Subaru of America, Inc. v. Board of the Texas Department of Motor Vehicles; Daniel Avitia, in His Official Capacity as Executive Director of the Texas Department of Motor Vehicles; And McAllen Jeep, Inc. D/B/A Bert Ogden Subaru
03-23-00415-CV
| Tex. App. | Jul 18, 2025Background
- Subaru of America, Inc. sought to terminate its franchise agreement with Bert Ogden Subaru (McAllen Jeep, Inc.), the only Subaru dealer in the Rio Grande Valley since 2009.
- Subaru alleged Bert Ogden consistently failed to meet sales targets, ranked low in comparative customer satisfaction, and had operational deficiencies, including inadequate service personnel and parts inventory.
- Bert Ogden protested the termination to the Texas Department of Motor Vehicles Board, leading to an administrative hearing before ALJs.
- The ALJs found in favor of Subaru, recommending termination, but the Board rejected some of their conclusions, emphasizing actual customer satisfaction scores and public harm if the dealership was terminated.
- The Board ultimately decided Subaru did not show good cause for termination, granting Bert Ogden’s protest; Subaru appealed.
Issues
| Issue | Plaintiff's Argument (Subaru) | Defendant's Argument (Bert Ogden/Board) | Held |
|---|---|---|---|
| Public interest/good cause factor | Low sales and customer satisfaction rankings warrant termination | Actual scores are strong; termination harms public access | Board reasonably found public injury weighed against termination |
| Adequacy of service facilities/personnel | Operational deficiencies warrant termination | Facilities are adequate; shared personnel suffices | Board found factor neutral; lack of exclusivity not dispositive |
| Authority to reject ALJ's conclusions | Board improperly reweighed evidence/made new findings | Board can reweigh and use industry expertise for legal conclusions | Board within its discretion; APA and precedent followed |
| Speculativeness of replacement dealer | Intent to quickly install new dealer weighs for termination | Hypothetical benefits unsupported by actual evidence | Board reasonably discounted speculative benefit |
Key Cases Cited
- Hyundai Motor Am. v. New World Car Nissan, Inc., 581 S.W.3d 831 (Tex. App.—Austin 2019) (Board discretion in weighing statutory factors; APA limits on overriding ALJ fact-finding)
- Austin Chevrolet, Inc. v. Motor Vehicle Bd. & Motor Vehicle Div. of Tex. Dep’t of Transp., 212 S.W.3d 425 (Tex. App.—Austin 2006) (Board has exclusive jurisdiction and significant deference in good cause determinations)
- Meier Infiniti Co. v. Motor Vehicle Bd., 918 S.W.2d 95 (Tex. App.—Austin 1996) (Board determines weight given to statutory factors in franchise termination)