2021 LEGISLATIVE SESSION HB 3940 • Requires vehicle manufacturers to compensate franchised dealers fairly and adequately for warranty work on vehicles. • Adjusts manufacturer calculations for time allowances, labor rates and parts prices for warranty work. • Extends warranty reimbursement provisions to recall repairs. • Ensures that vehicle technicians at Illinois’ dealerships earn equal pay for equal work. It generated a positive economic impact in Illinois. HB 2435 • Prohibits a manufacturer from prohibiting or requiring a dealer to offer a specific secondary product, including service contracts, maintenance agreements, extended warranties, protection product guarantees, gap waivers, insurance, replacement parts, vehicle accessories, oil or supplies. • Permits a manufacturer to offer an incentive program to encourage dealers to offer manufacturer-approved or endorsed secondary products. • Prevents manufacturers from dictating to dealers to use only their products and extended service contracts. 2023: MERCEDES-BENZ V. JP MOTORS REAFFIRMS IMPORTANCE OF MOTOR VEHICLE REVIEW BOARD A 2023 federal district court decision, Mercedes-Benz USA LLC. V. JP Motors Inc., 2023 U.S. Dist. Lexis 211132, reinforced the importance of the Motor Vehicle Review Board as the proper venue to resolve disputes arising under the Act. In JP Motors, a dealer who owned a combined Mercedes-Benz, Chevrolet and Nissan dealership notified each of his OEMs of his intent to sell the dealership. Chevrolet and Nissan approved the sale, but Mercedes-Benz exercised a right of first refusal to block the sale. Mercedes insisted on an apportionment of the selling price that could be attributed to the Mercedes-Benz franchise before deciding whether to approve the sale. After JP Motors responded to Mercedes-Benz that the Act did not entitle Mercedes-Benz to an apportionment, Mercedes-Benz filed suit in federal court alleging that JP’s refusal to provide the apportionment violated the Mercedes-Benz dealer agreement. The federal judge in JP Motors dismissed Mercedes-Benz’s lawsuit, holding that the federal court must abstain from deciding a matter that should properly be heard by the Motor Vehicle Review Board. The judge stated that the state had a significantly greater interest in regulating the sale and distribution of motor vehicles, which “vitally affect the general economy of the State and the public interest, welfare and safety” of Illinoisans. The case was dismissed from federal court and remanded to the Motor Vehicle Review Board. The Board denied Mercedes-Benz’s right of first refusal request and the parties were then able to complete the buy/sell agreement. 19 Illinois Automobile Dealer News
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