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

CourtIllinois Supreme Court
DecidedJanuary 8, 2007
Docket101585 & 101601 cons. Rel
StatusPublished

This text of General Motors Corporation v. State of Illinois Motor Vehicle Review Board (General Motors Corporation 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 Corporation v. State of Illinois Motor Vehicle Review Board, (Ill. 2007).

Opinion

Docket Nos. 101585, 101601 cons.

IN THE SUPREME COURT OF THE STATE OF ILLINOIS

GENERAL MOTORS CORPORATION et al., Appellants, v. THE STATE OF ILLINOIS MOTOR VEHICLE REVIEW BOARD et al., Appellees.

Opinion filed January 8, 2007.

CHIEF JUSTICE THOMAS delivered the judgment of the court, with opinion. 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

-2- (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 Thirty-two states currently have motor vehicle franchise statutes that allow existing dealerships of the same line make within a specified distance of a proposed new dealership to file a protest to resolve whether a new dealer may be added, and thirty of those states have a “good cause” standard.

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General Motors Corporation v. State of Illinois Motor Vehicle Review Board, Counsel Stack Legal Research, https://law.counselstack.com/opinion/general-motors-corporation-v-state-of-illinois-mot-ill-2007.