WMW, Inc. v. American Honda Motor Co.

733 S.E.2d 269, 291 Ga. 683, 2012 Fulton County D. Rep. 3121, 2012 WL 4856991, 2012 Ga. LEXIS 777
CourtSupreme Court of Georgia
DecidedOctober 15, 2012
DocketS11G1828
StatusPublished
Cited by13 cases

This text of 733 S.E.2d 269 (WMW, Inc. v. American Honda Motor Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
WMW, Inc. v. American Honda Motor Co., 733 S.E.2d 269, 291 Ga. 683, 2012 Fulton County D. Rep. 3121, 2012 WL 4856991, 2012 Ga. LEXIS 777 (Ga. 2012).

Opinions

Nahmias, Justice.

We granted certiorari to decide whether, in WMW, Inc. v. American Honda Motor Co., 311 Ga.App. 1 (714 SE2d 689) (2011), the Court of Appeals correctly construed the standing requirement for a motor vehicle dealership to sue under OCGA § 10-1-664, the anti-encroachment provision of the Georgia Motor Vehicle Franchise Practices Act, Ga. L. 1993, pp. 1585-1647, which is codified as amended at OCGA §§ 10-1-620 to 10-1-670. Like other statutes, the Franchise Practices Act must be construed as an integrated whole. See U. S. Bank Nat. Assn. v. Gordon, 289 Ga. 12, 14-15 (709 SE2d 258) (2011). While the anti-encroachment provision could have been drafted more clearly, we believe that the Act as a whole, and particularly its definitions provision, OCGA § 10-1-622, elucidate the proper application of the anti-encroachment provision to the facts of this case. The “relevant market area” for a corporate motor vehicle dealership like appellant WMW, Inc. (“WMW’), whose status as a “dealership” and “dealer” under the Act is based solely on its sales of new motor vehicles, is calculated from the location where WMW sells (markets) new vehicles in Roswell, Georgia, not from where WMW only services vehicles in Alpharetta. Because the new dealership that appellees American Honda Motor Company, Inc. (Honda) and Sobh Automotive of Cumming, Inc. (Sobh) planned to establish in Cumming was beyond WMW’s relevant market area, WMW lacks standing to sue to block the new competitor under OCGA § 10-1-664. Thus, while we disagree with the rationale of the majority opinion below, it reached the right result, and we therefore affirm the Court of Appeals’ judgment. See Bunn v. State, 291 Ga. 183, 193 (728 SE2d 569) (2012) (affirming on certiorari under the right-for-any-reason doctrine).

1. Since 1976, WMW, which does business as Honda Carland, has operated a new motor vehicle dealership in Roswell under a franchise agreement with Honda. WMW sells and services vehicles at its Roswell location. Since 2000, WMW has also operated a service-only location in Alpharetta under an amendment to the franchise agreement. In 2010, Honda notified WMW that it planned to authorize Sobh to open a new Honda dealership in Cumming, which would be more than eight miles from WMW’s sales and service location in Roswell but within eight miles of WMW’s service-only location in Alpharetta. WMW sued Honda and Sobh under the anti-encroachment provision of the Franchise Practices Act, which authorizes an existing dealership to file suit to prevent its franchisor from establishing a new or relocated dealership within the existing dealership’s “relevant [684]*684market area.” OCGA § 10-1-664 (b). The Act defines “relevant market area” as “the area located within an eight-mile radius of an existing dealership.” OCGA § 10-1-622 (13.1). The trial court concluded that WMW lacked standing under the Act and dismissed the case.

WMW appealed, and the Court of Appeals affirmed by vote of five to two. The majority opinion rejected WMW’s argument that its service-only location in Alpharetta qualified for its own eight-mile relevant market area. See WMW, Inc., 311 Ga. App. at 4. The majority identified WMW’s “dealership” location for calculating its “relevant market area” by looking to the “ ‘general rule of law’ ” that, for venue purposes, “ ‘a domestic corporation resides where its principal office or place of business is situated,’ ” which for WMW was its Roswell location. Id. (citation omitted). The majority therefore affirmed the trial court’s ruling that WMW lacked standing to sue under the anti-encroachment provision. See id. at 5.

The dissent pointed out that corporations, unlike natural persons, can exist in more than one place at a time; contended that the Act protects multiple locations for an existing dealership where the dealer is an individual rather than a corporation; and saw nothing in the Act that suggested that the anti-encroachment provision was designed to provide less protection to corporate dealers than to individual dealers. See WMW, Inc., 311 Ga. App. at 5-6 (McFadden, J., dissenting). Thus, the dissent concluded that WMW’s relevant market area should be measured from every location where the corporation exists, including its service-only location in Alpharetta, which would give WMW standing to sue to try to block Honda and Sobh from establishing a competing franchise in Cumming, less than eight miles from WMW’s Alpharetta location. See id.

This Court granted certiorari.

2. Before considering the merits of the case, we must address a jurisdictional issue. See Scarbrough Group v. Worley, 290 Ga. 234, 236 (719 SE2d 430) (2011). After briefing and oral argument in this Court, Honda filed a motion to dismiss this case as moot, attaching a letter it sent to WMW about a month after oral argument. The letter says, “At this time, [Honda] no longer intends to appoint an authorized Honda dealer at the site” in Cumming that WMW has challenged. WMW and Sobh do not oppose Honda’s motion to dismiss, although WMW asks us to vacate the decisions of the Court of Appeals and trial court if we grant the motion, as is normally done when a case becomes moot by happenstance during an appeal. See, e.g., United States v. Munsingwear, Inc., 340 U. S. 36, 41 (71 SC 104, 95 LE 36) [685]*685(1950) (explaining that this is done “to prevent a judgment, unreviewable because of mootness, from spawning any legal consequences”).1 Here, however, the event purportedly making this appeal moot is not happenstance, but rather the voluntary and unilateral decision by Honda, a party that prevailed below, to stop, at least for the time being, its challenged effort to establish a new dealership in Cumming.

This is apparently a novel mootness issue for Georgia’s appellate courts, but it is an issue that long has been settled in the federal courts, using reasoning that makes good sense and that we now adopt. An appellee’s “voluntary cessation of challenged conduct does not ordinarily render a case moot because a dismissal for mootness would permit a resumption of the challenged conduct as soon as the case is dismissed.” Knox v. Svc. Employees Intl. Union, 576 U. S. _, _ (132 SC 2277, 2287, 183 LE2d 281) (2012) (citing City of Mesquite v. Aladdin’s Castle, Inc., 455 U. S. 283, 289 (102 SC 1070, 71 LE2d 152) (1982)).

A narrow exception to the voluntary cessation doctrine exists where the “subsequent events ma[ke] it absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.” United States v. Concentrated Phosphate Export Assn., 393 U. S. 199, 203 (89 SC 361, 21 LE2d 344) (1968).

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Bluebook (online)
733 S.E.2d 269, 291 Ga. 683, 2012 Fulton County D. Rep. 3121, 2012 WL 4856991, 2012 Ga. LEXIS 777, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wmw-inc-v-american-honda-motor-co-ga-2012.