You Auto Know! - Termination Arbitrations Revisited

Earlier this week, a Federal court in Michigan decided in favor of Chrysler and those dealers’ protesting the reopening of terminated stores. The Court ruled that Section 747 of the Consolidated Appropriations Act of 2010, Pub. L. No. 111‐117, the federal statute enacted to give terminated dealers the right to be added to a dealer network through arbitration, does not preempt state laws, such as Ohio’s Dealer Act (also referred to as O.R.C. §4517.01, et seq.) and does not provide for reinstatement. Rather, the “sole and exclusive remedy” for a terminated dealer who prevailed in arbitration is a customary and usual letter of intent (“LOI”) to enter into a sales and service agreement. The effect of this ruling will significantly weaken the positions of those terminated dealers who have already prevailed in Section 747 arbitrations with Chrysler Group LLC (“New Chrysler”). The decision, Chrysler Group LLC v. Sowell Automotive, Inc., et al. Case No. 10‐12984. . . YAK – March 2012 – Termination Arbitrations Revisited