Republic Industries Sues Toyota for Unfair Trade Practices
12 August 1997
Republic Industries Sues Toyota for Unfair, Deceptive Trade Practices; Washington State Dealer Says Toyota is Interfering in Sale to Republic
FORT LAUDERDALE, Fla., Aug. 12 -- Republic Industries, Inc.
today announced that it has filed suit in Alabama charging Toyota
Motor Sales USA with unfair and deceptive trade practices. The lawsuit
relates to Republic's proposed acquisition of one Lexus and two Toyota
dealerships in Alabama from the Dobbs Automotive Group.
Also today, Appleway Toyota of Spokane, Washington filed a complaint with
the Washington State Department of Motor Vehicles charging that Toyota is
interfering illegally in the proposed sale of Appleway to Republic.
In the Alabama suit, Republic complains that Toyota has unilaterally
implemented internal policies that interfere with the Dobbs' lawful right to
sell their dealerships to Republic. The suit says that Toyota's policies
constitute "unfair and deceptive" trade practices. The suit asks the court to
issue an injunction preventing Toyota from using its policies to interfere
with the proposed acquisition and award compensatory and punitive damages.
The suit points out that Alabama law prohibits a manufacturer from
unreasonably withholding its approval of the transfer of a dealership
franchise, unless the manufacturer demonstrates that the buyer is of "poor
moral character" or lacks the funds necessary to effect the transaction --
conditions which Republic easily meets. Republic points out in its suit that
it is a company with over $2.7 billion in shareholders' equity and Toyota has
admitted in other court proceedings that it does not consider Republic to be
of "poor moral character."
In the Washington action, Appleway says Toyota has illegally interfered
with the sale of its dealership to Republic by unilaterally imposing internal
policies that restrict qualified buyers like Republic from purchasing Toyota
dealerships. These policies limit Republic to acquiring seven Toyota
dealerships nationally over a five-year period and require Republic to waive
forever its legal rights to own additional dealerships.
Steven R. Berrard, President and Co-Chief Executive Officer of Republic
Industries, said, "We cannot understand why Toyota is trying to harm its
dealers by restricting them from selling to qualified buyers. Toyota's
arbitrary policies rob small businessmen from realizing what they have worked
so hard to achieve. These policies strike at the very heart of American
values.
"Knowing full well that the law favors us, Toyota insists that Republic
adhere to its policies and waive our legal rights as a condition to approving
any acquisition made by us. They believe that somehow their arbitrary
policies supersede state franchise laws in the United States-laws which
protect consumers, dealers and qualified buyers like Republic.
"Contrary to what Toyota has implied, Republic is seeking approval for
owning only a minimal number of Toyota's more than 1,300 dealerships.
Currently, Toyota has approved our ownership of one Toyota and one Lexus
store.
"Republic's strategy is to give consumers good value and the finest
automotive experience. Our dealer partners consist of some of the most
experienced and respected automotive retailers in the world. Together, we are
enhancing our dealers' success with expanded capital and by sharing best
retail practices with one another. We intend to build Toyota's brands and at
the same time deliver outstanding customer satisfaction."
Republic Industries, Inc. operates subsidiaries in the automotive
retailing, automotive rental, automotive financial services, solid waste
services, and electronic security services industries. The company owns the
nation's largest chain of new vehicle dealerships and is building a chain of
used car megastores which it operates under the AutoNation USA brand name.
Republic also owns National Car Rental System, Inc., Alamo Rent-a-Car, Inc.,
Spirit Rent-A-Car, Inc., Value Rent-A-Car, Inc., and Snappy Car Rental, Inc.,
and has made an offer to acquire all of the shares of EuroDollar
Rent-A-Car, plc.
SOURCE Republic Industries, Inc.