862 F. Supp. 2d 661
E.D. Mich.2012Background
- Following Chrysler and GM bankruptcies, Congress enacted Section 747 to provide arbitration rights to terminated/rejected dealers; several rejected Old Chrysler dealers prevailed in 747 arbitrations with New Chrysler; disputes focus on what relief 747 provides and whether it preempts state dealer acts; groups include 8 Rejected Dealers and several Interested Dealers; arbitrations issued written determinations, not awards; the court consolidated multiple cases and denied oral argument, then issued rulings on remedies, preemption, and enforcement; several motions remain regarding LOIs and compliance with state dealer acts; the court scheduled a status conference for remaining claims.
- Livonia, Village, Fox Hills, Boucher, Jim Marsh, Spitzer, BGR, and Sowell (Rejected Dealers) had Old Chrysler sales agreements rejected and won 747 arbitrations with New Chrysler; others (Interested Dealers) oppose new dealers/locations under state acts.
- The arbitration outcomes produced LOIs rather than reinstatement or damages, prompting disputes over whether LOIs satisfy 747 and whether state acts coexist or are preempted.
- The court addressed dispositive motions and intervenor government arguments regarding constitutionality; the March 27, 2012 Opinion laid the groundwork, with subsequent orders narrowing remaining issues to LOI conformity and potential further proceedings.
- The decision ultimately holds that 747 provides a sole remedy of a customary LOI, does not permit reinstatement or damages, does not authorize judicial confirmation or FAA/AAA enforcement, and does not preempt state dealer acts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Remedy under Section 747 for prevailing dealers | Livonia et al. contend 747 reinstates them; seeks reinstatement | New Chrysler argues LOI is sole remedy, not reinstatement | Sole remedy is a customary LOI; no reinstatement. |
| Authority to reinstate vs. add to dealer network | Rejected Dealers seek reinstatement to pre-bankruptcy status | New Chrysler not bound to reinstate; 747 limited to adding to network via LOI | No reinstatement; only addition via LOI. |
| Monetary damages or enforcement of arbitration | Some seek damages for 747 violations | 747(e) bars damages; no enforcement/confirmation under FAA/AAA | 747 does not authorize monetary damages or arbitration enforcement. |
| Preemption of state dealer acts by Section 747 | Section 747 preempts state dealer acts to reinstate dealers | State acts remain applicable; 747 not preemptive | 747 does not preempt state dealer acts. |
Key Cases Cited
- United States v. Parrett, 530 F.3d 422 (6th Cir. 2008) (used for statutory interpretation and legislative history)
- In re City of Memphis, 293 F.3d 345 (6th Cir. 2002) (controlling question of law; standard for 1292(b))
- Wyeth v. Levine, 555 U.S. 555 (U.S. 2009) (Congressional purpose governs preemption analysis)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (U.S. 1985) (FAA applicability based on consent to arbitration)
- INS v. Cardoza-Fonseca, 480 U.S. 421 (U.S. 1987) (statutory interpretation and legislative history caution)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard; distinguish facts from law)
- Deutsche Bank Nat’l Trust Co. v. Tucker, 621 F.3d 460 (6th Cir. 2010) (statutory interpretation; plain meaning governs)
- Millsaps v. Thompson, 259 F.3d 535 (6th Cir. 2001) (statutory preemption reasoning guidance)
- Hines v. Davidowitz, 312 U.S. 52 (U.S. 1941) (preemption principles; field vs. conflict)
- Ohio Mfrs. Ass’n v. City of Akron, 801 F.2d 824 (6th Cir. 1986) (conflict preemption framework)
- Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132 (U.S. 1963) (preemption principles; obstacle to federal objectives)
- Lombardi, Inc. v. Smithfield, 11 A.3d 1180 (Del. 1989) (example of independent authority citation)