California's New Motor Vehicle Board doesn't need to hold a hearing before rejecting a dealership's protest of the termination of its Plymouth franchise when DaimlerChrysler Corp. dropped the line.
And a disgruntled dealer can't use the board to try to secure a Jeep franchise or to collect damages, the state Court of Appeal in Sacramento has ruled.
"Where it is undisputed that a franchisor is discontinuing manufacture of the product and the franchise agreement allows for termination upon discontinuation, good cause for termination exists," Judge Richard Sims said.
Nader Chrysler-Plymouth of Martinez filed the protest after DaimlerChrysler notified all Plymouth dealers that it would phase out the Plymouth brand at the end of the 2001 model year and terminate all franchises. Nader kept its Chrysler franchise.
The board dismissed the protest, as did a trial-level judge.
In its unanimous decision, the Court of Appeal said the board had authority to reject the protest without a full hearing.
"The board has no power to conclude" there was no good cause, the court said. "Nor does the board have the power to award damages or grant other relief sought by Nader, such as award of a new Jeep franchise to compensate for termination of the Plymouth franchise."
It said Nader might be able to sue DaimlerChrysler for damages in a civil suit but took no position on the merits of such litigation.
Dealership lawyer Michael Sieving of Sacramento says state law entitles dealers to a hearing before the board rejects a protest.
"We never got our good-cause hearing," he says, "whether it would be futile or not."
He says DaimlerChrysler earlier had proposed to award Nader a Jeep franchise but other dealers in the relevant market area had protested.
Sieving says he doesn't know whether Nader will pursue the claim further.
DaimlerChrysler spokeswoman Ann Smith says there are a couple of other pending challenges to Plymouth franchise terminations, but, she says: "We don't think they have any merit. Most Plymouth franchises were closed without any incident or challenge.
"There's no brand. Therefore, it's reasonable to take away the franchise."
You can send e-mail to Eric Freedman at [email protected]