Majors Challenge NH Dealer Law in Court

AEM reports that Deere, CNH and AGCO have filed a lawsuit in New Hampshire state court, seeking to halt enforcement of S.B. 126. This new law is scheduled to go into effect on September 23, 2013.

Members wishing to follow this case and other legal and legislative issues can do so at their convenience at FarmEquip.org/laws.

George Keeley, AEM legal counsel, has provided the following analysis of the Majors vs. New Hampshire that, according to the complaint, the plaintiffs’ current dealership agreements will be severely and substantially impaired by S.B. 126 in numerous ways, including:

1. Plaintiffs are not permitted to change a dealer’s dealership area without good cause;
2. Plaintiffs are not allowed to terminate, cancel, or non-renew a dealership agreement without good faith, good cause, and a finding by the New Hampshire Motor Vehicle Industry Board that good cause exists;
3. Plaintiffs are not permitted to compete with a dealer or to authorize others to compete with the dealer or to add dealerships to an existing dealership area or to relocate an existing dealership without good cause and, if challenged, approval of the New Hampshire Motor Vehicle Board is required;
4. Plaintiffs are not allowed to terminate a dealer for changing key management personnel, for selling competing products under the dealership’s roof, and for refusing to meet the minimum equity level or capital standards set by the plaintiffs;
5. Plaintiffs have no discretion to require their dealers to maintain a certain level of equity or capital in the dealership;
6. Plaintiffs have no discretion to control their warranty prices;
7. Plaintiffs have no discretion to limit within its line make the types of equipment a dealer may purchase for sale;
8. Arbitration as the sole dispute resolution under some of plaintiffs’ dealership agreements is eliminated;
9. Plaintiffs have no discretion to reject fulfilling orders from a dealer for certain reasons;
10. Plaintiffs’ ability to enter into good faith settlement agreements in connection with a dealership agreement is severely curtailed; and
11. Plaintiffs and their dealers may not freely amend their dealership agreements by mutual agreement.

The complaint asks the state court to declare S.B. 126 — as it applies to Plaintiffs’ existing dealership agreements — unconstitutional, void and unenforceable; and seeks a preliminary and permanent injunction against the state to stop New Hampshire’s enforcement of this law. It is anticipated that the plaintiffs will ask the court to issue a preliminary injunction barring enforcement of the law prior to the law’s September 23, 2013 effective date.