Skip to main content
Sister Publication Links
  • Rubber News
  • European Rubber Journal
Subscribe
  • Login
  • Register
  • Subscribe
  • Current Issue
  • News
    • OPINION
    • BUSINESS/FINANCIAL
    • COMMERCIAL TIRE
    • GOVERNMENT & LAW
    • Humanitarian Award
    • RETAIL TIRES
    • SERVICE ZONE
    • TIRE MAKERS
    • Best Places to Work
    • RUSSIA WAR IN UKRAINE
  • Aligning with ADAS
  • Data
    • DATA STORE
  • Custom
    • SPONSORED CONTENT
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
  • Resources
    • DIRECTORY
    • CLASSIFIEDS
    • SHOP FLOOR
    • AWARDS
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Best Places to Work
  • ADVERTISE
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
January 21, 2015 01:00 AM

4 ex-Chrysler dealers could reopen under court ruling

Crain News Service
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    By Chad Halcom, Crain News Service

    DETROIT (Jan. 21, 2015) — One Las Vegas dealership and three former Detroit area dealerships — Livonia Chrysler Jeep Inc., Fox Hills Chrysler Jeep and Village Chrysler Jeep — could get a chance to reopen more than five years after a Chrysler Group L.L.C. decision to close them, according to a U.S. appeals court ruling.

    The 6th U.S. Circuit Court of Appeals last week found that a federal law creating the arbitration process where those dealers prevailed trumps state laws that would allow nearby competitors to legally challenge their return.

    At issue is a federal arbitration process in 2010 where auto dealers could challenge Chrysler's decision to terminate 789 dealers as part of bankruptcy reorganization, reducing its dealer count to about 2,400. Some 32 dealers, including five in Michigan, won reinstatement following arbitration hearings, but lawsuits followed over what that victory actually meant.

    U.S. District Judge Sean Cox in Detroit found that dealers who prevailed were not automatically entitled to reopen their former businesses, and that the federal arbitration law did not trump state dealer franchise laws governing Michigan, Ohio, Nevada and several other states.

    This meant prevailing dealers could be opposed in their return by another competitor in their former market radius, which in Michigan was six miles at the time but has since expanded to nine miles.

    Crestwood Chrysler Dodge Jeep Ram in Garden City, which was acquired in 2013 by The Suburban Collection, had opposed the return of Colleen McDonald's Livonia Chrysler Jeep dealership. Chrysler had also extended the franchise agreement of another dealer near Village while the arbitration process was pending.

    But a panel of judges at the appeals court found that the federal law used in the arbitration process pre-empts state laws in Michigan and Nevada that would allow facing dealers to protest the prevailing dealer's reopening.

    “Our understanding is the dealers (in the appeal) will all be able, if they can satisfy the conditions in their letters of intent (from Chrysler), to go back and be part of what's now the Fiat Chrysler Automobiles dealership body,” said Eric Bowden, principal at suburban Detroit law firm Colombo & Colombo PC, who represented Fox Hills in Plymouth, Village in Royal Oak and Jim Marsh Chrysler Jeep in Las Vegas.

    The appeals court also found that an arbitration victory did not give the dealers unconditional reinstatement, but that it “should meaningfully facilitate incorporation of prevailing dealerships back into the network.”

    Michael Palese, manager of legal communications for Chrysler, said in a statement Jan. 20 that the auto maker was “reviewing the decision and considering if we need to pursue any of our legal options,” following the decision.

    “FCA U.S. (Chrysler) is pleased the Sixth Circuit affirmed the District Court's ruling that Section 747 did not provide for reinstatement of the dealers who prevailed in arbitration, but only gave them a right to a ‘customary and usual' letter of intent,” the statement said.

    Automotive News reporter Jamie LaReau contributed to this story, which appeared in Crain's Detroit Business, a sister publication of Tire Business.

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    Most Popular
    1
    Hankook opens largest tire testing facility in Asia
    2
    Heintschel converts to Marangoni Ringtread process
    3
    Value tire maker Sailun gets aggressive in U.S. market
    4
    4 Wheel Parts opens first retail location in N.J.
    5
    JK Tyre: fiscal '22 earnings drop despite higher sales
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    Reader Services
    • Staff
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • OPINION
      • BUSINESS/FINANCIAL
      • COMMERCIAL TIRE
      • GOVERNMENT & LAW
      • Humanitarian Award
      • RETAIL TIRES
      • SERVICE ZONE
      • TIRE MAKERS
      • Best Places to Work
      • RUSSIA WAR IN UKRAINE
    • Aligning with ADAS
    • Data
      • DATA STORE
    • Custom
      • SPONSORED CONTENT
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
    • Resources
      • DIRECTORY
      • CLASSIFIEDS
      • SHOP FLOOR
        • BALANCING
        • DEMOUNTING
        • SAFETY
        • TIRE REPAIR
        • TPMS
        • TRAINING
        • VEHICLE LIFTING
        • WHEEL TORQUE
      • AWARDS
        • Best Places to Work
    • ADVERTISE
    • DIGITAL EDITION