Chrysler v. FLA. DEPT. OF HIGHWAY SAFETY

720 So. 2d 563, 1998 WL 658274
CourtDistrict Court of Appeal of Florida
DecidedSeptember 28, 1998
Docket97-3421
StatusPublished
Cited by3 cases

This text of 720 So. 2d 563 (Chrysler v. FLA. DEPT. OF HIGHWAY SAFETY) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chrysler v. FLA. DEPT. OF HIGHWAY SAFETY, 720 So. 2d 563, 1998 WL 658274 (Fla. Ct. App. 1998).

Opinion

720 So.2d 563 (1998)

CHRYSLER CORPORATION, Appellant,
v.
FLORIDA DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES, Appellee.

No. 97-3421.

District Court of Appeal of Florida, First District.

September 28, 1998.
Rehearing Denied November 19, 1998.

*564 Dean Bunch, of Sutherland, Asbill & Brennan, L.L.P., Tallahassee; Allan M. Huss, of Chrysler Corporation, Auburn Hills, Michigan; Erika Z. Jones & John J. Sullivan, of Mayer, Brown & Platt, Washington, D.C., for Appellant.

Robert A. Butterworth, Attorney General; Amelia L. Beisner, Assistant Attorney General, Tallahassee, for Appellee.

Thomas H. Yardley, Cocoa, for Intervenor Massey Yardley Chrysler Plymouth, Inc., d/b/a Massey Yardley Chrysler Plymouth Jeep Eagle.

Kenneth L. Paretti, of Adams & Quinton, P.A., Miami, for Intervenors Tamiami Auto Group, Inc., d/b/a Tamiami Chrysler Plymouth Jeep Eagle; Potamkin Chrysler Plymouth, Inc., d/b/a Potamkin Chrysler Plymouth Jeep Eagle; Hollywood Chrysler Plymouth, Inc., d/b/a Hollywood Chrysler Plymouth Jeep Eagle; Potamkin Chevrolet, Inc., d/b/a Potamkin Dodge; Dade Jeep Eagle Chrysler Plymouth, Inc., d/b/a Dade Chrysler Plymouth and d/b/a/ Dade Jeep Eagle; and Colonial Pontiac, Inc., d/b/a Colonial Jeep Eagle Chrysler Plymouth.

Cynthia S. Tunnicliff, of Pennington, Moore, Wilkinson, Bell & Dunbar, Tallahassee, Amicus Curiae for Florida Automobile Dealers Association.

Wade L. Hopping, of Hopping Green Sams & Smith, P.A., Tallahassee, and Michael K. Brown, of Law Office of Michael K. Brown, Westport, Connecticut, Amici Curiae for American Automobile Manufacturers Association and Association of International Automobile Manufacturers, Inc.

SHIVERS, DOUGLASS B., Senior Judge.

Chrysler Corporation (Chrysler) appeals a final judgment dismissing, with prejudice, its complaint for injunctive and declaratory relief. We affirm in part, reverse in part, and remand the cause for further proceedings in the trial court relating to Chrysler's challenge to the facial constitutionality of section 320.641(3), Florida Statutes (1995). Key Haven Associated Enterprises, Inc. v. Board of Trustees of the Internal Improvement Trust Fund, 427 So.2d 153, 157 (Fla.1982).

*565 Chrysler is a motor vehicle manufacturer with its principal place of business in Michigan. The corporation sells motor vehicles worldwide through an extensive network of motor vehicle distributors and dealers in the United States and abroad. Chrysler is licensed by the appellee, Florida Department of Highway Safety and Motor Vehicles (Department), to distribute motor vehicles to franchised dealers for resale in the State of Florida. Among the Department's administrative duties under chapter 320, Florida Statutes (1995), is the regulation of the franchise agreements between Florida dealers and motor vehicle manufacturers, including Chrysler.

For many years, Chrysler has had a corporate policy of discouraging domestic dealers' unauthorized exports of Chrysler motor vehicles manufactured for sale in the United States. Chrysler contends that in contravention of this policy, some Chrysler dealers (including the Florida dealers who initiated the original administrative proceedings in this case) have sold, for international export, Chrysler motor vehicles that were manufactured and intended for sale in the United States only. As a consequence, and over Chrysler's objection, a substantial international "gray market" has developed. The instant record is replete with examples of the adverse financial and public relations consequences that have attended the sale of United States-only motor vehicles in other countries that have different driving conditions and varying laws and regulatory requirements relating to safety features, emissions performance, technical standards, and legal certification. Because of the operation of the international gray market, Chrysler was unable to ensure that its motor vehicles shipped abroad by United States dealers complied with all of the requirements of the nations to which they were exported. International gray market sales tainted Chrysler's relations with its foreign distributors and dealers as well as with its retail customers in other countries. Unable to track the ownership of such vehicles, Chrysler could not conduct effective recall campaigns when the need arose. Some foreign customers could not receive warranty service because most motor vehicles sold to United States dealers do not have warranty coverage when they are registered outside the United States or Canada.

To address these serious problems, Chrysler announced to all of its United States motor vehicle dealers in May 1996 the adoption of a proposed amendment to the standard (direct dealer or sales and service) franchise agreement that the corporation has with each of its dealers. The amendment makes explicit the prohibition of United States dealers' exporting new Chrysler motor vehicles that were manufactured for the domestic market only. According to the amended provision, Chrysler's direct dealers

shall have the non-exclusive right, subject to the provisions of this Agreement, to purchase from CHRYSLER new ... vehicles that are manufactured for sale within the United States for resale to customers located within the United States (or to other authorized ... dealers located within the United States) and vehicle parts, accessories, and other CHRYSLER products for resale at DIRECT DEALER'S facilities and location....DIRECT DEALER is free to sell [Chrysler] vehicles to customers located within the United States wherever they may be located within the United States, and vehicle parts and accessories to customers wherever they may be located....DIRECT DEALER must not sell new motor vehicles for resale, registration or principal use outside the United States. DIRECT DEALER also must not sell any new motor vehicles that were not originally manufactured for sale and distribution within the United States.

In July 1996, Chrysler officially notified its Florida dealers of the proposed modification of the standard franchise agreement, which was expected to become effective in Florida 90 days after issuance of the notice.

The statute governing notice requirements regarding proposed modifications of franchise agreements between motor vehicle manufacturers ("licensees") and dealers states in pertinent part:

320.641 Unfair cancellation of franchise agreements.—
(1)(a) An applicant or licensee shall give written notice to the motor vehicle dealer *566 and the department of the licensee's intention to discontinue, cancel, or fail to renew a franchise agreement or of the licensee's intention to modify a franchise or replace a franchise with a succeeding franchise, which modification or replacement will adversely alter the rights or obligations of a motor vehicle dealer under an existing franchise agreement or will substantially impair the sales, service obligations, or investment of the motor vehicle dealer, at least 90 days before the effective date thereof, together with the specific grounds for such action.

§ 320.641(1)(a), Fla. Stat. (1995).

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720 So. 2d 563, 1998 WL 658274, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chrysler-v-fla-dept-of-highway-safety-fladistctapp-1998.