1-1 By: Carona, Shapleigh S.B. No. 513
1-2 (In the Senate - Filed February 15, 1999; February 17, 1999,
1-3 read first time and referred to Committee on Natural Resources;
1-4 April 6, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 4, Nays 2; April 6, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 513 By: Barrientos
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to a restriction on the use of goods by a purchaser of the
1-11 goods.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 15.05, Business & Commerce Code, is
1-14 amended to read as follows:
1-15 Sec. 15.05. Unlawful Practices. (a) Every contract,
1-16 combination, or conspiracy in restraint of trade or commerce is
1-17 unlawful.
1-18 (b) It is unlawful for any person to monopolize, attempt to
1-19 monopolize, or conspire to monopolize any part of trade or
1-20 commerce.
1-21 (c) It is unlawful for any person to sell, lease, or
1-22 contract for the sale or lease of any goods, whether patented or
1-23 unpatented, for use, consumption, or resale or to fix a price for
1-24 such use, consumption, or resale or to discount from or rebate upon
1-25 such price, on the condition, agreement, or understanding that the
1-26 purchaser or lessee shall not use or deal in the goods of a
1-27 competitor or competitors of the seller or lessor, where the effect
1-28 of the condition, agreement, or understanding may be to lessen
1-29 competition substantially in any line of trade or commerce.
1-30 (d) It is unlawful for any person to sell or contract for
1-31 the sale of any goods, whether patented or unpatented, for use,
1-32 consumption, or resale or to fix a price for such use, consumption,
1-33 or resale or to discount from or rebate upon such price, on the
1-34 condition, agreement, or understanding that the purchaser must,
1-35 after use, discard the goods or return the goods to the seller,
1-36 where the effect of the condition, agreement, or understanding may
1-37 be to lessen competition substantially in any line of trade or
1-38 commerce. An action under this subsection may be initiated only by
1-39 the state.
1-40 (e) It is unlawful for any person to acquire, directly or
1-41 indirectly, the whole or any part of the stock or other share
1-42 capital or the assets of any other person or persons, where the
1-43 effect of such acquisition may be to lessen competition
1-44 substantially in any line of trade or commerce. This subsection
1-45 shall not be construed:
1-46 (1) to prohibit the purchase of stock or other share
1-47 capital of another person where the purchase is made solely for
1-48 investment and does not confer control of that person in a manner
1-49 that could substantially lessen competition;
1-50 (2) to prevent a corporation from forming subsidiary
1-51 or parent corporations for the purpose of conducting its
1-52 immediately lawful business, or any natural and legitimate branch
1-53 extensions of such business, or from owning and holding all or a
1-54 part of the stock or other share capital of a subsidiary, or
1-55 transferring all or part of its stock or other share capital to be
1-56 owned and held by a parent, where the effect of such a transaction
1-57 is not to lessen competition substantially;
1-58 (3) to affect or impair any right previously legally
1-59 acquired; or
1-60 (4) to apply to transactions duly consummated pursuant
1-61 to authority given by any statute of this state or of the United
1-62 States or pursuant to authority or approval given by any regulatory
1-63 agency of this state or of the United States under any
1-64 constitutional or statutory provisions vesting the agency with such
2-1 power.
2-2 (f) [(e)] It is unlawful for an employer and a labor union
2-3 or other organization to agree or combine so that:
2-4 (1) a person is denied the right to work for an
2-5 employer because of membership or nonmembership in the labor union
2-6 or other organization; or
2-7 (2) membership or nonmembership in the labor union or
2-8 other organization is made a condition of obtaining or keeping a
2-9 job with the employer.
2-10 (g) [(f)] It is not unlawful for:
2-11 (1) employees to agree to quit their employment or to
2-12 refuse to deal with tangible personal property of their immediate
2-13 employer, unless their refusal to deal with tangible personal
2-14 property of their immediate employer is intended to induce or has
2-15 the effect of inducing that employer to refrain from buying or
2-16 otherwise acquiring tangible personal property from a person; or
2-17 (2) persons to agree to refer for employment a
2-18 migratory worker who works on seasonal crops if the referral is
2-19 made irrespective of whether or not the worker belongs to a labor
2-20 union or organization.
2-21 (h) [(g)] Nothing in this section shall be construed to
2-22 prohibit activities that are exempt from the operation of the
2-23 federal antitrust laws, 15 U.S.C. Section 1 et seq., except that an
2-24 exemption otherwise available under the McCarran-Ferguson Act (15
2-25 U.S.C. Sections 1011-1015) does not serve to exempt activities
2-26 under this Act. Nothing in this section shall apply to actions
2-27 required or affirmatively approved by any statute of this state or
2-28 of the United States or by a regulatory agency of this state or of
2-29 the United States duly acting under any constitutional or statutory
2-30 authority vesting the agency with such power.
2-31 (i) [(h)] In any lawsuit alleging a contract, combination,
2-32 or conspiracy to fix prices, evidence of uniform prices alone shall
2-33 not be sufficient to establish a violation of Subsection (a) of
2-34 Section 15.05.
2-35 (j) [(i)] In determining whether a restraint related to the
2-36 sale or delivery of professional services is reasonable, except in
2-37 cases involving price fixing, or other per se violations, the court
2-38 may consider, but shall not reach its decision solely on the basis
2-39 of, criteria which include:
2-40 (1) whether the activities involved maintain or
2-41 improve the quality of such services to benefit the public
2-42 interest; and
2-43 (2) whether the activities involved limit or reduce
2-44 the cost of such services to benefit the public interest.
2-45 (k) For purposes of Subsection (j) of this section
2-46 [subsection], the term "professional services" means services
2-47 performed by any licensed accountant, physician, or professional
2-48 engineer in connection with his or her professional employment or
2-49 practice.
2-50 SECTION 2. Subsections (a) and (b), Section 15.20, Business
2-51 & Commerce Code, are amended to read as follows:
2-52 (a) Suit to Collect Civil Fine. The attorney general may
2-53 file suit in district court in Travis County or in any county in
2-54 the State of Texas in which any of the named defendants resides,
2-55 does business, or maintains its principal office on behalf of the
2-56 State of Texas to collect a civil fine from any person, other than
2-57 a municipal corporation, whom the attorney general believes has
2-58 violated any of the prohibitions in Subsection (a), (b), [or] (c),
2-59 or (d) of Section 15.05 of this Act. Every person adjudged to have
2-60 violated any of these prohibitions shall pay a fine to the state
2-61 not to exceed $1 million if a corporation, or, if any other person,
2-62 $100,000.
2-63 (b) Suit for Injunctive Relief. The attorney general may
2-64 file suit against any person, other than a municipal corporation,
2-65 in district court in Travis County, or in any county in the State
2-66 of Texas in which any of the named defendants resides, does
2-67 business, or maintains its principal office on behalf of the State
2-68 of Texas to enjoin temporarily or permanently any activity or
2-69 contemplated activity that violates or threatens to violate any of
3-1 the prohibitions in Section 15.05 of this Act. In any such suit,
3-2 the court shall apply the same principles as those generally
3-3 applied by courts of equity in suits for injunctive relief against
3-4 threatened conduct that would cause injury to business or property.
3-5 In any such suit in which the state substantially prevails on the
3-6 merits, the state shall be entitled to recover the cost of suit.
3-7 Upon finding a violation of the prohibition against acquiring the
3-8 stock, share capital, or assets of a person in Subsection (e) [(d)]
3-9 of Section 15.05 of this Act, the court shall, upon further finding
3-10 that no other remedy will eliminate the lessening of competition,
3-11 order the divestiture or other disposition of the stock, share
3-12 capital, or assets and shall prescribe a reasonable time, manner,
3-13 and degree of the divestiture or other disposition.
3-14 SECTION 3. Subdivision (1), Subsection (a), Section 15.21,
3-15 Business & Commerce Code, is amended to read as follows:
3-16 (1) Any person or governmental entity, including the
3-17 State of Texas and any of its political subdivisions or
3-18 tax-supported institutions, whose business or property has been
3-19 injured by reason of any conduct declared unlawful in Subsection
3-20 (a), (b), [or] (c), or (d) of Section 15.05 of this Act may sue any
3-21 person, other than a municipal corporation, in district court in
3-22 any county of this state in which any of the named defendants
3-23 resides, does business, or maintains its principal office or in any
3-24 county in which any of the named plaintiffs resided at the time the
3-25 cause of action or any part thereof arose and shall recover actual
3-26 damages sustained, interest on actual damages for the period
3-27 beginning on the date of service of such person's pleading setting
3-28 forth a claim under the antitrust laws and ending on the date of
3-29 judgment (the rate of such interest to be in accordance with Texas
3-30 law regarding postjudgment interest rates and the amount of
3-31 interest to be adjusted by the court if it finds that the award of
3-32 all or part of such interest is unjust in the circumstances), and
3-33 the cost of suit, including a reasonable attorney's fee; provided,
3-34 however, that if the trier of fact finds that the unlawful conduct
3-35 was willful or flagrant, it shall increase the recovery to
3-36 threefold the damages sustained and the cost of suit, including a
3-37 reasonable attorney's fee; provided that interest on actual damages
3-38 as specified above may not be recovered when recovered damages are
3-39 increased threefold.
3-40 SECTION 4. Subsection (b), Section 15.21, Business &
3-41 Commerce Code, is amended to read as follows:
3-42 (b) Suit for Injunctive Relief. Any person or governmental
3-43 entity, including the State of Texas and any of its political
3-44 subdivisions or tax-supported institutions, whose business or
3-45 property is threatened with injury by reason of anything declared
3-46 unlawful in Subsection (a), (b), [or] (c), or (d) of Section 15.05
3-47 of this Act may sue any person, other than a municipal corporation,
3-48 in district court in any county of this state in which any of the
3-49 named defendants resides, does business, or maintains its principal
3-50 office or in any county in which any of the named plaintiffs
3-51 resided at the time the cause of action or any part thereof arose
3-52 to enjoin the unlawful practice temporarily or permanently. In any
3-53 such suit, the court shall apply the same principles as those
3-54 generally applied by courts of equity in suits for injunctive
3-55 relief against threatened conduct that would cause injury to
3-56 business or property. In any such suit in which the plaintiff
3-57 substantially prevails on the merits, the plaintiff shall be
3-58 entitled to recover the cost of suit, including a reasonable
3-59 attorney's fee based on the fair market value of the attorney
3-60 services used.
3-61 SECTION 5. The change in law made by this Act applies only
3-62 to a sale or contract for the sale of goods entered into on or
3-63 after the effective date of this Act.
3-64 SECTION 6. This Act takes effect September 1, 1999.
3-65 SECTION 7. The importance of this legislation and the
3-66 crowded condition of the calendars in both houses create an
3-67 emergency and an imperative public necessity that the
3-68 constitutional rule requiring bills to be read on three several
3-69 days in each house be suspended, and this rule is hereby suspended.
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