Chrysler has defeated efforts by Illinois and Maine to give dealerships terminated as part of its bankruptcy an inside track on new franchises, leaving Colorado as the only state whose law may survive.
The automaker's win last month in federal court in New York was another victory in its long-term plan to streamline its dealer network.
The court held that federal bankruptcy law under which Chrysler closed 789 dealerships in 2009 trumps two new state laws.
Illinois and Maine enacted post-bankruptcy laws requiring Chrysler and General Motors to give rejected dealerships the first shot at new franchises awarded in their areas.
Spokesmen for the two state governments said they didn't intend to appeal the Dec. 3 court decision, effectively marking an end to their laws. The Colorado attorney general intends to continue fighting Chrysler's suit in U.S. Bankruptcy Court, a spokesman said.
A Chrysler spokesman declined to comment.
Last summer, the company said the actions to right-size Chrysler Group's dealer network were a necessary part of Chrysler's viability.
Illinois and Maine were among five states that sought to give dealerships new chances for restoration after their 2009 terminations.
Chrysler sued all five, and only Oregon has prevailed in court. But Oregon has a more limited statute than the others, requiring a terminated dealership to sue to stop an automaker from awarding a new franchise nearby. None has done so.
Last April, North Carolina backed down from enforcing its law in a settlement with Chrysler.
As part of its 2009 bankruptcy restructuring, Chrysler cut a quarter of its 3,200 dealerships -- reducing the network to about 2,400. It set a goal of 2,300 stores by the end of 2011.
But Congress gave rejected GM and Chrysler dealerships the right to seek reinstatement in arbitration.
Only 21 of Chrysler's 789 closed stores have been restored, either through arbitration or settlements, Chrysler spokesman Michael Palese said last week.
Chrysler now has 2,317 dealerships, he said.