AB 473 Empowers Dealers to Push Back Against Unlawful Manufacturer Programs By Anthony Bento, CNCDA Chief Legal Officer The California New Motor Vehicle Board plays a key role in adjudicating disputes between dealers and manufacturers. The Board is authorized to adjudicate disputes involving franchise termination, modification and warranty reimbursement. The Board can further adjudicate disputes involving manufacturer performance standards and chargebacks or disapprovals. Dealers file “protests” with the Board to compel manufacturers to follow California franchise law. After the dealer files a protest, the Board may order a mandatory settlement conference. If a settlement cannot be reached, an administrative law judge may oversee litigation that culminates with a proceeding akin to a trial. At this proceeding, evidence is presented by both the dealer and manufacturer. Following the proceeding, the judge will issue a proposed decision. The Board may adopt, modify or reject the proposed decision. The Board offers several advantages when compared to litigation in state Superior Court. First, although the process is not swift, it is generally less expensive, complicated and time-consuming when compared to ordinary court proceedings. Second, administrative law judges on the Board often have subjectmatter expertise on dealer franchise law, which means dealer counsel may need to spend less time educating the judges about the relevant law. Third, many protest rights contain a burden-shifting provision that requires the manufacturer to demonstrate that their action complies with the law. Finally, the Board itself includes dealer members who understand the need for fair rules governing automotive franchise relationships. While 21 California New Car Dealer Quarterly
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