(e) are adequately contained, packaged, and
labeled as the agreement may require; and

(£) conform to the promises or affirmations of
fact made on the container or label if any.

As analysis will reflect, neither side seems to have it quite
right on that subject.

First, it is something of an oversimplification to say, as
does Funky's Mem. 12 (echoed in Waldron's Mem. 14 and adopted by
each of the other movants):

Moreover, the implied warranty of merchantability under

810 ILCS 5/2-314 applies to the condition of the

product, not the manner in which it was marketed.

That of course ignores the earlier-quoted subparagraph (f), which
expressly includes the manner in which the goods themselves are
represented by their container or affixed label. And the Act
relatedly prohibits conduct that “directly or indirectly offers
or displays for sale or sells a good...in a manner that falsely
suggests it is Indian produced, an Indian product, or the product
of a particular Indian or Indian tribe or Indian arts and crafts
organization” (25 U.S.C. §305e(a)).

On the other side of the coin, it seems an extraordinary
stretch of the English language to urge, as Bear Tracks does (or
perhaps more accurately, as Native American Arts does), that just
because a product seems to draw on an Indian motif or design it
necessarily runs afoul of the Act--and that it “therefore”

violates the earlier-quoted UCC provision. Instead this Court


contribution is fatal to its claims for indemnity in each of its
pleadings.

But as to Bear Tracks' equitable claim of implied indemnity
(Count Iv), it asserts that it exhibits the assertedly offending
goods for sale only in the condition that its suppliers--the
cross-defendants and third-party defendants--have delivered them.
Hence its claim is for what has been labeled “upstream
indemnity,” a concept endorsed (though not so labeled) in
Maxfield v. Simmons, 96 I11.2d 81, 449 N.E.2d 110 (1983); see
also the recognition of that notion under Illinois law in

Bethlehem Steel Corp. v. Chicago E. Corp., 863 F.2d 508, 518-21

(7 Cir. 1988). On that premise Count IV of each of Bear
Tracks' two pleadings survives.

That leaves for consideration Count I of each pleading,
which is captioned “Breach of the Implied Warranty of
Merchantability” and invokes this provision of the Illinois
Commercial Code, 810 ILCS 5/2-314(2):

(2) Goods to be merchantable must be at least such as

(a) pass without objection in the trade under
the contract description; and

(b) in the case of fungible goods, are of fair
average quality within the description; and

(c) are fit for the ordinary purposes for which
such goods are used; and

(d) run, within the variations permitted by the
agreement, of even kind, quality and quantity
within each unit and among all units involved; and


would consider the likely potential applicability of that ucc
provision to be limited to situations in which the product is
accompanied by a label or tag that is sufficiently suggestive to
contravene the above-quoted provision of the Act.

This Court has done its best to wade through the enormously
bulky group of exhibits attached to Native American Arts' AC to
see how the just-stated analysis plays out. In those terms it
does not appear that Nine Mile Creek (to which AC 451 ascribes
only Ex. 45) or Sandstone (whose only products are depicted in AC
Exs. 26 and 44) can be sued under Count I, and they are
accordingly dismissed from that statutorily-based claim under
Illinois law. As to all the other cross-defendants and third-
party defendants, the Count I claims will stand for the present.’

Conclusion

As to the Bear Tracks Cross-Claim and its Third-Party
Complaint:

1. Count I is dismissed as to Nine Mile Creek and

Sandstone, but not as to the other movants.

2. Count II is dismissed in its entirety.
3. Count III is also dismissed in its entirety.

4. Count IV survives dismissal as it has been limited

3 It should be said parenthetically that Judge Kocoras' Ho-
Chunk opinion dealing with a like claim at *11-*12 does not bear
at all on the current discussion, because that opinion dealt with
a potential claim under 810 ILCS 5/2-314(e) rather than (f).

5


Minute Order Form (06/97)

r

H

United States District Court, Northern District of Illinois

Name of Assigned Judge Milton I. Shadur Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 01C 1618 DATE 7/10/2002
CASE Native American Arts, Inc. vs. Bundy-Howard
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
f the motion bei d.
MOTION: of the motion being presented.]
DOCKET ENTRY:
qd) Qo Filed motion of [ use listing in “Motion” box above.]
(2) im} Brief in support of motion due
G) o Answer brief to motion due. . Reply to answer brief due
(4) Qa Ruling/Hearing on set for at
(5) QO Status hearing[held/continued to] [set for/re-set for] on___setfor at
(6) QO Pretrial conference[held/continued to] [set for/re-set for] on set for at
(7) Qa Trial[set for/re-set for] on at
(8) a [Bench/Jury trial] [Hearing] held/continued to at
(9) Qa This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) OO General Rule21 OO FRCP41(a)(1) [1 FRCP41(a)(2).
ao) «=f [Other docket entry] Enter Memorandum Opinion and Order. As to the Bear Tracks Cross-Claim
and its Third-Party Complaint: 1. Count 1 is dismissed as to Nine Mile Creek and Sandstone, but not as
to the other movants. 2. Count II is dismissed in its entirety. 3. Count III is also dismissed in its entirety.
Count IV survives dismissal as it has been limited by Bear Tracks’ representation. All dismissals ordered
are intended to be with prejudice, though no Fed. R. Civ. P. 54(b) determinations are made here. All
surviving claims must be answered on or before July 24, 2002. (1i-) , 14 »)
al) [For further detail see order attached to the original minute order.]
No notices required, advised in open court. ~ Document
7 A ‘Number:
No notices required number af notices
o | Notices mailed by judge’s staff. aw 11 20
‘Notified counsel by telephone. date docketed
Docketi il notices. 5
ee ‘ting to mail notices. j oa | 2A
Mail AO 450 form. docketing deputy initials
Copy to judge/magistrate judge.
mHor2002
courtroom dase mailed notice
SN deputy’s ~ .
initials Or Q3.93> x
Dateninhl Aceived in
central Clerk’s Office naling deputy intats

W

f }


by Bear Tracks' representation.
All dismissals ordered here are intended to be with prejudice,
though no Fed. R. Civ. P. 54(b) determinations are made here.

All surviving claims must be answered on or before July 24, 2002.

Milton I. Shadur
Senior United States District Judge

Date: July 10, 2002


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

NATIVE AMERICAN ARTS, INC.,
Plaintiff,

v. No. 01 C 1618

DOCKETED

BUNDY-HOWARD, INC., etc., et al.,

JUL 1 1 200
Defendants. 2
MEMORANDUM OPINION AND ORDER
Bundy-Howard, Inc. d/b/a Bear Tracks (“Bear Tracks”), the

principal but by no means the sole defendant in this action
brought under the Indian Arts and Crafts Act and the Indian Acts
and Crafts Enforcement Act of 2000 (collectively “Acts”) by
Native American Arts, Inc. (“Native American Arts”), has fileda
Cross-Claim against codefendants Feathers, Funky Fiber Works
(“Funky”) and Nine Mile Creek and a Third-Party Complaint against
The Waldron Corporation (“Waldron”)! and Sandstone Creations,

Inc. (“Sandstone”). Bear Tracks seeks to lay off, against its
several targets in its Cross-Claim and Third-Party Complaint,
part or all of its potential liability to Native American Arts

under the Second Amended Complaint.? Each of those targets has

1 Initially Tricia Waldron was named as the third-party

defendant, but that designation was erroneous and has been
corrected by agreement.

2? Because Count I of that pleading essentially
incorporated, without repeating, virtually all of the allegations
of the Amended Complaint (“Ac”), this opinion's references to

Native American Arts' claims will advert only to the AC.

sie


in turn moved for dismissal.

To the extent that Bear Tracks seeks contribution, either
equitable (Count II) or under the Acts (Count III), this Court
agrees with and adopts the excellent discussion by its colleague
Judge (now Chief Judge) Charles Kocoras in Ho-Chunk Nation v.
J.C. Penney Co., No. 98 C 3924, 1999 WL 495899, at *4-*6 (N.D.
Ill. July 2). Those claims for contribution, as asserted in both
the Cross-Claim and the Third-Party Complaint, are therefore
dismissed.

As for Bear Tracks' claims seeking indemnity under the Acts
(again in Count III), they are equally empty of merit. Bear
Tracks attempts to wrap itself in the mantle of the Acts’
protection on the basis that it is itself an Indian arts and
crafts organization, but that effort ignores the fact that even
such organizations can violate the Acts by infringing on the
statutory rights of other such organizations-- and that is
precisely the predicate of Native American Arts' claim against
Bear Tracks. As to that alleged misconduct, Bear Tracks--as an
asserted violator of the Acts--is by definition not a member of
the class for whose benefit Congress passed the Acts (see
Northwest Airlines, Inc. v. Transp. Workers Union of Am., AFL-
CIO, 451 U.S. 77, 91-92 (1981) and Texas Indus., Inc. v. Radcliff
Materials, Inc., 451 U.S. 630, 639 (1981)). And that being so,

the same type of analysis that has defeated its efforts to obtain