General Motors Corp. v. State of Illinois Motor Vehicle Review Board

862 N.E.2d 209, 224 Ill. 2d 1, 308 Ill. Dec. 611, 2007 Ill. LEXIS 1
CourtIllinois Supreme Court
DecidedJanuary 8, 2007
Docket101585, 101601 cons.
StatusPublished
Cited by93 cases

This text of 862 N.E.2d 209 (General Motors Corp. v. State of Illinois Motor Vehicle Review Board) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
General Motors Corp. v. State of Illinois Motor Vehicle Review Board, 862 N.E.2d 209, 224 Ill. 2d 1, 308 Ill. Dec. 611, 2007 Ill. LEXIS 1 (Ill. 2007).

Opinions

CHIEF JUSTICE THOMAS

Justices Freeman, Fitzgerald, Kilbride, Garman, and Burke concurred in the judgment and opinion.

Justice Karmeier dissented, with opinion.

OPINION

In this case, General Motors Corporation (GMC) sought to add two new automobile dealerships in the greater Chicago area: one on Chicago’s far west side at Jacobs Twin Buick (Jacobs) and the other in Glenview, Illinois, at Loren Pontiac-Buick (Loren). Various existing GMC dealerships challenged the newly proposed dealerships by filing a protest with the State of Illinois Motor Vehicle Review Board (Board) pursuant to the Motor Vehicle Franchise Act (Franchise Act or Act) (815 ILCS 710/1 et seq. (West 2004)), which allows an existing dealer to file a protest when a manufacturer attempts to locate a new franchise within an existing dealer’s relevant market area. It is undisputed that the proposed sites for the additional franchises (add points) were within the protesting dealers’ relevant market area. The Board granted the protests, and the circuit court of Sangamon County confirmed that decision. GMC and Loren appealed, arguing that the Board failed to apply the Act’s “good cause” standard in reaching its decision to grant the protests. GMC and Loren also argued that the Act is unconstitutional and that the Board’s decision was against the manifest weight of the evidence. The appellate court rejected GMC’s and Loren’s arguments, with one justice dissenting. 361 Ill. App. 3d 271. We allowed the petitions for leave to appeal filed by GMC and Loren and have consolidated the cases. 210 Ill. 2d R. 315. We also allowed various organizations to file amicus curiae briefs on behalf of the respective parties. Loren has adopted the briefs of GMC before this court.

BACKGROUND

Illinois’ Motor Vehicle Franchise Act is comparable to legislation adopted by a number of states designed to protect existing dealers and consumers from the negative impact of aggressive franchising practices by automobile manufacturers whose desires to establish excessive competing franchises are considered to be a potential threat to the public welfare. See Fireside Nissan, Inc. v. Fanning, 30 F.3d 206, 211 (1st Cir. 1994); 2 Franchise & Distribution L. & Prac. §14:31 (1990). Most of the states having such legislation allow existing dealers of the same line make that are within a specified distance of a proposed new dealership to protest. These statutes generally provide that no new franchise may be established unless the trier of fact, usually a motor vehicle review board, decides that the appointment is for “good cause,” which requires the assessment of a number of statutory factors to make that determination. See, e.g., Ark. Code Ann. §23 — 112—311 (West 2004); Cal. Vehicle Code §3062 (Deering Supp. 2006); Conn. Gen. Stat. Ann. §42 — 133dd (West Supp. 2006); Mass. Gen. Laws Ann. 93B §6 (West 2005).1

Our Franchise Act requires a manufacturer wishing to grant an additional franchise in the relevant market area of an existing franchise of the same line make to give 60 days written notice to each existing dealer of the same line make whose relevant market area includes the proposed location. 815 ILCS 710/4(e)(8) (West 2004). The “[r]elevant [m]arket [a]rea” for purposes of this case is defined by statute as “the area within a radius of 10 miles from the principal location of a franchise or dealership.” 815 ILCS 710/2(q) (West 2004). An existing franchise has 30 days from the receipt of the notice from the manufacturer to file a protest with the Board. 815 ILCS 710/4(e)(8) (West 2004). If a protest is filed, the manufacturer has the burden of proof to establish that “good cause” exists to allow the grant or establishment of the additional franchise. 815 ILCS 710/4(e)(8) (West 2004).

Section 4(e)(8) of the Act provides that the determination of whether “good cause” exists for allowing an additional franchise “shall be made by the Board under subsection (c) of Section 12 of this Act.” 815 ILCS 710/ 4(e)(8), 12(c) (West 2004). Section 12(c) provides that, in considering whether “good cause” has been established for granting a proposed additional franchise, the Board shall consider “all relevant circumstances” in accordance with subsection (v) of section 2 of this Act, including but not limited to, 11 statutory factors set forth in section 12(c) (815 ILCS 710/12(c) (West 2004)). Section 2(v) of the Act is part of the definitions section of the statute and provides that “ ‘[g]ood cause’ means facts establishing commercial reasonableness in lawful or privileged competition and business practices as defined at common law.” 815 ILCS 710/2(v) (West 2004). The “relevant circumstances” that the Board is required to consider are listed in section 12(c) as follows:

“(1) whether the establishment of such additional franchise or the relocation of such motor vehicle dealership is warranted by economic and marketing conditions including anticipated future changes;
(2) the retail sales and service business transacted by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership during the 5 year period immediately preceding such notice as compared to the business available to them;
(3) the investment necessarily made and obligations incurred by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership to perform their obligations under existing franchises or selling agreements; and, the manufacturer shall give reasonable credit for sales of factory repurchase vehicles purchased by the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with the place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership, or the additional motor vehicle dealership or other facility limited to the sale of factory repurchase or late model vehicles, at manufacturer authorized or sponsored auctions in determining performance of obligations under existing franchises or selling agreements relating to total new vehicle sales;
(4) the permanency of the investment of the objecting motor vehicle dealer or dealers and other motor vehicle dealers of the same line make with a place of business in the relevant market area to be served by the additional franchise or the relocated motor vehicle dealership;

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Cite This Page — Counsel Stack

Bluebook (online)
862 N.E.2d 209, 224 Ill. 2d 1, 308 Ill. Dec. 611, 2007 Ill. LEXIS 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/general-motors-corp-v-state-of-illinois-motor-vehicle-review-board-ill-2007.