The Florida lawsuit, filed in August by Kuhn Mazda, a Tampa dealership, also accuses Mazda's program of violating the federal Robinson-Patman Act, which outlaws price discrimination. That claim makes it a case to watch for dealers nationwide, and other auto retailers and state dealer associations are keeping tabs on the lawsuits.
While it's too early to predict whether either case will reach trial, if they do and if the dealers win, the results would not only be significant for Mazda dealers but could set a precedent for all dealers, said Richard Sox, a partner in Bass Sox Mercer in Tallahassee, Fla., and a lawyer representing Kuhn Mazda. Mazda has about 600 dealerships in the U.S.
"The arguments that Mr. Kuhn is making would apply to dealers across the state to all brands as it relates to facility-related incentive programs that are put in place from time to time by manufacturers," Sox told Automotive News.
The New Jersey case, filed this month by the New Jersey Coalition of Automotive Retailers on behalf of its 16 Mazda dealer members, claims Mazda is violating the New Jersey Franchise Practices Act, designed to protect dealers from pricing discrimination and "financially unjustified" dealership requirements that can drive up operating costs.
"If Mazda wants a palace, Mazda can pay for a palace," the coalition's president, Jim Appleton, told Automotive News. "They just can't have a two-tier pricing program that forces the dealer to pay for it."
Mazda declined to comment directly on the lawsuits but defended its program in an emailed statement to Automotive News.
"As a matter of Mazda policy, we cannot comment on the specifics of either case as both are active litigation matters," the Mazda statement said. "Similar to other [automaker] programs, MBEP is a program that incentivizes dealer behavior, including among other things, the construction of Mazda's Retail Evolution Image facility, maintaining dedicated personnel and providing an excellent customer experience. It is available to all dealers in both states."