You Auto Know! Relocation Protest Scenario

A manufacturer provides you with a conditional relocation approval letter to relocate your dealership.  The move does not fall within any of the exceptions under Ohio law and you must clear the market.  Your same line competitor receives the mandatory correspondence from the manufacturer regarding the relocation approval and files a protest pursuant to Ohio law.  The litigation process begins and the manufacturer refuses to participate in the relocation litigation.  What are your options?

 

Suppose they gave a relocation protest hearing and no one participated?  Recently, this author was involved in a relocation protest, representing the protesting dealer, where the manufacturer refused to participate and defend its decision to approve the relocation.  The manufacturer sent correspondence to the relocating dealer that the dealer was responsible to “clear the market.”  Although I will not go into details regarding the dealer’s attempt to “clear the market,” suffice it to say that the dealer was not successful regarding same.  We proceeded with discovery sending the manufacturer numerous requests which the manufacturer did not respond to.  Further, the relocating dealer filed a motion to participate as a “interested party.”  This author, in prior litigation, established the scope of participation that an “interested party” could be involved in a protest.  Quite frankly, the interested party could not take depositions, could not be involved in discovery but could only provide testimony at the protest hearing.  The interested party could not cross examine witnesses.  In essence, it was our position that the interested party could only provide testimony and evidence to support the evidence produced by the manufacturer. 

 

Obviously, we proceeded with the necessary filings of motions for summary judgment and sanctions for failure to respond to discovery.  The hearing officer believed that he had to hold a hearing in order that the “interested party” be able to have its day in court.  It must be noted, that the only party who has the burden of proof of good cause to relocate is the manufacturer.  An “interested party” cannot carry the burden of proof regarding same.  We attended the hearing and the “interested party’s” dealer provided some brief testimony but no evidence.  In order to preserve the record in case of an appeal, we cross-examined the “interested party” dealer and had our protesting dealer provide testimony indicating there were no exceptions to the relocation and that there was not good cause for the relocation.  Ultimately, we received a verdict in favor of the protesting dealer. 

 

We believe that this was a case of first impression.  However, it is interesting that the relocation letter sent by the manufacturer was a “conditional letter” indicating that the relocating dealer was ultimately responsible for clearing the market.  However, the conditional letter did not state anything regarding the manufacturer’s responsibility if the relocating dealer’s efforts had failed.  Obviously, if you were the dealer requesting relocation and the manufacturer refused to defend its decision to permit relocation, you would, understandably, be furious. 

 

Therefore, be apprised that even though you may receive an approval for relocation, please read the letter carefully regarding your obligations to “clear the market” and the manufacturer’s responsibility if you cannot do so.  

 

CONTACT INFORMATION

Robert A. Poklar, Esq.
Weston Hurd LLP
The Tower at Erieview
 1301 East 9th Street, Suite 1900
Cleveland, Ohio 44114-1862

p: 216.687.3243; f: 216.621.8369

rpoklar@westonhurd.com

www.westonhurd.com