Restored Chrysler dealers lose court battle

Chrysler dealers who lost their franchises in the company's 2009 bankruptcy had another setback last week.

A federal judge in Detroit ruled that former Chrysler dealers who lost their franchise agreements and then regained them through arbitration do not necessarily have a right to reopen under the same market conditions as before.

The court found that the federal Consolidated Appropriations Act of 2010, which created the arbitration process for terminated dealers, does not trump state laws governing dealer markets, Crain's Detroit Business reported.

That means more than 20 of Chrysler's former dealers -- parties in three consolidated federal lawsuits -- in Michigan, Wisconsin, California, Ohio, Nevada and Florida have only an agreement with the automaker to be added to its dealership network, much as if they were starting a new business.

They may not be able to enter a market where another dealer offers the same brand of cars and challenges their presence. The returning dealers also cannot seek a court order upholding a favorable arbitration ruling and are barred from seeking financial damages from Chrysler.