Litigation

By: Donald C. Turner

Was your dealership terminated by GM/Chrysler?

The United States Congress, as part of a $1.1 trillion spending bill, has voted to give terminated General Motors and Chrysler dealers the right to challenge their terminations through arbitration. This legislation requires the arbitrator to balance the economic interest of the covered dealership against the economic interest of the manufacturer and the public at large and, on the basis of this balancing, to determine whether the dealership should remain open. Among other things, the arbitrator is to consider the dealer’s profitability over the period 2006 through 2009, the manufacturer’s overall business plan, the dealership’s current economic viability, its satisfaction of the manufacturer’s performance objectives, the length of experience of the covered dealership, and the demographic and geographic characteristics of the dealership’s market territory. Dealers electing to arbitrate must make a decision to do so within 40 days of the effective date of the Act. The Act became effective on December 16, 2009 and therefore the election to arbitrate must be made no later than January 22, 2010 (The 40-day period ends on Sunday, January 24, 2010 so to be safe, the arbitration should be requested no later than Friday, January 22, 2010). As a result, the dealer should, at this time, commence compilation of the evidence and documentation to support why it should be allowed to continue operations.

This arbitration is to be conducted by arbitrators with the American Arbitration Association and will be conducted in a quasi-judicial proceeding. As a result, careful planning and competent counsel (with automotive and arbitration experience) will be critical to success in these arbitrations, please contact if you are an affected dealer, Don Turner to discuss your options.

Also, see an earlier post on the car dealer arbitration process.

Stephen P. Lagoy

By: Stephen P. Lagoy

Congress has approved a plan that would allow 2000 terminated car dealers to pursue third party mediation and arbitration with GM and Chrysler with the possibility of being reinstated. For an analysis of this alternative dispute resolution process and its chances of being successful, see http://online.wsj.com/article/.

For more information how mediation and arbitration can work for your business, please contact Stephen P. Lagoy.

Stephen P. Lagoy is an attorney practicing in West Chester, PA. He is a member of the Association for Conflict Resolution and the PA Council of Mediators.