776 F.3d 411
6th Cir.2015Background
- Chrysler restructuring post-bankruptcy created New Chrysler, transferring assets from Old Chrysler via 11 U.S.C. § 363(f).
- § 747 of the Consolidated Appropriations Act of 2010 established an arbitration process for terminated dealers to seek continuation or reinstatement or addition to the network.
- Arbitrations produced letters of intent (the sole remedy under § 747) rather than unconditional reinstatement, except for Livonia who challenged the remedy’s scope.
- State dealer protest laws in Michigan and Nevada would have allowed a second, independent determination of good cause, potentially delaying or blocking entry of new dealerships.
- District court held § 747 preempts those state laws, and that § 747 remedy is limited to a customary and usual letter of intent, with some disputes remaining over Livonia’s specific terms.
- This appeal consolidates challenges from several dealers (Fox Hills, Village, Jim Marsh, Livonia) and addresses constitutionality and preemption questions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 747 provide unconditional reinstatement or a customary letter of intent? | Prevailing dealers seek reinstatement as the remedy. | Statute provides only a customary and usual letter of intent as the remedy. | Remedy is a customary and usual letter of intent. |
| Does § 747 preempt Michigan and Nevada state dealer protest laws? | State laws create obstacles to the § 747 remedy and should be preempted. | State laws operate alongside § 747 and serve public interests. | Section 747 preempts state dealer protest laws in Michigan and Nevada. |
| Does § 747 violate separation of powers or constitutional separation principles? | Reopening or undermining a bankruptcy judgment through retroactive effects could violate separation powers. | Prospective relief does not reopen final judgments and is constitutionally sound. | § 747 does not violate separation of powers. |
| Is Livonia’s site-approval (and related) provisions in its letter of intent customary and usual? | Site-approval terms may be onerous and not customary in Livonia’s context. | Site-control and exclusivity provisions are customary for Livonia’s market. | Site-approval provision may not be customary and usual; remand on Livonia’s terms is required. |
Key Cases Cited
- Leslie Miller, Inc. v. Arkansas, 352 U.S. 187 (1956) (state licensing cannot review federal determinations; preemption policy.)
- Sperry v. Florida, 373 U.S. 379 (1963) (federal requirements preempt state licensing when it hinders federal objectives.)
- Plaut v. Spendthrift Farm, Inc., 514 U.S. 211 (1995) (separation-of-powers concerns with respect to final judgments.)
- Eagle Auto Mall Corp. v. Chrysler Grp., LLC, 550 F. App’x 69 (2014) (Second Circuit—definition of the 'relevant universe' for letters of intent under § 747.)
- Los Feliz Ford, Inc. v. Chrysler Grp., LLC, 571 F. App’x 546 (2014) (Ninth Circuit—letters of intent comparison; defer to ordinary course letters.)
- Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363 (2000) (conflict preemption framework for federal statutes.)