1635 rescission.

But as to Associates (the party to this lawsuit) Bokros has made no particular allegations (as required by Rule 9(b)) indicating fraudulent concealment. He alleges only (1) Associates knew or should have known the specification of the principal amount on the Note had been altered and (2) by virtue of receiving a copy of the Affidavit, Associates had reason to know Bokros had received no notice of his right to rescind. Those facts, Bokros contends, evince a reckless disregard for his rights and indicate Associates furthered the concealment.

Even were it assumed the irregularities and omissions in the Note should have raised some doubt on Associates’ part about Thomas’ diligence and care in documenting the loan, those deficiencies themselves are not badges of fraud. It requires an impermissible leap of faith to move from the notion Associates might have been put on inquiry of possible irregularities in its assignor’s handling to the conclusion it engaged in fraudulent concealment.

Moreover any argument Associates might have been charged with doubts as to Thomas’ compliance with TILA requirements is dispelled by the existence of the Affidavit, in which Bokros himself represented the loan was not a consumer transaction. Bokros’ contention that Associates’ receipt of the Affidavit put it on notice Bokros had received no notice of his “right” to rescind subsumes an assumption he had such a right — an assumption negated by the Affidavit itself. That argument is impermissibly circular. Nothing in the Complaint alleges, or creates the reasonable inference, Associates had reason to doubt the accuracy or validity of the Affidavit.

In short, on Bokros’ own allegations Associates took no affirmative steps to conceal from Bokros his TILA § 1635 rights, nor do the alleged facts reasonably imply a deliberate failure by Associates to investigate a patently suspect transaction. At worst (and even this requires a stretching of the facts) Associates must be viewed as involved in “mere nondisclosure” — conduct, in other words, not rising to the level of fraudulent concealment. Davis, 523 F.Supp. at 1126.

Conclusion

Bokros is not entitled to claim TILA’s protection, for his loan was excluded under TILA § 1603(1). And even were that not so, his right to rescind the loan as against Associates would be barred by the three-year statute of limitations under TILA § 1635(f). Bokros’ TILA § 1635 claim thus fails as a matter of law. Lacking any other basis for federal jurisdiction, this Court is also without power to hear Bok-ros’ pendent state claims. Bokros’ motion to vacate the order dismissing his Complaint and this action is denied.

APPENDIX A

ROBERT THOMAS AND ASSOCIATES, INC.

Mortgage Consultants

215 North Arlington Heights Road

Arlington Heights, Illinois 60004 STATE OF ILLINOIS COUNTY OF COOK

AFFIDAVIT

I, Csaba Bokros of the City of Streamwood, County of_, State of Illinois, being duly sworn, to dispose and say that I own and operate a business known as Bok-ros Trucking, located at 714 Ridge, Illinois; that the purpose of the loan applied for by me is soley for the purpose of carring on such business and the proceeds will be used for such purpose and for no other. I, the undersigned, warrant that I am in the trucking business; that the proceeds of this loan will be used for working capital for such business and to pay business debts of such business; that I make this AFFIDAVIT of my own free will and that it is soley induce ROBERT THOMAS & ASSOCIATES, INC. to grant a certain loan to me for business exclusively. I am not a corporation, I D B A Bokros Trucking. The funds from ROBERT THOMAS & ASSOCIATES, INC. were used for my business in the following manor: down payment on tractor trailer.

Mr. Csaba Bokros /s/

Mrs. [signature illegible!

Subscribed and Sworn before me this date 7/11/79

[signature illegiblel

NOTARY PUBLIC

      . Citations to TILA will take the form “TILA § — ,” with each section number referring to Title 15 rather than to TILA’s internal numbering.

      . Bokros’ motion to vacate dismissal of his Complaint calls into play the standards applicable to the earlier motion to dismiss: acceptance of the Complaint’s well-pleaded factual allegations as true, with all reasonable inferences drawn in Bokros' favor. Wolfolk v. Rivera, 729 F.2d 1114, 1116 (7th Cir.1984). That of course involves no actual findings of fact.

      .For that purpose Thomas used a preprinted form, with blanks left for specifying such particulars as the principal amount, finance charge and annual percentage rate.

      . Associates argues Bokros is really seeking relief under TILA § 1640(a), imposing civil liability for damages (that would render TILA § 1641(c) inapplicable). This opinion again makes the assumption most favorable to Bokros by looking to TILA § 1641(c).

      . For TILA purposes a loan is consummated when credit is extended (or perhaps even earlier, when the creditor-customer contractual relationship is created). See Nash v. First Financial Savings & Loan Ass'n, 703 F.2d 233, 238 (7th Cir.1983).

      . In the notice of rescission to Associates (required by TILA § 1635(a)), Bokros’ counsel said:
      [T]his transaction has not been consummated _
      Just what he meant by that is unclear, but his briefing on the current issue suggests reliance on the notion Bokros had received $17,-000 in proceeds, while the face amount Thomas wrongfully inserted in the Note was $20,000. But that is really at war with Bokros’ fraudulent-concealment theory discussed later in this section of this opinion. Bokros contends the parties’ agreement was for a principal amount of $17,000, and he acknowledges he received that sum (hence the transaction was “consummated"). If Thomas later altered the Note, that act did not "unconsummate" the loan. Instead it reflects Thomas’ fraudulent misrepresentation of the loan’s terms when the loan was consummated and the Note was executed in blank.

      . This aspect of the analysis raises an intriguing question. From the language of the printed form Affidavit (see Appendix A), it seems clear Thomas wanted to document the loan's qualification as a "business loan,” thus rendering inapplicable the Illinois usury law. If it were assumed Thomas’ intent in that respect was fraudulent (because it knew the loan was not solely a "business loan” under the Illinois statute), and if the affidavit and Thomas’ intent were not aimed at TILA exemption at all, would that render Thomas’ conduct "fraudulent concealment” for TILA purposes? In light of the conclusions in this opinion, that question need not be reached.

      . See the representations in Appendix A. It is wholly unexceptionable for a $20,000 loan to have been required for the purposes Bokros himself represented on the face of the Affidavit.

      . Bokros has not argued the absolute terms of TILA § 1641(c), preserving a debtor’s rescission right even as against an assignee, could authorize holding Associates for Thomas’ fraud. Any such assertion would ignore the essence of the fraudulent concealment doctrine as a doctrine of equitable tolling, applicable when the balance of equities favors relief for the out-of-time plaintiff. Such a balancing of equities would justify relief as to Thomas, but certainly not as to Associates.


author: BUA, District Judge.

text:
    Edna JOHNSON and Jerome Montgomery, on their own behalf and on behalf of all others similarly situated, Plaintiffs, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
    No. 83 C 4110.
    United States District Court, N.D. Illinois, E.D.
    Dec. 17, 1984.

      Joseph A. Antolin, Shelley Davis, Robert E. Lehrer, John Bouman, Cathleen Cohen, Legal Assistance Foundation of Chicago, Chicago, Ill., for plaintiffs.
    Dan K. Webb, U.S. Atty. by Linda A. Wawzenski, Asst. U.S. Atty., Chicago, Ill., Randolph W. Gaines, Deputy Asst. Gen. Counsel, Michael F. Moses, Office of Gen. Counsel, Baltimore, Md., for defendant.
   ORDER

BUA, District Judge.

Before the Court are defendant’s motions to alter or amend the Court’s order dated September 19, 1984, pursuant to Fed. R.Civ.P. 59, and to stay the order pending disposition of defendant’s Rule 59 motion pursuant to Rule 62. For the reasons stated herein, defendant’s motion to alter or amend is denied and its motion to stay is denied for- mootness.

I. DISCUSSION

In support of its motion to alter or amend the Court’s order dated September 19, 1984, defendant sets forth four grounds: (1) not all members of the plaintiff class sought appropriate review of their disability claims within 60 days of the Secretary’s final decision pursuant to 42 U.S.C. § 405(g); (2) not all members of the plaintiff class obtained a final decision from the Secretary and therefore failed to exhaust their administrative remedies; (3) recent Congressional action and case law require reconsideration of the September 19, 1984 order and affirmance of the regulations’ validity; and (4) recent Congressional action prevents the Court’s order from being applied retroactively on the issue of the combined effect of nonsevere impairments.

A motion for reconsideration serves only to correct manifest errors of law or fact or to present newly discovered evidence. Keene Corp. v. International Fidelity Ins. Co., 561 F.Supp. 656, 665 (N.D.Ill.1982). Therefore, a motion for reconsideration should not serve as an occasion to tender new legal theories for the first time. Id. at 666.

1. The 60-Day Requirement

Defendant argues that the 60-day provision of Section 205(g) of the Act, 42 U.S.C. § 405(g), and regulations governing the timeliness of administrative appeal, are an absolute time-bar to claims where claimants (i) did not seek administrative review of the initial administrative determination by the state agency that they were not disabled and thereafter permitted more than 60 days to elapse without taking any further action; (ii) did seek reconsideration or an AU hearing, but did not pursue the matter further and permitted more than 60 days to elapse without taking any further action, or (iii) exhausted their administrative remedies more than 60 days before this class action was filed but did not seek judicial review pursuant to 42 U.S.C. § 405(g). Plaintiff argues that the 60-day requirement is a statute of limitations, not a jurisdictional bar, and therefore the requirement is waived unless raised as an affirmative defense. Plaintiff concludes that defendant has waived any objection to the 60-day requirement since the Secretary raises it here for the first time. Since the first two arguments under the 60-day requirement hinge on the question of exhaustion of administrative remedies, which will be discussed later, the Court will analyze only the third argument under the 60-day requirement.

Under the Social Security Act, claimants must seek judicial review of final decisions of the Secretary “within sixty days after the mailing ... of notice of such decision or within such further time as the Secretary may allow.” 42 U.S.C. § 405(g) (1982). While the Supreme Court’s position on whether the 60-day provision is jurisdictional is not free from doubt, the Court finds that the analysis in City of New York v. Heckler, 742 F.2d 729 (2d Cir.1984) is persuasive. In City of New York, the Second Circuit Court of Appeals examined the Supreme Court cases dealing with the 60-day provision. In the stay ruling in Heckler v. Lopez, — U.S. -, 104 S.Ct. 221, 222-223, 78 L.Ed.2d 217 (1984) (Stevens, J., with whom Blackmun, J., joins, concurring in part and dissenting in part), Justice Stevens reckoned with the issue and concluded that the 60-day requirement is jurisdictional. Although the Secretary apparently had failed to raise the 60-day requirement in the District Court, Justice Stevens declined to find waiver and concurred in maintaining the stay of the Ninth Circuit’s judgment insofar as the stay applied to claimants who had not sought administrative or judicial review of their termination decisions 60 days prior to the filing of the complaint.

In contrast to Justice Stevens’ opinion in Heckler v. Lopez, supra, in two other cases the Supreme Court has concluded that the 60-day limitation is not jurisdictional. Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975). Both Salfi and Eldridge construed the 60-day requirement as a statute of limitations, waivable by the parties. See Mathews v. Eldridge, supra, 424 U.S. at 328 n. 9, 96 S.Ct. at 899 n. 9; Weinberger v. Salfi, supra, 422 U.S. at 763-64, 95 S.Ct. at 2465-66. Notwithstanding his opinion in Lopez, Justice Stevens’ separate opinion in Heckler v. Ringer, — U.S. -, 104 S.Ct. 2013, 2028, 2033-36, 80 L.Ed.2d 622, incorporates the Salfi and El-dridge statements to the effect that section 405(g) contains a “statute of limitations” waivable by the parties. Justices Brennan and Marshall also view the 60-day requirement as waivable, Heckler v. Lopez, supra, 104 S.Ct. at 225, 226.

In addition to the Second Circuit, other Courts of Appeals have adopted the view that the 60-day limitation period is not jurisdictional. Lopez v. Heckler, 725 F.2d 1489, 1508 (9th Cir.1984); Mental Health Ass’n of Minnesota v. Heckler, 720 F.2d 965, 973 n. 19 (8th Cir.1983). Finally, the Second Circuit concluded that Justice Stevens’ opinion in Lopez did not outweigh the majority opinions in Salfi and Eldridge: “In the absence of an authoritative ruling by the Supreme Court to the contrary, we continue to believe that the 60-day requirement is not jurisdictional,” City of New York v. Heckler, supra, 742 F.2d at 738.

In the present case, the issue is whether the Secretary made a timely assertion of the 60-day provision as a defense. If the Secretary did not timely assert the defense under either Fed.Rules Civ.P. 8(c) and 12(h)(1), the 60-day provision need not be considered here. Mathews v. Eldridge, supra, 424 U.S. at 328 n. 9, 96 S.Ct. at 899 n. 9; Weinberger v. Salfi, supra, 422 U.S. at 763-764, 95 S.Ct. at 2465-66. The Secretary argues that she made a timely assertion of the 60-day provision as a defense in both her answer to the plaintiffs’ amended complaint and her memorandum in opposition to class certification.

After examining both documents, the Court finds that the Secretary did not sufficiently raise the 60-day provision as a defense in order to preserve it. In her answer to plaintiffs’ amended complaint, the Secretary merely stated that “plaintiffs have not met the prerequisites to certify this suit as a class action.” In her memorandum in opposition to class certification, the Secretary focused only on the alleged failure of all members of the plaintiff class to exhaust their administrative remedies, i.e., obtain a final decision from the Secretary. The Secretary does not discuss the 60-day provision as barring untimely appeals from final decisions. Therefore, since the Secretary did not sufficiently raise the 60-day provision as a defense, it is waived and need not be considered here.

2. Exhaustion of Remedies

Defendant contends that the plaintiff class contains members who have not exhausted their administrative remedies and therefore have not met the threshold requirement of a “final decision” under 42 U.S.C. § 405(g) for an appeal to this Court. The Secretary argues that she has not waived the exhaustion requirement and neither can the Court do so. Plaintiffs counter that it is proper for the Court to waive the exhaustion requirement where, as here, plaintiffs’ claims are collateral to the demand for benefits and their interest in prompt judicial review is so great that deference to the agency’s judgment is inappropriate.

The Supreme Court has viewed § 405(g) as containing two components: (1) a claim for benefits must have been filed; and (2) the Secretary must have made a final decision on that claim. Mathews v. Eldridge, supra, 424 U.S. at 328, 96 S.Ct. at 899; see Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). The first requirement, the filing of a disability claim, is nonwaivable. Id. Unlike the first, the second requirement may be waived under appropriate circumstances. Id. 424 U.S. at 330, 96 S.Ct. at 900.

The Supreme Court and the Courts of Appeals, including the Seventh Circuit, have made it clear that if the Secretary refuses to waive exhaustion, the court should do so under certain conditions. Mathews v. Eldridge, supra, 424 U.S. at 328-30, 96 S.Ct. at 899-900; Giacone v. Schweiker, 656 F.2d 1238, 1241-43 (7th Cir.1981); Wright v. Califano, 587 F.2d 345, 348-50 (7th Cir.1978); Caswell v. Califano, 583 F.2d 9, 14 (1st Cir.1978). Under these decisions, judicial waiver of complete administrative exhaustion is appropriate when (1) plaintiffs’ legal claims are collateral to the demand for benefits, and (2) plaintiffs’ interest in prompt judicial review is so great that deference to the agency’s judgment is inappropriate. Mathews v. Eldridge, supra, 424 U.S. at 328-30, 96 S.Ct. at 899-900; Giacone v. Schweiker, supra, 656 F.2d at 1243-44; Wright v. Califano, supra, 587 F.2d at 349; Caswell v. Califano, 583 F.2d at 14-15. Judicial waiver of complete administrative exhaustion is also appropriate when the Secretary’s position on the policies being challenged is fixed (i.e., the Secretary cannot change it) or is final (i.e., the Secretary is unlikely to change it). Liberty Alliance For The Blind v. Califano, 568 F.2d 333, 345-46 (3d Cir.1977). The above analysis parallels exactly this Court’s opinion certifying the plaintiff class. Johnson v. Heckler, 100 F.R.D. 70, 73 (N.D.Ill.1983). The Secretary urges reconsideration of the original class certification in light of the recent Supreme Court opinion in Heckler v. Ringer, — U.S. -, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984).

In Ringer, Justice Rehnquist writing for the Court examined the plaintiffs’ claims to determine whether they were collateral to a demand for benefits. In his analysis, Justice Rehnquist discussed the separation of the particular claims in “substantive” and “procedural” elements and ultimately rejected that separation regarding those claims. Id. 104 S.Ct. at 2021. Under the separation analysis, a procedural claim is wholly collateral to a claim for benefits and therefore administrative exhaustion is not required. A substantive claim is not collateral to a claim for benefits and therefore exhaustion is required. When a claim appears to be both substantive and procedural, the test is whether the procedural claims are “inextricably intertwined” with the claims for benefits.

Within the particular context of a claim asserted under the Medicare Act, Justice Rehnquist concluded that the plaintiffs’ claims were inextricably intertwined with their claims for benefits and therefore not collateral to them. Id. He found that the relief which plaintiffs sought to redress their “procedural” objections is the invalidation of the Secretary’s current policy and a “substantive” declaration from her that the expenses of BCBR surgery are reimbursible under the Medicare Act. Id. In further explaining his finding that the procedural claims for injunctive and declaratory relief were inextricably intertwined with substantive claims for benefits, Justice Rehnquist observed: “Following the declaration which respondents seek from the Secretary — that BCBR surgery is a covered service — only essentially ministerial details will remain before respondents would receive reimbursement,” id. at 2022.

In the present case, the Secretary argues that Ringer compels a finding that claims of the plaintiff class, based on declaratory and injunctive relief, are inextricably intertwined with claims for benefits. According to Ringer, she reasons that where, as here, the plaintiffs seek to invalidate the Secretary’s current policy, their claims are not collateral to claims for benefits and therefore they must exhaust the administrative remedies. Since some members of the plaintiff class did not exhaust their administrative remedies, the Secretary concludes that the class is impermissibly broad and should be narrowed.

The Court disagrees with the Secretary’s broad interpretation of Ringer. Throughout his opinion, Justice Rehnquist referred to the “particular” claims involved. In doing so, he emphasized that the determination of declaratory and injunctive relief on this issue under the Medicare Act would leave the Secretary no alternative but to grant the plaintiffs’ reimbursement claims. The Court’s narrow interpretation of Ringer is reinforced by Justice Rehnquist’s reference to “only essentially ministerial details” remaining after the relief sought if it were granted. Id. at 2022.

In the present case, notwithstanding the plaintiffs’ attempt to invalidate the Secretary’s current policy, the Court finds that more than “ministerial details” remain before members of the plaintiff class will receive benefits. The Court’s order which invalidated two of the Secretary’s regulations required her to hold new disability hearings in order to apply the correct standard for disability as defined by the Court. Johnson v. Heckler, 593 F.Supp. 375, 381-82 (N.D.Ill.1984). Since some members of the plaintiff class may not be awarded disability benefits after the new hearings, an award of benefits is by. no means automatic or ministerial. Johnson v. Heckler, supra, 100 F.R.D. at 74. Therefore, the Court concludes that plaintiffs’ claims are collateral to claims for benefits. Id.

Since the Secretary does not challenge the Court’s order certifying the class on any other factors, i.e., plaintiffs’ substantial interest in prompt judicial review, id., the Court holds that administrative exhaustion is not required and the plaintiff class will not be narrowed.

3. The Severity Regulation

The Secretary argues that recent Congressional action and case law require reconsideration of the September 19, 1984 order and affirmance of the severity regulation’s validity. More specifically, she argues that the Conference Report accompanying the Social Security Disability Benefits Reform Act of 1984, Pub.L. No. 98-460, explicitly endorses her sequential evaluation process and the concept of severity. H.Rep. No. 1039, 98th Cong., U.S.Code Cong. & Admin.News 1984, p. 3038 (Printed at 130 Cong.Record 9827, September 19, 1984). In addition, she contends that recent case law underscores the conclusion that a claimant may be denied benefits on a medical determination of nonseverity alone, without consideration of age, education, and vocational factors. Plaintiffs counter that the Secretary’s severity regulation exceeds an acceptable de minimis threshold test, even though they concede the validity of the severity concept.

The Court finds nothing in the Secretary’s two arguments to persuade it to reconsider its previous order invalidating step two of the sequential process. First, the Conference Report’s general endorsement of the sequential evaluation process does not affect the Court’s narrow ruling that the substitution of “basic work activities” under the regulation for “previous work” under the statute impermissibly increases the claimant’s burden of proof. The Court invalidated neither the sequential evaluation process nor the severity concept. The Court essentially agreed with the plaintiffs that the second step of the sequential process exceeds a de minimis threshold severity test and is therefore outside of the proper scope of the Secretary’s authority.

Second, the case law cited by the Secretary does not affect the previous ruling since the Court explicitly rejected the plaintiffs’ assertion that vocational factors had to be considered at the second step. Johnson v. Heckler, supra, 593 F.Supp. at 379.

4. Combined Effect of Nonsevere Impairments

The Secretary argues that recent Congressional action prevents the Court’s previous order from being applied retroactively on the issue of the combined effect of nonsevere impairments. More specifically, she argues that the 1984 amendment of the Social Security Act which specifically refers to a combination of nonsevere impairments makes a change from the pre1984 law and therefore the new policy should not be applied retroactively since Congress did not so provide. Plaintiffs counter that the amendment is a clarification of, not a change from, the pre-1984 law and as such the amendment is proof of the propriety of this Court’s interpretation of the statute as it existed prior to the amendment.

The issue is whether the 1984 amendment is a change from the old law or a clarification of it. First, the Conference Report specifically states that the pre-1984 statute did not prohibit considering the combined effect of nonsevere impairments: “There is no statutory provision concerning the consideration of the combined effects of a number of different impairments.” 130 Cong.Record 9829 (September 19, 1984). In addition, the Report refers to the Secretary’s regulations and the “current policies” to describe the Secretary’s practice of refusing to combine nonsevere impairments. Therefore, the Court interprets the Report to refer to the Secretary’s policy as being incorrect rather than the statute itself prohibiting the combined effect of nonsevere impairments. This observation suggests that Congress intended to correct the Secretary’s policy by clarifying the statute rather than to change a contrary policy mandated by the old law.

Second, the Court is convinced that Congress intended a clarification, rather than a change, since the 1984 amendment makes the statute consistent with the Court’s interpretation of the statute, Johnson v. Heckler, supra, 593 F.Supp. at 381. Where, as here, subsequent legislation reflects an interpretation of the earlier Act, the amendment is entitled to great weight in determining the meaning of the earlier statute. Brown v. Marquette Sav. and Loan Ass’n, 686 F.2d 608, 615 (7th Cir.1982). Therefore, the Court holds that its September 19, 1984 order may be applied retroactively to members of the plaintiff class.

II. CONCLUSION

Defendant’s motion to alter or amend the Court’s order dated September 19, 1984 is denied. Defendant’s motion to stay the order pending the outcome of the above motion is denied for mootness.

IT IS SO ORDERED.

      . The Supreme Court recently vacated Justice Rehnquist’s imposition of a stay in this case. Heckler v. Lopez, — U.S. -, 105 S.Ct. 583, 83 L.Ed.2d 694 (1984). In doing so, the Court affirmed the preliminary injunction issued by the district court and affirmed in part and reversed in part by the Ninth Circuit Court of Appeals. Lopez v. Heckler, 725 F.2d 1489, (9th Cir.1984). The Court held that the 60-day limitation is not jurisdictional, but, rather, is like a time limitation for initiation of claims under Title VII of the 1964 Civil Rights Act, which the Supreme Court has held is subject to waiver and equitable tolling.