Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Private mortgage foreclosure sales business alleges monopoly by county officials, (Dec 23, 2013)

By Linda O’Brien, J.D., LL.M.

Government officials have engaged in anticompetitive conduct and created a monopoly by precluding private selling officers from conducting mortgage foreclosure sales, and thereby increasing the costs of mortgage foreclosures, according to a complaint filed in the federal district court of Chicago (Intercounty Judicial Sales Corporation v. County of Lake, Illinois, December 20, 2013).

Intercounty Judicial Sales Corporation is in the business of conducting mortgage foreclosure sales as a private selling officer. The complaint states that, prior to 1987, all judicial sales undertaken in mortgage foreclosure proceedings were conducted by the sheriffs or circuit court judges in the counties in which the foreclosed properties were located. The Illinois legislature enacted changes to procedures governing foreclosures in the Illinois Mortgage Foreclosure Law, including the appointment of private selling officers as an alternative to the previously mandated sheriff or judge’s sale. In 2013, the state supreme court adopted a rule that allowed any party to a foreclosure proceeding to choose whether to use a private selling officer or the county sheriff. Since the enactment of the law, Intercounty has been routinely appointed to conduct mortgage foreclosure sales in counties throughout the state. Intercounty charges lower fees than the county sheriffs and has developed efficient means of handling mortgage foreclosure sales, according to the complaint.

Intercounty alleges that, since the enactment of the law, county officials and the sheriff in Will County continued with its practice of using the county court auctioneer to conduct all judicial sales. As a result of this practice, Intercounty has been effectively excluded from being appointed to conduct judicial sales within the county. Although Intercounty’s request to government officials that the county open the market for judicial sales to private competition was rejected, Intercounty remains ready, willing, and able to conduct judicial sales in Will County.

In 2009, the Lake County Board established a Judicial Sales Division and adopted an ordinance authorizing the county sheriff to conduct all foreclosure sales in Lake County. Since the adoption of the ordinance, the sheriff conducts virtually all of the judicial sales in Lake County. Intercounty remains ready, willing, and able to conduct judicial sales in Lake County, the complaint alleges.

The complaint claimed that the acquisition of a monopoly within the two counties was secured by illegal means, has increased the costs of judicial sales, and has impacted the substantial and uninterrupted flow of products, services, and contracts in interstate commerce. Although the law encourages the use of private selling officers to expedite the judicial sales process, the county officials have effectively precluded private selling officers from the market and established a monopoly through their exclusive control over the judicial sales business. Since the county officials are immune from antitrust damages, Intercounty does not have an adequate remedy at law.

Intercounty asserts claims for interference with contractual relationships, unlawful exercise of governmental authority and violations of Section 2 of the Sherman Act and the due process and equal protection clauses of the U.S. Constitution. The action seeks declaratory and injunctive relief, treble damages, costs of suit, attorneys’ fees, and any other just and proper relief.

The case is No. 1:13-cv-09093.

Attorneys: Bruce L. Goldsmith (Dykema Gossett PLLC) for Intercounty Judicial Sales Corporation.

Companies: Intercounty Judicial Sales Corporation

News: Antitrust IllinoisNews