our first case for this afternoon this case number four fifteen zero five zero one sherman realty versus craig thousand at all and we have the appellant has it by miss welsh and then we have the a time shares that are either own by illinois residents or that are located in illinois and because neither of these to these findings is against the manifest weight of the evidence are clearly erroneous then the plaintiff doesn't argue that they are than the directors findings that that the plaintiff acted in l a noire has to be firm and because that has to be affirmed than that is dispositive on the plaintiff's arguments about are the claims as to normally these are well as we know these are professional services contracts and professional services contracts are performed are are when you provide services nation why you provide them to the person where that person is you don't this is what caused for example the court's decision in croswell swanson other cases when there's a difference between cases in which the the person who is buying the services are buying a or taking out a loan goes into another state to do so that's mills for example the bid was titled on case and so on when somebody when somebody win indiana resident for example goes into illinois and takes out a lo everything occurs in illinois indiana can't regulate that because that happens wholly the transaction and holy and that would noir not in indiana and here things happen in different states and you know in several states because this is a nationwide service these brokerage services that the plaintiff provides and so what happens here is that the plaintiff sends out a wrecked mail solicitation to illinois presidents and than and also i mean does other kinds of advertising too on the web and so on you do a google search for you know timeshare resales you come up with their name but again you know the director said we're not we're not talking about we're not wanting to regulate the website advertising of your services we're saying we're regulating this direct mail solicitation tell my residence and also you know illinois is regulating the offering for sale of illinois prop timeshares located in illinois or timeshares  by presidents only so so all of all of this other sort of clutter in there in the record doesn't really matter because what what is important here is what is illinois regulated and what in illinois or belong to illinois sellers now and because where because illinois is regulating only the actions that occur in eleanor i where the services are provided to illinois residents or provided for illinois properties i mean surely nobody would think that illinois cannot regulate the broker for the sale of my condo in chicago for example and so in that if i wanted to ask straw man if i want to explain to to be my broker for my condo sale that nobody nobody would think twice about whether illinois could in fact regulate require licensing for their providing services to me in chicago or that even if i had already moved out of chicago and even moved to texas because the property is located in illinois and the property at issue that's it for which brokerage services are being provided those services need to be regulated by by the state of illinois because no noise has you know obviously a very significant interest in how real estate professionals deal with illinois property you know every state has its own rules about property law about disclosures about you know what transactions are inherently state centric and in fact i mean we know that that the transaction of the property itself is in trust state rights because because property doesn't cross real property doesn't cross state lines real property stays in the state where it is located and so because of that the a sale a real property is itself in trust state but what we're concerned about here are is not the sale of the timeshare itself but the sale of the brokerage activities and the brokerage activities themselves and so again what we're concerned about is the solicitation of illinois residents for brokerage services by anyone who wants to give those provide those services to someone who lives in illinois or for them on my property and then someone who offers for sale the the property a timeshare that belongs to someone and that we know you know like consumer in illinois seller stillman himself testified you know we send direct mail everywhere we get lists of people who own timeshares and we sell you know they don't do cold calls but they do sort of cold mailings they send direct mail to people who own timeshares and say do you if you want to sell we can provide you these brokerage services we world we will take care of that for you we will get your timeshare sold and so on and then you know the the and the evidence shows the nature of time sharing even like real estate now generally because people move so much you know the nature of the brokerage services are such that they might implicate three states they might implicate you know the seller states this state of the time sharing the buyer but but here where you know illinois is concerned only about two things they're concerned about to direct mail advertising to eliminate residence and they're concerned about the excuse me the offering for sale of timeshare is located in illinois or owned by illinois residents and that's where the nexus is to illinois and that's why the directors decision that the plaintiffs acted in illinois that you know acted as a timeshare be a resale agent in illinois is is manifestly correct it's not against the manifest weight of the evidence in the notes again when you provide services as they did to mr humphries for example you know they advised him how to set the asking price they sent the contract in to illinois mr sherman himself agreed that the contracts that he sent to silver to the silver leaf developer were executed in illinois and certainly mr humphreys executed the contract by signing it in illinois all of these things there's all of these things took place in illinois so there can't be a wholly extraterritorial effect of the director's enforcement of the act against straw men because straw men is acts as a nationwide i mean if you meant to access a nationwide broker and because it acts as a nationwide broker and provides nation services nationwide it's just like the physicians and the lab in costel what when you say hold yourself out as a nationwide service provider and you provide services to people in other states personal services to people in other states those other states can regulate those services and you know the states have a substantial interest in regulating  professions i mean there can't be any dispute about that and certainly and martinez noted the illinois supreme court's decision coldwell banker that illinois has a very substantial compelling interest in regulating real estate recipients in illinois of those services or again that the property is located in illinois there is with regard to the commerce the non church extraterritorial  component of the plaintiff's claims this is the pike test you know in the pipe test the plaintiff has the burden not to us the plaintiff has the burden of showing that the regulations are clearly excessive in relation generally to protect consumers to keep you know their profession integrity there's there there can be no question that that states have an interest a very strong governmental interest in regulating the profession s and so the question is what so what's the burden on the plaintiffs while the only burden for which the plaintiffs gave actual evidence or for which there's any evidence in the record is that there is a there was an initial five hundred dollar registration fee then there was two hundred fifty dollars a month or sorry year to you know to riyadh and and then to take the licensing exam but again you know taking having to take an exam  and paying a you know modest fee every year is not a substantial burden and certainly not clearly excessive in relation to the benefits to illinois citizens and illinois property transactions and  addition the you know this isn't like a hike i mean pipe i think is an excellent example of what is a substantial burden and there the burden was going to be that the plaintiffs who was bulk transporting rather than packaging them in arizona would have to to comply with the arizona law would have to build a two hundred thousand dollars facility that is a substantial burden you know here there's if there is nothing like that the plaintiff was saying that they had made i think it was one and a half million well dollars a year i believe and so the burden even if every state has been identified all the structure and we don't know that because there's no evidence in the record as to other states fee structures but even assuming that that were true this would be like less than one percent of the fees that they get from brokerage fees not counting the fees that they take to put to put them put the property on their website and offer it for sale and again this offer for sale the plaintiff says well we're really just advertising and there this is not just advertising s p o is just advertising you know the for sale by owner website it gives the name of the person who's selling and i guess the sale price you know the plaintiff's web site does not give that information it's not it's not you know the equivalent of a classified ad in a newspaper for a puppy where there's a phone number and the price of the puppy this is only the gateway to getting the brokerage fees for you know from the person because you can't the person who sees a how the time share that well i believe mr straw men testified that they try to work it out with the buyer they try to get a good price and then once once there's apparently some agreement on this you know how i can tell you better perhaps but as i understand it once there's an agreement about the price then there seller is told that there will be a commission of ten percent or so you know before hand i mean they don't sign the commission agreement until there's actually a buyer in hand who knew choose to testified what happens is they are told we will put your we will put your timeshare up on our web site with information about you know the particulars the time and how many bedrooms and so on blah blah blah and then and  once a buyer comes along and agrees to a price and that's a commission would be triggered is a commission agreement executed yes you mentioned turn present well that those were the only sort of incidental benefits that come with going to providing services in another state and and thus are not the ones that that that would be so burden some that they would clearly be excessive in relation to the benefits to the stage from protecting consumers and and and regulating real property transactions in illinois for the transactions of real property that's you're only two forms of speech that are an issue here the direct mail solicitation of illinois residents and the offering for sale of property belonging to illinois sellers or property look physically located in illinois those are the two forms speech that are at issue here and those of the two you know commercial speech is the speech that offers you know a transaction and those of the two transactions the direct mail says we want you to you know take it you know to buy our services is you know in that sense and the offer for sale is obvious an offer to sell to the world of these time shares again only the time shares that that belong to people who live in illinois or timeshares that are physically located in illinois and so the is there a substantial interest well again you know the iowa supreme court has said that illinois has a substantial interest in regard to it and so the question is does does does the actual directly advance those interest in the directed panspermia test is whether it is either ineffective or not or you know are just have an effect it's not remote and certainly there is a direct correlation between regulating real estate brokerage and and the and the state's interest and regulating the profession of real estate professional s and so on the question is is it does it serve is is is is the fact is it could be better served by other means and the answer is no here because you know if the plaintiffs suggest well you  plaintiff in illinois seller in illinois property to someone who owns a property in illinois timeshare could just file a consumer fraud act well again you know given the resistance of plaintiffs to this action now why did you know it when it did stuff i know and certainly acted in illinois i mean that is not a good substitute for licensing someone who comes into illinois and provide services to illinois presidents or for properties located in illinois and a texas regular is what texas regulators can do this texas regulators perfect protect texas consumers their interest is in protecting their own citizens and their own transactions they have not nearly the and trust that the department has as if i sold my condo i would need a broker licensed in illinois so too does the act regulates the work that the plaintiff does thank you thank you  obtain a license to advertise services that it performs elsewhere and advertising on the answer on line susan advertising on the internet violates the first amendment and the application of illinois laws to strum in violates the commerce clause and if the court will recall the administrative law judge found this from its operations were conducted exclusively in texas to the extent the court has any question regarding whether or not these are were made for the circuit court or the agency they in fact were and i can refer the court to the agency record eight point four eight thirty four and eight thirty six of these arguments were made and they were in fact preserved  miss construing that statement i mean i don't think there's any argument between the parties that infantile a person decides to accept services that they are likely signing a contract in illinois actually no you honor we're not we're not in agreement on that mr strong his testimony was it was probably he didn't know right now it was myself and is now likely that they're going to sign an agreement in illinois if it's if it involves an illinois resident and the illinois resident is in illinois yes the only oil resident probably signs it in illinois however the illinois resident is not hiring a strawman to perform any service in illinois and that is a critical distinction and the scary are no basis relied on heavily by the agency in this case actually is germane because in that case you had an illinois lawyer who wanted to practice in the indiana courts and the court said well then you have to go take an indiana our license exam in order to do that but what the court didn't do is say oh well if you're going to represent indiana a residence in illinois courts you also have to go get an illinois and indiana license and that's exactly what the state is saying here and it's a completely different circumstances so when somebody is performing a personal service contract which the state agrees that this is and it's not transferring an interest in land and that is an important distinction what you look at is where the service is being performed and in fact that's what the seventh circuit did in paulson and we cited that in our in our brief but there are days they are held a commission award to a broker for wisconsin property for a wisconsin resident even though the broker didn't have a wisconsin license because all the negotiations all the activities involved in the brokering took place in illinois i believe at this illinois it wasn't in wisconsin and so and that actually matters that makes a difference for this case  and i want to make one point before i forget it there is nothing in the record that supports the statement that texas is only interested in protecting tax and said that it doesn't have any interest in  regulating its own licensees that's not in the record before this court and in fact that's not the case texas regulates strawman and texas will consider the complaints made by nonresidents about  brokers in transactions that don't involve any illinois residents at all and what is in the record is that stroman has texas resident clients that own illinois timeshares and why illinois telling this court is that stroman cannot offer those illinois time shares up for sale on behalf of its texas resident client unless it also has an illinois license were  who is providing those services was in illinois but mr humphries testified very clearly at the agency proceeding that he did not hire stroman to do anything in l a noire again it goes back to where are those personal services being office because they're dealing with over your property for sale to well let's but i understand you're saying but your honor if i could answer your question with another example so you have an illinois resident who hires a maryland broker to sell a maryland beach condo using illinois rationale that mill maryland broker who's selling the maryland beach condo now also has to have a license in illinois and that's not the law because that he illinois resident is not hiring that maryland broker to do anything in illinois but that you know in iraq as it is hiring the maryland broker to do is to engage in the transaction worth i think that's completely legal your honor that's where we're there it's not a says now does not trigger illinois licensing requirements and it can't because it would violate the first amendment if that were the case you know let's leave aside the first the statutes interpret it because that would be imposing illinois law on a transaction that will ultimately take place entirely outside outside the state and when you look at the mills case that we cited in our briefs that's what happened there and so the illinois it's escaping me right now residents of one state went into the other state and said i want to i want a loan and they said ok fine give me your car keys but by the way we're going to record the existence of this lien with the m v a in your home state that was train that was a transaction that was still considered to have taken place completely outside the state that was trying to regulate i'm sorry ron i misheard you i thought you said illinois residents and own property and illinois i thought you had a conjunction there this her finding was an either or it was illinois residents or owners paulson case your honor out of the seventh circuit tells you why because even if you have an owner and a property in that stay and you hire a broker i think and possibly it was a wisconsin property wisconsin owner and and  illinois illinois broker the broker's activities in negotiating the sale of that property took place in illinois and tennessee and the commission therefore could be awarded in that case because the activities related that that he was hired to do took place outside the state of wisconsin and in fact the court decided that the statu didn't reach that far so it didn't have to reach the commerce clause fashion in that litigation and so no your honor it would it would not require that he turned down that opportunity and when you look at time shares it is  and the testimony was on rebutted and the agency that they are buying by their very nature interstate particularly the timeshare resale market because you have buyers in one state sellers in another state that is correct but she didn't have the evidence to find that he was doing it in illinois  time share i've never used it called straw man up and say can you help me and there was back and forth and then he called strawman back i mean he didn't sign up for this program in that in that first conversation and so  that would likely be the case here none of this makes any difference because there are turks is preserved or it's a property and who knows where the color came from i mean the collar could have been somebody and i'm from maryland values maryland it doesn't mean that that activity occurred within within the state of illinois or that it's appropriate for the state of illinois to to regulate that transaction advertise it brokerage arrangements for callers behalf of the owners of the property wherever they may be where every baby is through national publications and through the internet but that's more than this is well first of all the advertisements and the print ads and the direct mail were offers said you know if you have a timeshare to sell or if you have a timeshare if you want to buy a timeshare call strawman that's advertising your honor that's just advertising the service so i don't think that counts i fully regulated yes potentially for property in illinois well there's no evidence in this case and they do that i have a record i'm pretty anywhere oh yeah they would do it for a property anywhere but there i you know once again  the suggestion that you have to have an illinois license in order to do this is it is unnecessary because the purpose of the illinois regulatory statutes is to protect illinois residents it's not to protect illinois dirt that's not what real estate brokerage services are they are personal services contracts that relate to marketing ok so that's point number one such just because you have illinois dirt doesn't really make any difference at all and the paulson case would also tell you that that's true now the what happens then is you look at well what are the requirements of the of the texas licensing and if you look at i believe it's it was response exhibit thirteen that was filed in the administrative action it shows the educational requirements texas has some of the highest educational criteria in the nation it's over three and a half times as much education as what this state requires and so there is nothing the state of illinois did not put on a single bit of evidence to prove that there was some specific he illinois you know arcane that was required in order for straw men to sell or broker the sale of mr humphries tennessee timeshare that they made illinois licensing appropriate or necessary or that it furthered any governmental interest and when you get to the first amendment analysis that absolutely does matter because it has to be a less are the re less restrictive means of regulating and the fact of the matter is is that texas is is right there and texas has the authority to regulate and if straw into something really bad and illinois doesn't cost all which is relied on heavily by the state here from could be sued in illinois and i'd like to talk about casa just for a minute and this is important because the costs will case was a personal jurisdiction case in hospital what that case involved was the services by a michigan pathologist who did a tissue asked say of an illinois resident and the illinois resident sued the michigan pathologist and illinois and the court said yes you have personal jurisdiction that court didn't say no michigan pathologist you can't ask say illinois residents tissue unless you also have an illinois medical license that was not the holding in that case and that's material so it was fine for them to ship the tissue off to michigan to be state and that matters too because cost also demonstrates that there are there is an ability for the injured party to sue in illinois and i would like to make it abundantly clear that there was not a shred of evidence that any of strawman's advertisements were inaccurate or misleading and in the circuit court the agency considered such i mean it's strong it's not some fly by night organization i mean in the five years prior we we they want to buy for a hundred thousand dollars and we have this commission agreement that we told you about that now we want you to sign that pay us our fee clearly would be signing a contract with the mill resident based on an event now occurring in the state of illinois where the owner a resident pursued it through an area of the truman place is it your position that at that point there's still insufficient contact with illinois to justify regulating that aspect of what's going on yes i hear paulson that would be the case right there what under paulson that would be the case for the way here thank you thank you very much your honor now and they're the reason that is the case your honor again because it goes to where the services were provided by the broker it's because those services the negotiation for the sale those efforts didn't occur in el annoy they occurred throughout frankly throughout the world that offering took place throughout negotiation for getting it sold and so it would be governed by the state for the service provider was justice and scary on where the illinois lawyer was governed by illinois law thank you thank you very much  it's true that the central question here is where the services provided the agency found that the services were provided in eleanore by that the solicitation occurred in illinois and the services are provided in illinois and that's and that's in you know the and that's consistent with custom which said when you're a nationwide service provider and you provide services to an illinois president you provide those services in illinois and that's the same thing with quick  pay it's also the same thing with the minnesota supreme court and because their reasoning is really good because there's a big difference between if if the humphreys had gone to texas and  broker their their time share that would we would not be saying that that needs to be oh that's not the case what happens here is that the straw men send direct mail solicitation to illinois residents or for other noyo owners of illinois timeshares to offer its services and it also offers services provided so services to illinois residents and for illinois properties and when you provide services there's there are two groups of sellers here that are that illinois has the right to regulate for brokerage services two one is illinois residents who own timeshares where but those timeshares might be the other is illinois timeshares that are located in l a no i which are no different from from everybody's house in springfield everybody's house in chicago everybody's house in illinois when you are selling real profit when you are brokering a re offering your brokerage services for real property in illinois eleanor he has the right the duty to regulate those because you want competence in illinois real property law and only illinois regulation guarantees that that's why there's an illinois exam because that guarantees competence in el annoyed real property law and transaction you know transactions in real property that exists in illinois  again there's a huge difference between the mills case which is the case where the indiana person goes into illinois and where deals with an eleanor's lender who has no physical presence in indiana the again the l and the indiana resident voluntarily go to another state to illinois and because the the indiana resident goes out of his own state to seek services that by indiana so because the people or the war rosen that's right because they are physically in illinois and because they don't physically go to another state to seek that other service provider services just the illinois residents didn't go to michigan and say please give us your services they you know it the michigan provider of services in cost off said we are nationwide service provider and we are providing our services everywhere and because they said that because they in fact did that they were the illinois public or found that they were providing their services in illinois and so even though they feel they have what's in michigan and the doctors were in michigan everybody was in michigan and that's their operations just to strawman's operations here in texas that michigan labs operations work in in michigan but they provided services in illinois and that's the difference yes yes if they if they were a resident of those states yes yes they would because they i mean yes because they do yes is that they could say well i think any anywhere where you where a business opens up a base real properties but but if there were if there were no relationship between a seller or the real property and illinois eleanor i wouldn't regulate but there but then he very soon injured let's assume stroman had no illinois with regard to the humphreys in particular yes i mean because because if the humphrey said no connect it if the seller whoever it is has no connection with indiana then certainly illinois wouldn't need to regulate that transaction if the if the seller wasn't related to the noise and the property wasn't located in illinois then illinois wouldn't have an interest in regulating the broker of that transaction that's happening completely separate from physically located again it's the physical location of the seller that matters the physical location well the physical location of the seller or the physical location of the property it would result so the claim of the department by the seller because the seller is physically located in the state that wants to regulate whether that seller might be and the property itself wherever that property might be whatever whatever state has th relationship to the recipient of the services or the physical property that said issue that state has the right to regulate thank you council will take this matter hundred