Minnesota Session Laws - 2000, Regular Session

                            CHAPTER 409-H.F.No. 2731 
                  An act relating to commerce; motor vehicle sales and 
                  distribution; regulating unfair practices by 
                  manufacturers, distributors, and factory branches; 
                  amending Minnesota Statutes 1998, sections 80E.13; and 
                  80E.14, subdivision 1. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1998, section 80E.13, is 
        amended to read: 
           80E.13 [UNFAIR PRACTICES BY MANUFACTURERS, DISTRIBUTORS, 
        FACTORY BRANCHES.] 
           It is unlawful and an unfair practice for a manufacturer, 
        distributor, or factory branch to engage in any of the following 
        practices:  
           (a) To delay, refuse, or fail to deliver new motor vehicles 
        or new motor vehicle parts or accessories in reasonable time and 
        in reasonable quantity relative to the new motor vehicle 
        dealer's facilities and sales potential in the dealer's relevant 
        market area, after having accepted an order from a new motor 
        vehicle dealer having a franchise for the retail sale of any new 
        motor vehicle sold or distributed by the manufacturer or 
        distributor, if the new motor vehicle or new motor vehicle parts 
        or accessories are publicly advertised as being available for 
        delivery or actually being delivered.  This clause is not 
        violated, however, if the failure is caused by acts or causes 
        beyond the control of the manufacturer; 
           (b) To refuse to disclose to any new motor vehicle dealer 
        handling the same line make, the manner and mode of distribution 
        of that line make within the relevant market area; 
           (c) To obtain money, goods, service, or any other benefit 
        from any other person with whom the dealer does business, on 
        account of, or in relation to, the transaction between the 
        dealer and the other person, other than for compensation for 
        services rendered, unless the benefit is promptly accounted for, 
        and transmitted to, the new motor vehicle dealer; 
           (d) To increase prices of new motor vehicles which the new 
        motor vehicle dealer had ordered for private retail consumers 
        prior to the dealer's receiving the written official price 
        increase notification.  A sales contract signed by a private 
        retail consumer shall constitute evidence of each order if the 
        vehicle is in fact delivered to that customer.  In the event of 
        manufacturer price reductions, the amount of any reduction 
        received by a dealer shall be passed on to the private retail 
        consumer by the dealer if the retail price was negotiated on the 
        basis of the previous higher price to the dealer; 
           (e) To offer any refunds or other types of inducements to 
        any new motor vehicle dealer for the purchase of new motor 
        vehicles of a certain line make without making the same offer to 
        all other new motor vehicle dealers in the same line make within 
        the relevant market area; 
           (f) To release to any outside party, except under subpoena 
        or in an administrative or judicial proceeding involving the 
        manufacturer or dealer, any business, financial, or personal 
        information which may be provided by the dealer to the 
        manufacturer, without the express written consent of the dealer 
        or unless pertinent to judicial or governmental administrative 
        proceedings or to arbitration proceedings of any kind; 
           (g) To deny any new motor vehicle dealer the right of free 
        association with any other new motor vehicle dealer for any 
        lawful purpose; 
           (h) To unfairly discriminate among its new motor vehicle 
        dealers with respect to warranty reimbursement or authority 
        granted its new vehicle dealers to make warranty adjustments 
        with retail customers; 
           (i) To compete with a new motor vehicle dealer in the same 
        line make operating under an agreement or franchise from the 
        same manufacturer in the relevant market area, distributor, or 
        factory branch.  A manufacturer, distributor, or factory branch 
        is considered to be competing when it has an ownership interest, 
        other than a passive interest held for investment purposes, in a 
        dealership of its line make located within the state.  A 
        manufacturer, distributor, or factory branch shall not, however, 
        be deemed to be competing 
           (1) when operating a dealership, either temporarily or for 
        a reasonable period, which is for sale to any qualified 
        independent person at a fair and reasonable price, or when 
        involved in a bona fide relationship in which an independent 
        person has made a significant investment subject to loss in the 
        dealership and can reasonably expect to acquire full 
        ownership and full management and operational control of the 
        dealership within a reasonable time on reasonable terms and 
        conditions, or 
           (2) if it has an existing direct or indirect ownership 
        interest in a new motor vehicle dealer in this state as of 
        January 1, 2000, and has no more than four franchised dealers in 
        this state.  A manufacturer, distributor, or factory branch 
        described in this clause that has unaffiliated dealers of the 
        same line make in this state may acquire an interest in existing 
        dealers of that line make but it may not establish any new 
        dealership in which it would own an interest or approve an 
        additional location for the sale of new motor vehicles by an 
        affiliated dealership.  A manufacturer, distributor, or factory 
        branch described in this clause is permitted to alter its 
        ownership interest in a new motor vehicle dealer; 
           (j) To prevent a new motor vehicle dealer from receiving 
        fair and reasonable compensation for the value of the new motor 
        vehicle dealership.  There shall be no transfer, assignment of 
        the franchise, or major change in the executive management of 
        the dealership, except as is otherwise provided in sections 
        80E.01 to 80E.17, without consent of the manufacturer, which 
        shall not be unreasonably withheld.  Denial of the request must 
        be in writing and delivered to the new motor vehicle dealer 
        within 60 days after the manufacturer receives the information 
        necessary to evaluate the proposed transfer.  If a denial is not 
        sent within this period, the manufacturer shall be deemed to 
        have given its consent to the proposed transfer or change; 
           (k) To threaten to modify or replace or modify or replace a 
        franchise with a succeeding franchise that would adversely alter 
        the rights or obligations of a new motor vehicle dealer under an 
        existing franchise or that substantially impairs the sales or 
        service obligations or investments of the motor vehicle dealer; 
           (l) To unreasonably deny the right to acquire factory 
        program vehicles to any dealer holding a valid franchise from 
        the manufacturer to sell the same line make of vehicles, 
        provided that the manufacturer may impose reasonable 
        restrictions and limitations on the purchase or resale of 
        program vehicles to be applied equitably to all of its 
        franchised dealers.  For the purposes of this paragraph, 
        "factory program vehicle" has the meaning given the term in 
        section 80E.06, subdivision 2.; 
           (m) fail or refuse to offer to its same line make 
        franchised dealers all models manufactured for that line make, 
        other than alternative fuel vehicles as defined in section 
        216C.01, subdivision 1b.  Failure to offer a model is not a 
        violation of this section if the failure is not arbitrary and is 
        due to a lack of manufacturing capacity, a strike, labor 
        difficulty, or other cause over which the manufacturer, 
        distributor, or factory branch has no control; 
           (n) require a dealer to pay an extra fee, or remodel, 
        renovate, or recondition the dealer's existing facilities, or 
        purchase unreasonable advertising displays, training, tools, or 
        other materials, or to require the dealer to establish exclusive 
        facilities or dedicated personnel as a prerequisite to receiving 
        a model or a series of vehicles. 
           Sec. 2.  Minnesota Statutes 1998, section 80E.14, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOTIFICATION; PROTEST; HEARING.] In the 
        event that a manufacturer seeks to enter into a franchise 
        establishing an additional new motor vehicle dealership or 
        relocating an existing new motor vehicle dealership within or 
        into a relevant market area where the line make is then 
        represented, the manufacturer shall, in writing, first notify 
        each new motor vehicle dealer in this line make in the relevant 
        market area of the intention to establish an additional 
        dealership or to relocate an existing dealership within or into 
        that market area.  The relevant market area is a radius of ten 
        miles around an existing dealership.  Within 15 30 days of 
        receiving the notice or within 15 30 days after the end of any 
        appeal procedure provided by the manufacturer, the new motor 
        vehicle dealership may commence a civil action in a court of 
        competent jurisdiction pursuant to section 80E.17 challenging 
        the establishing or relocating of the new motor vehicle 
        dealership.  An action brought under this section shall be 
        placed on the calendar ahead of other civil actions to be heard 
        and determined as expeditiously as possible.  Thereafter the 
        manufacturer shall not establish or relocate the proposed new 
        motor vehicle dealership unless the court has determined that 
        there is good cause for permitting the establishment or 
        relocation of the motor vehicle dealership.  
           For the purposes of this section, the reopening in a 
        relevant market area of a new motor vehicle dealership within 
        two miles of a location at which a former dealership of the same 
        line make had been in operation within the previous two years 
        shall not be deemed the establishment of a new motor vehicle 
        dealership if the reopening is carried out in good faith and 
        does not violate the provisions of section 80E.13, paragraph (i).
           The relocation of an existing dealer within its area of 
        responsibility as defined in the franchise agreement shall not 
        be subject to this section, if the proposed relocation site is 
        within five miles of its existing location and is not within a 
        radius of five miles of an existing dealer of the same line make.
           A manufacturer's establishment or approval of an additional 
        new motor vehicle sales, service, or parts location by its line 
        make dealer is considered the establishment of a new motor 
        vehicle dealership subject to the requirements of this section. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective the day following final 
        enactment. 
           Presented to the governor April 12, 2000 
           Signed by the governor April 14, 2000, 2:15 p.m.