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Capital IconMinnesota Legislature

HF 3238

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.
  1.1                          A bill for an act 
  1.2             relating to trade regulations; regulating farm 
  1.3             equipment manufacturers and dealers; amending 
  1.4             Minnesota Statutes 1998, sections 325E.062, 
  1.5             subdivision 1, and by adding subdivisions; and 
  1.6             325E.063. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1998, section 325E.062, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [GOOD CAUSE REQUIRED.] No farm equipment 
  1.11  manufacturer, directly or through an officer, agent, or employee 
  1.12  may terminate, cancel, fail to renew, or substantially change 
  1.13  the competitive circumstances of a dealership agreement without 
  1.14  good cause.  "Good cause" means failure by a farm equipment 
  1.15  dealer to substantially comply with essential and reasonable 
  1.16  requirements imposed upon the dealer by the dealership 
  1.17  agreement, if the requirements are not different from those 
  1.18  requirements imposed on other similarly situated dealers by 
  1.19  their terms.  In addition, good cause exists whenever: 
  1.20     (1) without the consent of the farm equipment manufacturer 
  1.21  who shall not withhold consent unreasonably, (a) the farm 
  1.22  equipment dealer has transferred an interest in the farm 
  1.23  equipment dealership, or (b) there has been a withdrawal from 
  1.24  the dealership of an individual proprietor, partner, major 
  1.25  shareholder, or the manager of the dealership, or (c) there has 
  1.26  been a substantial reduction in interest of a partner or major 
  2.1   stockholder, provided, however, that the farm equipment 
  2.2   manufacturer must show that any such transfer, withdrawal, or 
  2.3   reduction in interest would be detrimental to the representation 
  2.4   or reputation of the manufacturer's products, and provided 
  2.5   further that the transfer of an interest in or change in 
  2.6   management of the farm equipment dealership to a transferee or 
  2.7   manager who meets the present reasonable qualifications of the 
  2.8   farm equipment manufacturer does not constitute good cause for 
  2.9   termination; 
  2.10     (2) the farm equipment dealer has filed a voluntary 
  2.11  petition in bankruptcy or has had an involuntary petition in 
  2.12  bankruptcy filed against it which has not been discharged within 
  2.13  30 days after the filing, or there has been a closeout or sale 
  2.14  of a substantial part of the dealer's assets related to the farm 
  2.15  equipment business, or there has been a commencement of 
  2.16  dissolution or liquidation of the dealer; 
  2.17     (3) there has been a change, without the prior written 
  2.18  approval of the manufacturer, in the location of the dealer's 
  2.19  principal place of business under the dealership agreement; 
  2.20     (4) the farm equipment dealer has defaulted under a chattel 
  2.21  mortgage or other security agreement between the dealer and the 
  2.22  farm equipment manufacturer, or there has been a revocation or 
  2.23  discontinuance of a guarantee of the dealer's present or future 
  2.24  obligations to the farm equipment manufacturer; 
  2.25     (5) the farm equipment dealer has failed to operate in the 
  2.26  normal course of business for seven consecutive days or has 
  2.27  otherwise abandoned the business; 
  2.28     (6) the farm equipment dealer has pleaded guilty to or has 
  2.29  been convicted of a felony affecting the relationship between 
  2.30  the dealer and manufacturer; 
  2.31     (7) the dealer has engaged in conduct which is injurious or 
  2.32  detrimental to the dealer's customers or to the public welfare; 
  2.33  or 
  2.34     (8) the farm equipment dealer, after receiving notice from 
  2.35  the manufacturer of its requirements for reasonable market 
  2.36  penetration based on the manufacturer's experience in other 
  3.1   comparable marketing areas, consistently fails to meet the 
  3.2   manufacturer's market penetration requirements. 
  3.3      Sec. 2.  Minnesota Statutes 1998, section 325E.062, is 
  3.4   amended by adding a subdivision to read: 
  3.5      Subd. 2a.  [GENERAL RESTRICTIONS.] The following 
  3.6   circumstances are not cause for the termination, cancellation, 
  3.7   failure to renew, or substantial change in competitive 
  3.8   circumstances of a dealership agreement: 
  3.9      (1) refusal by the dealer to purchase or accept delivery of 
  3.10  any machinery, parts, accessories, or any other commodity or 
  3.11  service not ordered by the dealer unless the machinery, parts, 
  3.12  accessories, or other commodity or service is necessary for the 
  3.13  operation of machinery commonly sold in the dealer's area of 
  3.14  responsibility; 
  3.15     (2) the sole fact that the manufacturer desires further 
  3.16  penetration of the market; 
  3.17     (3) the fact that the dealer owns, has an investment in, 
  3.18  participates in the management of, or holds a dealership 
  3.19  contract for the sale of another line-make of machinery or that 
  3.20  the dealer has established another line-make of machinery in the 
  3.21  same dealership facilities as those of the manufacturer, if the 
  3.22  dealer maintains a reasonable line of credit for each line-make 
  3.23  of machinery; or 
  3.24     (4) refusal by the dealer to participate in any national 
  3.25  advertising campaign or contest or purchase any promotional 
  3.26  materials, display devices, or display decoration or materials 
  3.27  which are at the expense of the dealer. 
  3.28     Sec. 3.  Minnesota Statutes 1998, section 325E.062, is 
  3.29  amended by adding a subdivision to read: 
  3.30     Subd. 2b.  [ASSIGNMENTS, TRANSFERS, OR SALES.] No farm 
  3.31  equipment manufacturer, directly or through an officer, agent, 
  3.32  or employee may withhold consent to an assignment, transfer, or 
  3.33  sale of a dealer's dealership, assets, or interest in a 
  3.34  dealership agreement whenever the transferee or buyer meets the 
  3.35  present reasonable qualifications and standards then required by 
  3.36  the farm equipment manufacturer. 
  4.1      Sec. 4.  Minnesota Statutes 1998, section 325E.063, is 
  4.2   amended to read: 
  4.3      325E.063 [VIOLATIONS.] 
  4.4      (a) It is a violation of sections 325E.061 to 325E.065 for 
  4.5   a farm equipment manufacturer to coerce a farm equipment dealer 
  4.6   to accept delivery of farm equipment which the farm equipment 
  4.7   dealer has not voluntarily ordered. 
  4.8      (b) It is a violation of sections 325E.061 to 325E.065 for 
  4.9   a farm equipment manufacturer to: 
  4.10     (1) condition or attempt to condition the sale of farm 
  4.11  equipment on a requirement that the farm equipment dealer also 
  4.12  purchase other goods or services; except that a farm equipment 
  4.13  manufacturer may require the dealer to purchase all parts 
  4.14  reasonably necessary to maintain the quality of operation in the 
  4.15  field of any farm equipment used in the trade area and 
  4.16  telecommunication necessary to communicate with the farm 
  4.17  equipment manufacturer; 
  4.18     (2) coerce a farm equipment dealer into a refusal to 
  4.19  purchase the farm equipment manufactured by another farm 
  4.20  equipment manufacturer; 
  4.21     (3) discriminate in the prices charged for farm equipment 
  4.22  of like grade and quality sold by the farm equipment 
  4.23  manufacturer to similarly-situated farm equipment dealers.  The 
  4.24  clause does not prevent the use of differentials which make only 
  4.25  due allowance for difference in the cost of manufacture, sale, 
  4.26  or delivery or for the differing methods or quantities in which 
  4.27  the farm equipment is sold or delivered, by the farm equipment 
  4.28  manufacturer; or 
  4.29     (4) attempt or threaten to terminate, cancel, fail to 
  4.30  renew, or substantially change the competitive circumstances of 
  4.31  the dealership agreement if the attempt or threat is based on 
  4.32  the results of a natural disaster, including a sustained drought 
  4.33  in the dealership market area, a labor dispute, or other 
  4.34  circumstance beyond the dealer's control. 
  4.35     (c) It is a violation of sections 325E.061 to 325E.065 for 
  4.36  a farm equipment manufacturer either:  (i) to attempt to enforce 
  5.1   against a dealer any existing provisions of a dealership or 
  5.2   other agreement; or (ii) to require a dealer to agree to the 
  5.3   inclusion of a term or condition in a dealership or other 
  5.4   agreement: 
  5.5      (1) that requires the dealer to waive trial by jury in 
  5.6   cases involving the manufacturer; 
  5.7      (2) that requires that disputes between the manufacturer 
  5.8   and dealer be submitted to arbitration or to any other binding 
  5.9   alternative dispute resolution procedure.  However, any 
  5.10  dealership contract, lease, or agreement may authorize the 
  5.11  submission of a dispute to arbitration or to binding alternate 
  5.12  dispute resolution if the manufacturer and dealer voluntarily 
  5.13  agree to submit the dispute to arbitration or binding 
  5.14  alternative dispute resolution at the time the dispute arises; 
  5.15     (3) that requires a dealer to pay the attorney fees of a 
  5.16  manufacturer; 
  5.17     (4) that directly or indirectly waives or releases the 
  5.18  provisions of sections 325E.06, 325E.061 to 325E.065, by a 
  5.19  choice of law provision, direct waiver or release or otherwise; 
  5.20  or 
  5.21     (5) that requires a dealer to bring or defend a legal suit, 
  5.22  action, arbitration, or mediation with the manufacturer in any 
  5.23  venue other than Minnesota. 
  5.24     Sec. 5.  [EFFECTIVE DATE; APPLICATION.] 
  5.25     Sections 1 to 4 are effective the day following final 
  5.26  enactment and apply to all dealership agreements in effect on 
  5.27  this date that have no expiration date and to all other 
  5.28  agreements entered into, amended, or renewed on or after this 
  5.29  date.