Auto manufacturers file suit over ‘Auto Dealers Bill of Rights’
CONCORD — The battle between vehicle manufacturers and their franchise dealers has moved from the State House to the courthouse.
Last week, three equipment manufacturers filed suit seeking to block implementation of the “Auto Dealers Bill of Rights” passed by lawmakers this year.
The legislation changes business practices between manufacturers and their dealers, giving local auto and construction and farm equipment dealers more flexibility to run their franchises. All other states have similar laws.
Supporters say the bill will level the playing field for the dealers who have said they are often held hostage to the manufacturers’ demands.
But opponents believe the bill overturns existing business contracts and, rather than leveling the playing field, tilts it significantly in favor of the dealers. They also say it will drive up costs for consumers.
John Deere, AgCo and Case New Holland filed suit in Hillsborough North Superior Court seeking an injunction blocking the new law and asks for a ruling that the law is unconstitutional because it applies retroactively to existing contracts, something they say is forbidden under federal law.
But the NH Auto Dealers Association says it will fight any attempt to block implementation of the law and its greater protection for dealers.
“The legal claims being made by John Deere are the same arguments equipment manufacturers made at the Legislature, just before lawmakers overwhelmingly supported the new law,” said Pete McNamara, NHADA president.
“The claims are inaccurate, and we predict a judge will reject this request to throw out the law.”
During legislative hearings, the equipment manufacturers said extending the dealers protection act to their industry was unconstitutional because it interfered with business agreements.
In a letter to Gov. Maggie Hassan before she signed Senate Bill 126 this summer, Nixon Peabody LLC attorney Kevin Fitzgerald wrote on behalf of the Association of Equipment Manufacturers, “(Once) SB 126 takes effect, most if not all, existing agreements between equipment manufacturers and dealerships will be nullified or distorted beyond enforceability and equipment manufacturers will be exposed to criminal liability.”
He told the governor provisions of the bill violate the constitutional rights of businesses with existing contracts in the state and that will harm the state’s ability to attract new industry and business.
In the suit, equipment manufacturers claim their industry is different and should not be included in auto dealer provisions. They say the new law would require them to break current agreements with dealers.
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