Baker Hostetler provides experienced representation to motor vehicle, marine and equipment manufacturers and distributors of all sizes and stages of development that seek assistance in addressing their dealer network issues and related concerns. Baker Hostetler lawyers work with these clients to satisfy both litigation and transactional matters. We counsel clients regarding the drafting and implementation of sales and service agreements, policies, licensing and distribution issues—seeking to avoid disputes by anticipating and neutralizing issues before they surface. In those situations where disputes cannot be avoided and early resolution is not possible, we provide aggressive representation before state and federal courts, state boards and commissions, and arbitration panels across the United States.
Our skill and experience in market representation issues allows Baker Hostetler to represent manufacturers and distributors not just in those states where we have offices, but also on a regional or national basis. Baker Hostetler Distribution and Franchise Team lawyers have represented these clients for decades in jurisdictions throughout the country. This representation is provided by seasoned lawyers and their teams who serve not only as effective litigators, but also as trusted counselors and advisors. We understand our clients' businesses and are uniquely positioned to help find practical, cost-effective solutions to the myriad of issues existing now and which will exist in the future.
Representing Clients with Various Product Types
Our attorneys work with clients that manufacture and distribute a full spectrum of vehicles, including automobiles, motorcycles, trucks (light, medium and heavy-duty), all-terrain vehicles (ATVs), ambulances, buses, scooters, recreational vehicles (RVs) and trailers. However, Baker Hostetler's experience doesn't end with road and off-road vehicles, as our attorneys also regularly represent marine companies, including boat and personal watercraft (PWC) manufacturers and distributors, along with equipment manufacturers in the construction, road development, mining and agricultural sectors.
Transactional Matters
Baker Hostetler lawyers often provide advice as part of our clients' business transactions. For example, we have drafted and helped implement dealer sales and service agreements, framework agreements, rights of first consideration, dealer policies, promotional agreements, and off-site service provider agreements. In addition, we have negotiated and drafted termination agreements and have analyzed post-termination obligations, as well as any number of complex settlement agreements.
Litigation Experience
Baker Hostetler has handled virtually all types of market representation litigation, initiated either by our client or by the dealer. These matters include dealer terminations (based on performance, warranty fraud, breach of contract, etc.), relocations, add points, transfers, federal Dealer Day in Court Act, warranty audits, discrimination, fraudulent inducement, antitrust claims, breach of contract, allocation, class actions, counterfeit parts, warranty reimbursement, dualing, incentive programs, indemnification, minority dealer programs, Internet sales, out-of-trust situations, parts returns, post-termination obligations, rights of first refusal, changes in territory, franchise modifications, enforcement of settlement agreements, trademark issues, state motor vehicle franchising laws and general tort law.
Government Relations
Baker Hostetler has also represented clients before state legislatures for purposes of encouraging the passage of manufacturer-friendly legislation, as well as discouraging potentially harmful legislation. In addition, our lawyers have established relationships with various state regulators and agencies.
Jurisdictions
Baker Hostetler attorneys have handled complex dealer issues in every state and have appeared in many different state and federal courts, including courts in California, Georgia, Illinois, Iowa, Louisiana, Michigan, Montana, North Carolina, Ohio, Pennsylvania, Nebraska, Nevada, South Dakota, Texas, Utah and Wisconsin.
We also have appeared before boards and commissions (some of which are now defunct) in the following states: California, Iowa, Illinois, Kansas, Louisiana, Montana, Ohio, Nebraska, Texas, Utah and Wisconsin. Significantly, we have also represented several of our clients in multiple jurisdictions.
Leadership in Action
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| Manufacturer Representation: Help implement an updated Dealer Sales and Service Agreement nationwide |
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| Client: Manufacturer/distributor of Japanese automobiles in the U.S. |
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| Type of Matter: Transactional and potential litigation |
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| Our Client's Challenge: U.S. manufacturer/distributor had not updated its Dealer Sales and Service Agreement for nearly 20 years and wanted to implement several changes to assist both it and its dealers. |
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| The Goal: Navigate the minefield of each state's regulatory and potential litigation issues, diffusing hundreds of potential disputes. |
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| Our Strategy: Obtain dealer input, both from a dealer committee and from a representative of the National Automobile Dealers Association (NADA) to reach a mutually acceptable final form of the Dealer Agreement. Convince the dealer body that the updated Dealer Agreement is in the best interests of both dealers and the manufacturer/distributor. Study each state's laws for the optimal timing and presentation of the updated Dealer Agreement. |
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| Results: More than 90 percent of the manufacturer/distributor's dealers nationwide have executed the updated Dealer Agreement without legal challenge, and the client is very pleased with results. Similar strategy had been followed with another client in the same industry, with even more favorable results. |
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Distribution and Franchise Practice Experience
- Won a performance based termination protest before the California New Motor Vehicle Board, based principally on sales and customer satisfaction deficiencies. This recent victory for a manufacturer runs contrary to many prior decisions of the Board that have rejected prior termination attempts, even given overwhelming evidence of material failures of performance.
- Argued against the retroactive application of the Ohio dealer statutes to franchise agreements that predate the enactment of the statute, thereby enabling the termination of a dealership “at will.” This case resulted in a published decision of the Sixth Circuit Court of Appeals, Bob Tatone Ford, Inc. v. Ford Motor Company, 197 F.3d 787 (6th Cir. 1999).
- Represented a client who litigated issues of first impression concerning the jurisdiction of a state dealer board over buy/sell disputes and was successful in limiting the reach of that body. This case resulted in a published decision of the California Third District Court of Appeal, Mazda Motor of America, Inc. v. California New Motor Vehicle Board (David J. Phillips Mazda), 110 Cal. App. 4th 1451 (2003).
- Represented a client before an appellate court deciding the proper standard of appeal in a successful termination of a dealer who had breached a dealer agreement. This case resulted in a published decision of the California Fourth District Court of Appeal, Kawasaki Motors Corp., U.S.A. v. Superior Court (Saba), 84 Cal. App. 4th 200 (2000).
- Established the existence of “good cause” to relocate an existing dealership over claims of lost profits to the protesting dealership and claims of bad faith against the manufacturer.
- Negotiated the voluntary closure of many dealerships threatened with termination. These agreements have included outright closures and the establishment of cure periods with performance requirements and waiver of protest rights, if performance criteria were not met. This waiver has been upheld under the applicable franchise statutes.
- Obtained a damage award against a dealership for the injury to the client's market share resulting from the dealership's poor performance.
- Assisted a client in forcing a dealership to “de-dual” its facility after the unauthorized introduction of another brand.
- Defended manufacturers' decisions to turn down buy/sell agreements in which the purchasers were, among others, a publicly held company and the relative of the current dealer principal.
- Represented a client who litigated issues concerning the jurisdiction of a state dealer board and was successful in limiting the reach of that body.
- Represented manufacturers involved with the transition in ownership upon the bankruptcy of a dealership, successfully convincing bankruptcy courts of the substantial interest of the manufacturer in approving successor owners.