Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Inc. v. General Motors LLC

United States District Court, W.D. Wisconsin

May 16, 2019

DON JOHNSON'S HAYWOOD MOTORS, INC., GROSS MOTORS, INC., GROSS CHEVROLET-BUICK-GMC, INC., BROADWAY AUTOMOTIVE - GREEN BAY, INC., SLEEPY HOLLOW CHEVROLET BUICK MGC INC., MIKE SHANNON AUTOMOTIVE INC., HERITAGE CHEVROLET, INC., A-F MOTORS, INC., KOCOREK CHEVROLET, INC., KLEIN CHEVROLET BUICK, INC., TOYCEN OF LADYSMITH, INC., and NEUVILLE MOTORS, INC., Plaintiffs,
v.
GENERAL MOTORS LLC, Defendant.

          OPINION AND ORDER

          JAMES D. PETERSON, DISTRICT JUDGE

         Plaintiffs-twelve Wisconsin-based licensed motor vehicle dealers-filed an administrative complaint against General Motors (GM) with the State of Wisconsin Division of Hearings and Appeals (DHA). See Dkt. 1-1. The complaint alleged that GM had violated Wis.Stat. § 218.0116(8) by modifying the terms of the plaintiffs' motor vehicle dealer agreements-specifically by seeking to impose a surcharge to recoup costs associated with Wisconsin's warranty reimbursement statute. Before administrative proceedings in the DHA got underway, GM removed the case to this court under 28 U.S.C. §§ 1332 and 1441, invoking the court's diversity jurisdiction. Dkt. 1. GM moved to dismiss plaintiffs' claims in full. Dkt. 2. Plaintiffs moved to remand the case to the DHA. Dkt. 10. Those motions are now ready for review.

         The court concludes that the DHA action is not removable to federal court. To remove an action from an administrative agency under 28 U.S.C. § 1441, the removing party must show that the agency is functionally similar to a court, and that the federal interests implicated in the dispute predominate over state interests. See Floeter v. C.W. Transp., Inc., 597 F.2d 1100, 1102 (7th Cir. 1979). Here, even assuming that the DHA is sufficiently court-like, the court is not persuaded that the federal interests in hearing the dispute in this forum predominate over the state's interests in providing administrative oversight of motor vehicle dealer agreements. The court will grant plaintiffs' motion to remand. GM's motion to dismiss is denied as moot.

         BACKGROUND

         The court draws the basic facts from plaintiffs' administrative complaint, Dkt. 1-1, as well as from their prior related litigation against GM in the Eastern District of Wisconsin. See Don Johnson Hayward Motors, Inc. v. Gen. Motors LLC, No. 16-cv-1350, 2018 WL 4568822 (E.D. Wis. Sept. 24, 2018) (granting summary judgment in favor of GM on two counts).

         Plaintiffs are a group of Wisconsin motor vehicle dealerships that sell and lease vehicles manufactured by GM. As part of their motor vehicle dealer agreements with GM, plaintiffs are required to perform warranty repairs on qualifying GM vehicles, at no cost to the owner and regardless where the owner bought the vehicle. Plaintiffs can be reimbursed by GM in one of two ways. The dealer agreements provide that GM will reimburse dealers for performing warranty repairs according to a reimbursement rate determined by GM. Alternatively, dealers may opt to receive reimbursements at a rate determined using the warranty-reimbursement provision in Chapter 218 of the Wisconsin Statutes. See Wis Stat. § 218.0125. The statute requires motor vehicle manufacturers and distributors to “reasonably compensate” dealers who perform those warranty repairs. In 2011, the legislature amended the act to add a statutory formula to determine the rate of reasonable compensation. See Wis. Stat. § 218.0125(3m)(a). The court need not delve into the intricacies of that formula; the important point is that the statutory formula yields more generous reimbursement for plaintiffs than the rates set by GM. So each of the plaintiffs has requested the statutory warranty compensation.

         On September 26, 2016, GM notified the plaintiffs that it would add a cost recovery surcharge to invoices on any new vehicles they purchased. This surcharge was intended to recover the increased costs associated with reimbursing plaintiffs and other Wisconsin dealers the enhanced amounts afforded under § 218.0125. A few weeks later, plaintiffs filed a federal case in the United States District Court for the Eastern District of Wisconsin, asserting that the surcharge violated GM's obligation to reasonably compensate dealers for warranty work under § 218.0125 and seeking injunctive relief to prevent GM from imposing the surcharge. See Don Johnson Hayward Motors, Inc. v. Gen. Motors LLC, No. 16-cv-1350 (E.D. Wis., filed Oct. 7, 2016). GM voluntarily held off on the surcharge until the court resolved the parties' cross-motions for summary judgment. On September 24, 2018, Judge Pamela Pepper granted summary judgment in favor of GM on two of plaintiffs' four counts, holding that GM's plan to impose the surcharge did not violate the guarantee of reasonable compensation under § 218.0125.[1] On October 8, 2018, GM notified plaintiffs that it intended to implement the surcharge.

         On October 22, 2018, plaintiffs filed an administrative complaint against GM with the DHA, alleging that the per-vehicle surcharge violated another provision of Chapter 218: section 218.0116(8). See Dkt. 1-1 (DHA complaint). That section provides that vehicle manufacturers may not “modify a motor vehicle dealer agreement during the term of the agreement or upon its renewal if the modification substantially and adversely affects the motor vehicle dealer's rights, obligations, investment or return on investment without giving 60 days written notice of the proposed modification to the motor vehicle dealer” except in certain circumstances not present here. Wis.Stat. § 218.0116(8)(a). The statute provides that, within the 60-day notice period, a motor vehicle dealer may “file with the department of transportation and the division of hearings and appeals and serve upon the respondent a complaint for a determination whether there is good cause for permitting the proposed modification.” Id. The DHA must then “promptly schedule a hearing and decide the matter, ” taking into consideration “any relevant factor, ” including:

1. The reason for the proposed modification.
2. Whether the proposed modification is applied to or affects all motor vehicle dealers in a nondiscriminating manner.
3. The degree to which the proposed modification will have a substantial and adverse effect upon the motor vehicle dealer's rights, investment, or return on investment.
4. Whether the proposed modification is in the public interest.
5. The degree to which the proposed modification is necessary to the orderly and profitable distribution of product by the respondent.
6. Whether the proposed modification is offset by other modifications beneficial to the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.