Practice Areas & Industries: Baker & Hostetler LLP

Practice/Industry Group Overview

Baker Hostetler provides experienced representation to motor vehicle and equipment manufacturers of all sizes and levels of sophistication seeking assistance in addressing their dealership concerns. Baker Hostetler lawyers work with manufacturers to satisfy transactional concerns and counsel clients regarding dealer agreements, policies and impending disputes. In those situations where early resolution is not possible, we provide aggressive litigation before courts, administrative agencies and arbitration panels across the United States.

Our skill and experience in manufacturer issues allows Baker Hostetler to represent manufacturers not just in those states where we have offices, but also on a regional or national basis.

Baker Hostetler Manufacturer Team lawyers have represented manufacturers for decades in jurisdictions across the United States. This representation is provided by seasoned lawyers and their teams who know how to effectively and efficiently obtain the result expected by our clients.

Our lawyers have served not only as litigators, but as trusted counselors and advisors. We understand our clients' business and are uniquely positioned to find practical, cost-effective solutions to dealership issues.

Services Available

Litigation Experience

Baker Hostetler has handled virtually all types of dealer disputes, initiated either by the manufacturer 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, fraud, 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.

Transactional Matters

Baker Hostetler serves as a trusted participant in clients' business transactions as well. In this regard, for example, we have drafted dealer sales and service agreements, framework agreements, dealer policies, promotional agreements, and off-site facilities agreements. In addition, we have negotiated and drafted termination agreements and post-termination repurchase obligations, as well as any number of complex settlement agreements.

Government Relations

Baker Hostetler has also engaged in representing our clients before state legislatures for purposes of encouraging the passage of manufacturer-friendly legislation, as well as discouraging potentially harmful legislation.

Jurisdictions

Over the course of our representation for manufacturers in dealer matters, 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, Ohio, Pennsylvania, Nebraska, Nevada, Texas, Utah, and Wisconsin.

We also have experience and have made appearances in the following states which either had or still have dealer boards: California, Iowa, Illinois, Kansas, Louisiana, Montana, Ohio, Nebraska, Texas, Utah and Wisconsin. As important, we represent several of our clients in multiple jurisdictions.

Leadership in Action

Manufacturer Representation: Help implement an updated Dealer Sales and Service Agreement nationwide

Client: Manufacturer/distributor of Japanese automobiles in the U.S.

Type of Matter: Transactional and potential litigation

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.

The Goal: Navigate the minefield of each state's regulatory and potential litigation issues.

Our Strategy: Obtain dealer input, both from a dealer committee and from a representative of the National Automobile Dealers Association 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.

Results: Nearly 90% of the manufacturer/distributor's dealers nationwide have executed the updated Dealer Agreement without legal challenge, with smooth implementation expected to continue.

Representative Industry 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.
• Won performance-based termination protests in many different jurisdictions and, in one case, 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.
• Lobbied a state legislature to establish the ability of manufacturers of certain classes of trucks to engage in the sale of used trucks, and, for manufacturers in another state, lobbied successfully for the rejection of legislation that would have increased the jurisdiction of the dealer board.

About Baker Hostetler

Baker Hostetler lawyers help clients establish, maintain and protect market-leading positions across the United States and around the world. We offer clients the strength of 600+ lawyers in a full range of practices, a unique geographic platform including both the coasts and the center of the country, a deep knowledge of industry issues and a 90-year track record of excellence and achievement.

For more information about our Automotive industry focus, contact:

National Co-Leaders
Billy M. Donley
713.646.1382
bdonley@bakerlaw.com

Cincinnati
William Appleton
513.929.3403
wappleton@bakerlaw.com

Cleveland
Hewitt Shaw
216.861.7514
hshaw@bakerlaw.com

Columbus
George W. Hairston
614-462-2638
ghairston@bakerlaw.com

Costa Mesa
Maurice Sanchez
714.966.8809
msanchez@bakerlaw.com

Denver
Raymond Sutton
303.764.4103
rsutton@bakerlaw.com

Houston
Billy M. Donley
713.646.1382
bdonley@bakerlaw.com

Los Angeles
Cranston J. Williams
213.975.1835
cwilliams@bakerlaw.com

New York
Paul Eyre
212.589.4210
peyre@bakerlaw.com

Orlando
G. Thomas Ball
407.649.4004
tball@bakerlaw.com

Washington, DC
William Schweitzer
202.861.1531
wschweitzer@bakerlaw.com

Clients:
American Honda , Deere & Company , Ford Motor Company , Hitachi Construction Machinery , Hyundai Motor America , John Deere Construction & Forestry Company, Kawasaki Motors Corp., U.S.A. , Kia Motors America , Lotus Cars, U.S.A. , Lotus Cars, U.S.A. , Mazda North American Operations, Inc. , Nissan North America, Porsche Cars North America , Subaru of America , Volvo Trucks North America