Boardman Law Firm

Highlights From The Legal History Of The Wisconsin Automobile & Truck Dealers Association
(1928-2003)

by Paul Norman and Gary Antoniewicz

1928	-	Wisconsin Automotive Trades Association is formed.
1935	-	First provisions of the Wisconsin Motor Vehicle Dealer Law (“WMVDL”) are enacted. Dealers are required to be licensed by the state banking commission. Manufacturers are prohibited from coercing dealers to assign retail installment contracts to captive finance companies.
1937	-	WMVDL amended to prohibit manufacturers from (a) unfairly canceling a dealer’s franchise agreement without just provocation and due regard to the dealer’s equities; (b) coercing dealers to accept vehicles, parts and other commodities that the dealer has not ordered; or (c) coercing dealers to enter into agreements or to do any other act unfair to the dealer through threat of cancellation.
1943	-	State motor vehicle department (now Department of Transportation) made co-licensor with the state banking commission (now Department of Financial Institutions - Banking Division) of dealers and manufacturers under the WMVDL.
1945	-	WMVDL amended to extend unfair franchise cancellation protections to nonrenewals of franchise agreements.
1955	-	WMVDL amended to prohibit manufacturers from owning dealerships in communities where its presently enfranchised dealers were providing adequate representation.
1955	-	Kuhl Motor Co. v. Ford Motor Co.: After reconsideration in which one Justice changes sides, the Wisconsin Supreme Court rules 4-3 that the WMVDL’s prohibition against unfair cancellations of dealer franchise agreements is a constitutional exercise of the Wisconsin legislature’s police powers and that, therefore, such cancellations are invalid as against the public policy of the state.
1956	-	Federal “Automobile Dealers Day in Court Act”” is enacted. Gives dealers the right to sue manufacturers for damages caused by their failure to act in good faith in performing under or complying with a franchise agreement.
1957	-	Bushing and deceptive advertising provisions added to the WMVDL.
1958	-	Federal “Monroney” Act passed. Requires manufacturers to affix MSRP label to each new vehicle delivered to a dealer.
1959	-	WMVDL amended to recognize the use of independent distributors to distribute vehicles to dealers and to protect dealers from loss of franchise rights upon a change in the distributors for a line make.
1959	-	Sunday closing law enacted. Prohibits dealers from selling vehicles on Sundays.
1963	-	Five percent penalty statute enacted. Limits the amount that customers can be penalized for failure to accept delivery of a vehicle to five percent of the purchase price.
1965	-	Forest Home Dodge, Inc. v. Karns: Wisconsin Supreme Court rejects manufacturer’s arguments that WMVDL is invalid as an improper delegation of legislative authority or as being unconstitutionally vague.
1965	-	Uniform Commercial Code becomes law in Wisconsin. Affects dealers’ sales agreements and financing arrangements.
1966	-	United States v. General Motors Corp.: U.S. Supreme Court holds that an agreement between manufacturer and California dealer associations to prevent sales of new motor vehicles to brokers violates the antitrust laws.
1968	-	Federal Truth-In-Lending Act becomes law.
1969	-	WMVDL amended to guarantee continuation of franchise agreements while complaints of unfair cancellation are pending and to give dealers cause of action for attorney fees if they prevail on such complaints.
1971	-	Nagle Motors, Inc. v. Volkswagen N.C. Distributors, Inc.: Wisconsin Supreme Court holds that WMVDL requires manufacturers and distributors to be just and fair in the termination of a franchise agreement.
1971	-	Wisconsin Consumer Act becomes law.
1973	-	MVD 24 (now Trans 139) is promulgated by the Wisconsin Department of Transportation (“DOT”). Regulates dealer advertising, new and used vehicle disclosures, motor vehicle purchase contract terms and disclosures, warranties and, initially, repair transactions.
1974	-	Dane County Circuit Court rules that DOT’s rule governing only licensed motor vehicle dealer repair transactions are beyond its statutory authority. Wisconsin Department of Agriculture, Trade and Consumer Protection later adopts repair rule (ATCP 134) that covers all repair facilities in the state.
1975	-	Federal Magnuson-Moss Warranty Act becomes law.
1976	-	“Family successor rights” bill becomes law. Permits “designated family members” of a deceased or disabled dealer to succeed to the ownership and operation of a dealership under its existing franchise agreement unless the manufacturer can show good cause why the ownership and operation should not be permitted.
1976	-	Federal Truth In Leasing Act becomes law.
1977	-	Transportation Commission created to hear and decide franchise and licensing disputes under WMVDL.
1978	-	New Motor Vehicle Bd. of Calif. v. Orrin W. Fox: U.S. Supreme Court holds that “relevant market area” laws giving dealers the right to protest the establishment of another dealership of the same line make are constitutional.
1978	-	Warranty labor rate statute enacted. WMVDL amended to require that manufacturer’s compensate dealers for warranty work at a labor rate equal to the dealer’s effective retail labor rate.
1982	-	MVD 24 (now Trans 139) amended to clarify manufacturers’’ warranty labor rate obligations.
1982	-	Relevant market law becomes law after legislature overrides Governor’s veto. Gives dealers the right to protest the establishment or relocation of another dealership of the same line make within their relevant market areas.
1983	-	Doucas decision: Wisconsin Supreme Court holds that dealer may not refuse to perform under a motor vehicle purchase contract containing an unintentional, good faith mistake in the price that is unfavorable to the dealer.
1983	-	MVD 24 changed to Trans 139.
1984	-	WMVDL amended to allow dealers to file $25,000 bond in lieu of financial statements open for inspection by the public. $25,000 bond later made mandatory.
1984	-	Southland Corp. V. Keating: U.S. Supreme Court rules that Federal Arbitration Act preempts state franchise laws prohibiting dealers from being required to arbitrate certain disputes.
1986	-	“Lemon Law” enacted.
1987	-	Ford Motor Co. v. Lyons: Wisconsin Court of Appeals rules that licensees may sue under the WMVDL only for damages within the scope of their license.
1988	-	WMVDL amended to prohibit contractual waivers of dealers’ rights and compulsory arbitration.
1989	-	Bob Willow Motors, Inc. v. General Motors Corp.: U.S. Court of Appeals for the Seventh Circuit holds that “unconscionable practices” provision of the WMVDL applies to manufacturers, as well as dealers and finance companies.
1990	-	WMVDL amended to compel manufacturers to buy back new vehicles, parts, tools, signs, etc. upon termination of a franchise agreement and to give dealers the right to protest modifications of franchise agreements.
1992	-	Motor vehicle adjustment program legislation becomes law.
1993	-	Comprehensive changes made to WMVDL relating to dealer changes, performance standards, prohibition of factory stores, dealer protests of parts and service outlets in their relevant market areas, damage to delivered vehicles, vehicle allocations, warranty parts reimbursement, promotional allowances, unfair cancellations, and mediation of franchise disputes. disputes.
1993	-	Responsibility for hearing and deciding franchise disputes and dealer licensing matters transferred to Division of Hearings and Appeals.
1996	-	Wisconsin Motor Vehicle Consumer Lease Law enacted. Lessors of vehicles to consumers required to be licensed as motor vehicle dealers.
1997	-	Comprehensive changes to Trans 139 made by DOT. Used vehicle window label changed to Wisconsin Buyers Guide.
1997	-	State Oil Co. v. Kahn: U.S. Supreme Court holds that manufacturers may impose maximum limits on prices charged by dealers without violating the antitrust laws.
1998	-	Chrysler Corp. v. Kolosso Auto Sales, Inc.: U.S. Court of Appeals for the Seventh Circuit rules that retroactive application of “dealer change” provisions of the WMVDL to franchise agreements existing prior to the enactment of such provisions does not violate the Contracts Clause.
2000	-	Amendments to WMVDL tightening its prohibitions against “factory stores” take effect.
2000	-	WMVDL renumbered.
2000	-	Ray Hutson Chevrolet, Inc. v. General Motors Corp.: U.S. Court of Appeals for the Seventh Circuit rules that dealers have no cause of action under the WMVDL for damages caused by manufacturer’s refusal to permit dealer change.
2001	-	WMVDL amended to give dealers cause of action for damages caused by manufacturer’s refusal to permit dealer change if “good cause” is first found to permit the change.
2002	-	Trans 139 amended to permit dealers to charge reasonable service fees in motor vehicle purchase and lease transactions.
2002	-	Federal Arbitration Act amended to provide that dealers may be required to submit a franchise dispute to binding arbitration only if they decide to do so after the dispute has arisen.
2003	-	Legislation introduced to amend WMVDL to prohibit contract provisions requiring dealers to sell dealership stock or assets to manufacturers and to waive their right to jury trial, to require manufacturers to offer to sell a dealer all models that are part of the line make for which the dealer is franchised and to prohibit manufacturers from performing, or permitting persons other than franchised dealers to perform, warranty service on vehicles that are not.
		© 2003 Boardman Law Firm