The owner of a Billings, Mont. auto dealership has asked the Montana attorney general's office to overturn a hearing examiner's recommendation that it not be authorized to re-open the Chrysler-Jeep franchise it lost during Chrysler's bankruptcy three years ago.
Rimrock Chrysler argues in documents filed late last month that hearing examiner Katherine Orr failed to give proper consideration to the public's interest in having a competing auto dealership in the largest city in the state.
Rimrock Chrysler lost its Chrysler and Jeep franchises while Underriner Motors lost its Jeep franchise under Chrysler's 2009 bankruptcy reorganization. Chrysler Group consolidated its lines and awarded the Chrysler and Jeep franchises to Lithia of Billings, which already had the Dodge franchise.
Rimrock appealed the loss of its franchises and won a federal arbitration in June 2010. However, a state law allows existing dealerships to protest the addition of a matching franchise in the same market.
The law says a new automobile franchise cannot be established in a community in which the same line-make is already represented, unless there is good cause for an additional franchised dealership and it is in the public interest.
"The hearing examiner ... ignored a lot of the evidence, apparently because she understood her role is to protect the 'existing' dealer," Rimrock attorney Robert Byerts wrote in an email to The Associated Press on Friday.
Byerts, of Bass Sox Mercer in Tallahassee, Fla., added that "protection for the dealers consists of the opportunity to contest the manufacturer's decision to add a dealership" and to protect the manufacturer from terminating the existing dealer without good cause.
"Lithia has received the requisite protection in the form of the hearing conducted in this matter," Byerts wrote in the exceptions it filed to Orr's ruling. The protection contemplated for the existing dealer "does not amount to protection from competition, but instead, consists of protection from substantial injury."
Byerts said during testimony given to the hearing examiner, Lithia of Billings General Manager Adam Britzius and Lithia Regional Manager Ken Wright said they believed Lithia of Billings would remain a viable dealership even if Rimrock was allowed to open its planned Chrysler-Jeep store.
The law says the amount of business transacted by other franchises of the same line in that community, the investments a franchise has made and whether the dealership provides adequate consumer care are among the "existing circumstances" that should be considered in determining whether there is "good cause" to allow an additional franchise.
Rimrock and Chrysler Group argue the "existing circumstances" also should include the level of competition in the market, customer choice and the potential for growth in the market.
Chrysler executives testified in April that Billings was not a large enough market to support a second dealership and there was no evidence Lithia was providing inadequate customer care.
Rimrock and Chrysler Group noted that the Billings market has six General Motors dealerships, five Ford dealerships and just one Chrysler dealership. They argue adding another dealership would increase competition for sales price and service as well as increased vehicle selection.
The attorney general's office is expected to make its final ruling by Oct. 12.
