§ 4096. Unlawful acts by manufacturers or distributors
It shall be a violation of this chapter for any manufacturer, as defined under this
chapter, to require, attempt to require, coerce, or attempt to coerce any new motor
vehicle dealer in this State:
(1) To order or accept delivery of any new motor vehicle, part or accessory thereof, equipment,
or any other commodity not required by law or a recall campaign that shall not have
been voluntarily ordered by the new motor vehicle dealer, except that this subdivision
is not intended to modify or supersede any terms or provisions of the franchise requiring
new motor vehicle dealers to market a representative line of those motor vehicles
that the manufacturer or distributor is publicly advertising.
(2) To order or accept delivery of any new motor vehicle with special features, accessories,
or equipment not included in the list price of such motor vehicles as publicly advertised
by the manufacturer or distributor.
(3) To participate monetarily in an advertising campaign or contest, or to purchase any
promotional materials, training materials, showroom, or other display decorations
or materials at the expense of the new motor vehicle dealer, or to require any dealer
without his or her prior written agreement to participate in any manufacturer’s rebate
program or to require a dealer to contribute to a manufacturer’s warranty rebate program,
either by discount or otherwise without prior notification and prior written consent
of the dealer.
(4) To enter into any agreement with the manufacturer or to do any other act prejudicial
to the new motor vehicle dealer by threatening to terminate or cancel a franchise
or any contractual agreement existing between the dealer and the manufacturer; except
that this subdivision is not intended to preclude the manufacturer or distributor
from insisting on compliance with the reasonable terms or provisions of the franchise
or other contractual agreement, and notice in good faith to any new motor vehicle
dealer of the new motor vehicle dealer’s violation of such terms or provisions shall
not constitute a violation of the chapter.
(5) To change the capital structure of the new motor vehicle dealer or the means by or
through which the new motor vehicle dealer finances the operation of the dealership,
provided that the new motor vehicle dealer at all times meets any reasonable capital
standards determined by the manufacturer in accordance with uniformly applied criteria;
and also provided that no change in the capital structure shall cause a change in
the principal management or have the effect of a sale of the franchise without the
consent of the manufacturer or distributor; said consent shall not be unreasonably
withheld.
(6) To refrain from participation in the management of, investment in, or the acquisition
of any other line-make of new motor vehicle or related products; provided, however,
that this subdivision does not apply unless the new motor vehicle dealer maintains
a reasonable line of credit for each make or line-make of new motor vehicle, the new
motor vehicle dealer remains in compliance with any reasonable facilities requirements
of the manufacturer, and no change is made in the principal management of the new
motor vehicle dealer. For purposes of this chapter, “reasonable facilities requirements”
shall not include a requirement that a new motor vehicle dealer establish or maintain
exclusive facilities, personnel, or display space.
(A) The new motor vehicle dealer shall provide written notice to the manufacturer and
the Board no less than 90 days prior to the dealer’s intent to participate in the
management of, investment in, or acquisition of another line-make of new motor vehicles
or related products.
(B) Within 45 days of receipt of the notice from the dealer, the manufacturer may file
with the Board a protest alleging specific facts to support its claim that the new
motor vehicle dealer cannot maintain a reasonable line of credit for each make or
line-make of new motor vehicle, the new motor vehicle dealer cannot remain in compliance
with any reasonable facilities requirements of the manufacturer, or that a change
is being made in the principal management of the new motor vehicle dealer. The manufacturer
shall also serve the protest on the new motor vehicle dealer within the 45-day period.
If the manufacturer does not file a protest with the Board within 45 days, then the
dealer may participate in the management of, investment in, or acquisition of another
line-make of new motor vehicles or related products as set forth in its written notice
of intent.
(C) Within 45 days of the receipt of a protest from a manufacturer, the Board shall meet,
hear, and take evidence limited to the claims set forth in the manufacturer’s protest
and make a determination on each of the manufacturer’s claims. The burden of proof
shall be on the manufacturer. The decision of the Board shall be final and no appeal
may be taken.
(7) To assent to a release, assignment, novation, waiver, or estoppel that would relieve
any person from liability to be imposed by this law or to require any controversy
between a new motor vehicle dealer and a manufacturer, distributor, or representative
to be referred to any person other than the duly constituted courts of the State or
the United States of America, if such referral would be binding upon the new motor
vehicle dealer.
(8) To change the location of the dealership or to make any substantial alterations to
the dealership premises or facilities when to do so would be unreasonable.
(9) To change the location of the dealership or to make any substantial alterations to
the dealership premises or facilities in the absence of written assurance from the
manufacturer or distributor of a sufficient supply of new motor vehicles to justify
the change in location or the alterations. (Added 1981, No. 157 (Adj. Sess.), § 1, eff. April 14, 1982; amended 1989, No. 84, § 1; 2009, No. 57, § 1, eff. June 1, 2009.)