Trial to challenge legality of GM facilities program
Braman: GM’s Essential Brand Elements program violates federal law.
Billionaire megadealer Norman Braman's lawsuit charging General Motors with illegal two-tier pricing is shaping up to go to trial in October 2013.
The suit, which has captured the attention of dealers nationwide, could be a test case on the legality of manufacturer facility programs that reward participating dealerships with volume-based incentives.
The trial date is being proposed by both Braman and GM in a joint scheduling report submitted June 29 in federal court in Florida. If the judge assigned to the case approves the timetable, the parties will prepare to argue their positions in court 15 months from now -- if a settlement doesn't happen first.
That is a possibility, according to the June 29 filing. In that document, GM said: "The parties have continued previous discussions with regard to settlement and agreed to move forward with these discussions over the next several weeks."
A GM spokesman declined to comment on the case. Stanley Krieger, general counsel for Braman Management in Miami, said he could not comment on settlement talks.
Braman says that GM's Essential Brand Elements program leads to two-tier pricing in violation of the federal Robinson-Patman Act. He also says GM is violating a 2009 Florida law that requires manufacturers to pay a "reasonable" portion of an incentive to dealers who don't comply with facility standards as long as they satisfy other elements of a manufacturer's program. The law presumes a reasonable payment to be 80 percent. GM has told Florida dealers it will pay only 20 percent, according to Braman's lawyers.
In 2011, GM stopped Essential Brand Elements payments to Braman's Miami Cadillac store entirely, costing the store a per-vehicle incentive of about $700, Krieger said earlier this year. The payments were dropped after the parties came to an impasse over renovations to the Cadillac store. According to the lawsuit, GM wants Braman to cover the showroom's exterior walls with limestone that's too heavy for the building's structure. Braman says he would have to raze and rebuild the facility to use the designated limestone.
Braman's lawsuit was originally filed in state court in Miami-Dade County in January. In February, it was moved to federal court where a string of judges have since recused themselves. Current Judge Jose E. Martinez, who was assigned the lawsuit on May 30, is the fifth judge to preside over the case.
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