The United States Supreme Court placed the final nail in the coffin of the Alliance of Motor Vehicle Manufacturers when the Court issued its March 7, 2016, Order denying the Alliance’s appeal from the Federal trial court’s dismissal of its lawsuit challenging the validity of Connecticut’s motor vehicle franchise laws. BSM partners, Richard Sox and Jason Allen, represented the Connecticut Automotive Retailers Association (“CARA”) who intervened in the case to oppose the Alliance’s attack on Connecticut’s warranty reimbursement provisions.
The Alliance challenged the Connecticut law based upon a claim that it violated the U.S. Constitution’s Commerce, Contracts and Due Process clauses. CARA was successful in obtaining an order by the Federal trial court dismissing the Alliance’s claim as failing to state valid claims. CARA was then successful in obtaining an order from the U.S. Second Circuit Court of Appeals which concurred with the trial court’s dismissal and, ultimately, a rejection of any further right of appeal by the U.S. Supreme Court.
The rulings in the Connecticut case are critically important to motor vehicle dealers in all states as they will prevent the Alliance from attacking both warranty reimbursement and other important franchise protections in any state based upon arguments that they violate the U.S. Constitution.
BSM Retained to Protest Another Nissan Dealership Termination
BSM has recently been retained by a Nissan dealer in New York to challenge a proposed termination of the franchise.
Like with a number of other dealers, Nissan North America claims that our client has failed to meet its sales performance obligations. NNA is blindly utilizing its State Sales Effectiveness Represented formula which measures a dealer’s market share against state average market share.
BSM lawyers intend to show that the SSER formula fails to take into account unique market conditions including same-brand and other-brand competition, customer demographics and shopping patterns. Likewise, we will demonstrate that NNA’s Growth 10 incentive program places certain dealers at a competitive disadvantage in pricing new vehicles by setting unreasonable objectives.
FIAT CHRYSLER WITHDRAWS JEEP ADD POINT NOTICE
FCA has withdrawn a Jeep add point notice after BSM represented four existing Jeep dealers in a protest against the proposed new dealership. FCA withdrew the notice after discovery in the case revealed that, due to environmental regulations, the proposed location did not meet FCA’s own minimum facility standards for the dealership.
We believe that FCA and the proposed new dealer for the Jeep location got cold feet when considering the cost that would be involved with continuing the litigation with a probable adverse result at the final hearing.
Dealers should strongly consider utilizing the add point protest rights provided under their state law to force the manufacturer to demonstrate the viability and reasonableness of the proposed new dealership. BSM often times finds that the manufacturer and proposed new dealer will withdraw the add point notice or settle the add point dispute when they realize an existing dealer(s) intends to fight the proposal.