CopyCited 14 times | Published | Supreme Court of Georgia | Oct 15, 2012 | 733 S.E.2d 269, 2012 Fulton County D. Rep. 3121
...mias, Justice.
We granted certiorari to decide whether, in WMW, Inc. v. American Honda Motor Co.,
311 Ga.App. 1 (714 SE2d 689) (2011), the Court of Appeals correctly construed the standing requirement for a motor vehicle dealership to sue under OCGA §
10-1-664, the anti-encroachment provision of the Georgia Motor Vehicle Franchise Practices Act, Ga....
...Because the new dealership that appellees American Honda Motor Company, Inc. (Honda) and Sobh Automotive of Cumming, Inc. (Sobh) planned to establish in Cumming was beyond WMW’s relevant market area, WMW lacks standing to sue to block the new competitor under OCGA §
10-1-664....
...WMW sued Honda and Sobh under the anti-encroachment provision of the Franchise Practices Act, which authorizes an existing dealership to file suit to prevent its franchisor from establishing a new or relocated dealership within the existing dealership’s “relevant *684market area.” OCGA §
10-1-664 (b)....
...1993, p. 1586, § 1. The Act balances the public interest in “full and fair competition among dealers and others” against the need to maintain “strong and sound dealerships.” OCGA §
10-1-621 (3), (4). The Act’s anti-encroachment provision, OCGA §
10-1-664, which authorizes dealerships to file suit if their franchisors attempt to establish or relocate another dealership in the same area, is part of this balance between competition and protection of existing motor vehicle dealers.4
*687OCGA §
10-1-664 provides in relevant part as follows:
(a) Any franchisor which intends to establish a new dealership or to relocate a current dealership for a particular line-make motor vehicle within the relevant market area of an existing dealership o...
...ip is necessary to provide the public with reliable and convenient sales and service within the relevant market area. . . .
Two terms that the Act specifically defines — “dealership” and “relevant market area” — appear repeatedly in OCGA §
10-1-664 and thus are essential to understanding the operation of the anti-encroachment provision....
...existing dealership.” OCGA §
10-1-622 (13.1). And for corporations and other business organizations, “dealership” is defined simply as the “dealer,” OCGA §
10-1-622 (2) (A), so that term is also important in determining the scope of OCGA §
10-1-664.
The Act defines “dealer” in two different ways....
...ership performs repairs (or engages in other corporate activities), because those activities are not what make a car-selling dealer a dealership under the Act.
(c) Other terms of the anti-encroachment provision reinforce this conclusion. Under OCGA §
10-1-664 (b), a franchisor may only establish a new or relocated dealership within an existing dealership’s relevant market area if the franchisor proves, with respect to that relevant market area, both that “the existing dealership is not providing adequate representation” of the franchisor’s line-make vehicles, and that the additional dealership is “necessary to provide the public with reliable and convenient sales and service” within the market area. OCGA §
10-1-664 (b)....
...competing interpretations. Assume that Atlanta Cars has three separate facilities —a corporate headquarters in downtown Atlanta and two dealership facilities in outlying suburbs where it sells new cars. According to WMW and the dissent below, OCGA §
10-1-664 (b) gives a corporate dealer standing anywhere the corporation exists, even if it does not market cars or repair services in those places....
...There is no reason to think that the anti-encroachment provision protects one car-selling facility but not another (much less an administrative or management location over a car-selling location), as Honda’s argument and the majority opinion below require.
OCGA §
10-1-664 (b) also directs courts to 11 factors to consider in making the two-fold determination of franchisor representation and public service required to deny an injunction against a new dealership to an existing dealership with standing....
...ace or places where a car-selling dealer like WMW sells cars. For example, factor six is the “[distance, travel time, traffic patterns, and accessibility between the existing dealership . . . and the location of the proposed... dealership.” OCGA §
10-1-664 (b) (6)....
...the existing dealership,” and factor three concerns “[t]he reasonably expected market penetration of the line-make motor vehicle for the relevant market area involved, after consideration of” specified factors, with a catch-all for any “other factors affecting sales to consumers in the relevant market area.” OCGA §
10-1-664 (b) (1), (3). Factor nine asks “[w]hether there is adequate interbrand and *691intrabrand competition with respect to the line-make motor vehicles.” OCGA §
10-1-664 (b) (9). And factor ten focuses on “economic and market conditions pertinent to dealerships competing in the relevant market area, including anticipated changes.” OCGA §
10-1-664 (b) (10)....
...Accordingly, WMW’s protected “relevant market area” is the eight-mile radius around its Roswell new car sales location, which does not include the proposed site for Honda’s new dealership in Cumming. Because the new dealership is outside WMW’s relevant market area, WMW lacks standing under OCGA §
10-1-664 to sue to prohibit the new dealership.
4....
...ore evident.
Indeed, if a corporate (or individual) dealership’s location, in calculating its “relevant market area,” includes all places where the dealer has a business asset, it often would be impossible for a franchisor to comply with OCGA §
10-1-664 (a), which requires that notice of a proposed new dealership be sent “by certified mail or statutory overnight delivery to [the] existing dealership.” Moreover, the notice must also include “[t]he specific location of the additional or relocated dealership; . . . [and] [t]he identity of all existing dealerships in whose relevant market area the new or relocated dealership is to be located.” OCGA §
10-1-664 (a) (1) and (3)....
...ship definition when doing so is contrary to the separate definition provided for corporate dealerships and produces an interpretation of “relevant market area” so contrary to the natural meaning of that phrase and the sensible operation of OCGA §
10-1-664 and other provisions of the Franchise Practices Act.
5....
...sales,” notably omits any reference to “service” or “repairs,” even though the statute uses the terms “sales” and “service” together in other places, including in the anti-encroachment provision. See, e.g., OCGA §§
10-1-623 (f),
10-1-664 (b)....
Published | Supreme Court of Georgia | Feb 17, 2026 | 733 S.E.2d 269, 2012 Fulton County D. Rep. 3121
...STATE OF GEORGIA et
al.
COLVIN, Justice.
This case concerns the constitutionality of two provisions of the
Georgia Motor Vehicle Franchise Practices Act, OCGA §
10-1-620 et
seq. The first of these provisions, OCGA §
10-1-664.1(c), generally
requires manufacturers to sell their new motor vehicles through a
new motor vehicle dealer (specifically, a dealer with a franchise for
such vehicles)....
...It provides that “no manufacturer or franchisor shall
offer to sell or sell, directly or indirectly, any new motor vehicle to a
consumer in this state, except through a new motor vehicle dealer
holding a franchise for the line make covering such new motor
vehicle.” OCGA §
10-1-664.1(c). The second of these provisions,
OCGA §
10-1-664.1(a), generally prohibits manufacturers and their
affiliated entities from owning or operating a new motor vehicle
dealer, providing that, as a general matter, it is “unlawful for any
manufacturer … or any … affiliate … of a ma...
...). And the Motor Vehicle
Fair Practices Act restricts who may obtain a dealer license by
10
restricting who may own or operate a “dealer”11 or “dealership”12 in
the state.
As relevant here, OCGA §
10-1-664.1(a) — the first component
of the Direct Sales Prohibition — generally prohibits manufacturers
and affiliated entities from owning or operating a dealer or
dealership, providing that, subject to certain exceptions, “[i]t shall
b...
...resentative of a
manufacturer … to own, operate, or control, directly or indirectly,
more than a 45 percent interest in a dealer or dealership in this
state.”
As noted above, the other component of the Direct Sales
Prohibition is OCGA §
10-1-664.1(c), which provides that, as a
general matter, “no manufacturer or franchisor shall offer to sell or
11 See OCGA §
10-1-622(1) (“‘Dealer’ means any person engaged in the
business of selling, offering to sell, solicitin...
...nsumer in
this state, except through a new motor vehicle dealer holding a
franchise for the line make covering such new motor vehicle.” By its
plain terms, this provision only regulates the sale to consumers of
“new motor vehicle[s].” OCGA §
10-1-664.1(c). And, as explained
below, because the statutory definition of that term has changed
over the years, so too has the effect of OCGA §
10-1-664.1(c).
Prior to a 2015 amendment, the Motor Vehicle Franchise
Practices Act defined “[n]ew motor vehicle” as “a motor vehicle
which has been sold to a dealer and on which the original motor
vehicle title has not been issued.” OCGA §
10-1-622(11) (2010)....
...icle on which the original
motor vehicle title has not been issued.” OCGA §
10-1-622(11). See
Ga. L. 2015, Act 159, § 1.
The change to the statutory definition of “new motor vehicle”
had a significant impact on the operation of OCGA §
10-1-664.1(c).
12
Prior to the 2015 amendment, when “new motor vehicle” was defined
as including only new vehicles that had been sold to a dealer, the
plain language of OCGA §
10-1-664.1(c) did not require
manufacturers to sell new motor vehicles through independent
franchised dealers....
...ch
has been sold to a dealer and on which the original motor vehicle
title has not been issued] to a consumer in this state, except through
a new motor vehicle dealer holding a franchise for the line make
covering such new motor vehicle.” OCGA §
10-1-664.1(c). After the
2015 amendment redefined “new motor vehicle” more broadly as any
motor vehicle without an issued title, however, the plain language
of OCGA §
10-1-664.1(c) applied differently, prohibiting
manufacturers from selling new motor vehicles directly to
consumers and requiring that manufacturers instead sell new motor
vehicles through independent franchised dealers. Specifically,
13
OCGA §
10-1-664.1(c) now provides that manufacturers cannot
“offer to sell or sell, directly or indirectly, any new motor vehicle [i.e.,
a motor vehicle on which the original motor vehicle title has not been
issued] to a consumer in this state, exce...
...consumers without using independent franchised dealers as
intermediaries — obtained a dealer license to sell new motor
vehicles directly to customers in Georgia. As further alleged in the
amended complaint, once the General Assembly redefined “new
motor vehicle” in 2015, OCGA §
10-1-664.1(c) would have prohibited
Tesla from selling new vehicles in the state directly to customers
without utilizing a franchised dealer as an intermediary. But the
same amendment that redefined “new motor vehicle” also added a
14
new provision to OCGA §
10-1-664.1 that created an exception to the
Direct Sales Prohibition for a limited class of electric motor vehicle
manufacturers who were operating dealerships in the state as of
January 1, 2015 — a class that (as appears undisputed on appeal)
includes, and could only ever include, Tesla. Specifically, the 2015
amendment added a new subsection — OCGA §
10-1-664.1(a)(8) —
which provides that OCGA §
10-1-664.1(a) “shall not be construed to
prohibit”:
The ownership, operation, or control by a manufacturer of
not more than five locations licensed as new motor vehicle
dealerships for the sale of new motor vehicles and any...
...entity controlled by such franchisor, or sold or
transferred a controlling interest in such
15
manufacturer to a franchisor or subsidiary or other
entity controlled by such franchisor.
OCGA §
10-1-664.1(a)(8); Ga....
...law with uniform operation throughout the state.19 First, the Direct
Sales Prohibition is a general law because the classifications it
draws are reasonable and relevant to the purpose of the legislation
19 As noted above, the portions of OCGA §
10-1-664.1(a) and (c) that
constitute the Direct Sales Prohibition and that Lucid challenges in this case
generally prohibit manufacturers and franchisors from selling new motor
vehicles directly to consumers in the state and prohibit manufacturers and
franchisors from owning, operating, or controlling a dealer or dealership. We
express no opinion about other portions of OCGA §
10-1-664.1(a) and (c).
39
at issue. Specifically, the classifications that are the subject of
OCGA §
10-1-664.1(a) and (c) are “manufacturer[s]” and
“franchisor[s].”20 The Direct Sales Prohibition therefore applies to
broad categories of entities that “are distinguished by
characteristi...
...own a new motor vehicle dealer or dealership and who may sell new
motor vehicles in the state to customers. Thus, the Direct Sales
Prohibition is a “general” law, not a “special” one.
Second, as the trial court correctly concluded, the Direct Sales
20 OCGA §
10-1-664.1(a) also includes a catchall phrase that applies to
certain entities or persons affiliated with a manufacturer or franchisor. See
OCGA §
10-1-664.1(a) (providing that it applies to “any manufacturer or
franchisor or any parent, affiliate, wholly or partially owned subsidiary, officer,
or representative of a manufacturer or franchisor” (emphasis added))....
...scope of its
provisions.” Zarate-Martinez,
299 Ga. at 311 (quotation marks
omitted). The plain language of the Direct Sales Prohibition applies
to any “manufacturer or franchisor” in the state. Specifically, the
challenged portion of OCGA §
10-1-664.1(a) applies equally to “any
manufacturer or franchisor” in the state, prohibiting such entities
from “own[ing], operat[ing], or control[ling] … more than a 45
percent interest in a dealer or dealership in this state.” And the
challenged portion of OCGA §
10-1-664.1(c) likewise applies equally
to any “manufacturer” or “franchisor” in the state, prohibiting such
entities from “sell[ing] … any new motor vehicle to a consumer in
this state, except through a new motor vehicle dealer hold...
...Sales Prohibition is a
general law, not a special law. Ga. Const. of 1983, Art. III, Sec. VI, Par. IV(a)
(emphasis added).
42
(c) Lucid argues that it has stated a claim under Paragraph IV
based on OCGA §
10-1-664.1(a)(8), which, as described above,
permits a limited class of electric vehicle manufacturers who were
operating dealerships in the state as of January 1, 2015, to sell their
vehicles directly to consumers in Georgia without using a franchised
dealer as an intermediary....
...also contends that the 2015 amendment (Ga. L. 2015, Act 159),
which simultaneously created the Direct Sales Prohibition and the
exception for Tesla, was invalid “special legislation.” As explained
below, the trial court correctly dismissed Lucid’s challenge to OCGA
§
10-1-664.1(a)(8) but failed to adequately consider whether Lucid
had stated a Paragraph IV claim challenging the 2015 amendment.
To the extent that Lucid claims that OCGA §
10-1-664.1(a)(8)
is a special law that violates Paragraph IV, Lucid lacks
43
constitutional standing to raise the claim....
...s been
violated, but it is enforcement of the Direct Sales Prohibition (which
prohibits manufacturers and their affiliates from selling new motor
vehicles directly to consumers in the state) that is the source of that
asserted legal injury. OCGA §
10-1-664.1(a)(8), which is an
exception to the Direct Sales Prohibition that does not apply to
Lucid, has no impact on Lucid’s asserted right to sell new vehicles
directly to consumers in the state. And Lucid has not identified any
other infringement of an asserted legal right of Lucid’s that results
from enforcement of OCGA §
10-1-664.1(a)(8)’s alleged
unconstitutional feature....
...an infringement upon his right of person or property, and that such
infringement results from the unconstitutional feature of the statute
upon which he bases his attack” (quotation marks omitted)).
Accordingly, Lucid lacks standing to challenge the constitutionality
of OCGA §
10-1-664.1(a)(8) by itself....
...By contrast, Lucid has constitutional standing to challenge the
enforcement of the 2015 amendment to the Motor Vehicle Franchise
Practices Act, Ga. L. 2015, Act 159. As explained above, that
22 We express no opinion about whether OCGA §
10-1-664.1(a)(8) may be
relevant to Lucid’s claims that the Direct Sales Prohibition violates Lucid’s
rights under the Equal Protection and Due Process Clauses, should the trial
court reach that question after further considering whether Para...
...tion of Paragraph
IV(c).
Accordingly, although we affirm the trial court’s dismissal of
Lucid’s Paragraph IV claim to the extent that Lucid directly and
separately challenged enforcement of the Direct Sales Prohibition
codified in OCGA §
10-1-664.1(a) and (c) and the exception for Tesla
codified in OCGA §
10-1-664.1(a)(8), we vacate the trial court’s
dismissal of Lucid’s Paragraph IV claim to the extent that Lucid
47
challenged the enforcement of the 2015 amendment (Ga....
