Rival stores to Braman: Keep us out of GM fight
Braman: Seeking data
Many dealers across the country are cheering on billionaire megadealer Norman Braman in his two-tier pricing lawsuit against General Motors. But some rival Cadillac dealers in South Florida don't want to be drawn into the case themselves.
Late last year, Braman's legal team subpoenaed 10 Cadillac dealerships that compete against his Miami Cadillac store. Braman is seeking documents from rivals to help prove his contention that GM's Essential Brand Elements program results in two-tier pricing in violation of the federal Robinson-Patman Act, a Depression-era law that prohibits price discrimination by manufacturers.
At least three dealership groups -- Vera Cadillac-Buick-GMC; AutoNation Inc., which owns Maroone Cadillac; and Ed Morse Automotive Group, which owns three of the subpoenaed dealerships -- are resisting. They say the information being sought is proprietary and are asking the federal court overseeing the lawsuit to quash the demands. A judge will hear arguments on the subpoenas and the motions to quash this week.
"No dealer should have to provide to a direct competitor his confidential and trade secret information," said Loula Fuller, a lawyer representing Vera Cadillac owner Louis Vera. Vera Cadillac is in Pembroke Pines, Fla.
"If Braman had the same request posed to them that they requested of us and others, they would have screamed like a mashed cat," Fuller said.
Fuller says Braman should work with GM to obtain the information in a way that maintains confidentiality for the individual dealers.
The Braman lawsuit is shaping up to be a test case on the legality of manufacturer facility programs that pay bonuses based on volume to participating dealerships. Braman says GM cut off payments under the Essential Brand Elements program to the Miami Cadillac store in 2011 after the parties came to an impasse over store renovations. The case is scheduled to go to trial in July, though court-ordered mediation could begin as early as this month.
In court filings regarding the motions to quash, Braman's lawyers said rival dealerships' objections to the subpoenas are "both factually and legally insufficient." Braman wants the dealerships to provide communications and documents related to the Essential Brand Elements program, plus extensive documentation on vehicles purchased from GM and sold to consumers dating back to the beginning of 2009.
"Braman must show that the price discrimination gave Braman's competitors a competitive advantage over it, such as the ability to sell at lower retail prices, causing Braman either to lose sales to the favored buyers or to match their lower prices and lose profits," one of the Braman filings says. A Braman representative wasn't available to comment.
Braman is offering to limit access to the rival dealerships' documents to outside counsel and retained experts. The Braman legal team also is willing to work with the other dealerships to minimize the burden of producing the documents, according to the filings.
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