23 Former State Attorneys General Announce Support for Republic Industries in Legal Disputes with Toyota, Honda
21 August 1997
23 Former State Attorneys General Announce Support for Republic Industries in Legal Disputes with Toyota, Honda
- State Franchise Laws are on Republic's Side -
NEW YORK, Aug. 21 -- An unprecedented gathering of 23 former
state Attorneys General from across America, experts in state law, state
regulatory process and consumer enforcement, today issued an opinion
supporting Republic Industries' right to acquire Toyota
and Honda dealerships. The report concludes that
state franchise laws generally support an automotive dealer's right to sell
his or her business to a qualified buyer and that Republic is a qualified
buyer and its program is pro-consumer.
With 108 dealers and 20 makes of cars, Republic Industries is the largest
automotive retailer in the United States. Toyota has sued Republic in several
states, and Honda has sued Republic in federal court in an effort to block
Republic from acquiring additional Toyota and Honda dealerships. Rather than
waiting to be sued, Republic has initiated actions in several states seeking
declaratory judgments concerning its right to acquire Toyota dealerships.
Speaking on behalf of the group, Neil F. Hartigan, former Illinois
Attorney General, said, "The state franchise laws that Attorneys General
interpret were designed to protect consumers and dealers from overreaching
auto manufacturers. Car dealers have the right to sell their businesses to a
qualified buyer; Republic is a very qualified buyer; and therefore Republic
has the right to acquire dealerships." Mr. Hartigan is a partner with the
Chicago law firm McDermott, Will & Emery.
"In our collective opinion, the bottom line is: Toyota and Honda don't
have the legal right to unreasonably block dealership transfers to a qualified
buyer such as Republic," added Hartigan.
"The franchise laws enacted in states throughout the country protect auto
dealers from unfair trade practices by giving them the right to sell their
businesses to qualified buyers," said Robert Abrams, former New York Attorney
General, who is now a partner with Stroock & Stroock & Lavan in New York.
"Mega-billion dollar manufacturers like Toyota and Honda have tremendous
bargaining power. State franchise laws are supposed to help level the playing
field and protect the rights of individual dealers," said W.J. Michael Cody,
former Tennessee Attorney General and now a partner in Burch, Porter &
Johnson.
"There's no question Republic is a qualified buyer of automotive
dealerships," said former Pennsylvania Attorney General LeRoy Zimmerman, now a
partner with Eckert Seamans Cherin & Mellott. "The company's strategy has been
to build a management team from the acquired dealerships and from within the
auto industry. In fact, many managers in Republic's automotive operations
have more than 20 years of auto industry experience."
As an example, Zimmerman cited Michael Maroone, president of Republic's
New Car Division. Before joining Republic, Maroone built a major dealership
organization into a group including the number four General Motors dealer in
the world, the number three Dodge dealer in the world and the number one Isuzu
dealer in the U.S and has been both Time Magazine's "Quality Dealer of the
Year" and the recipient of Ford Motor Company's prestigious "Chairman's
Award."
In fact, when Maroone joined Republic, Donald Keithly, partner at J.D.
Power and Associates commented: "The Maroone thing is huge, absolutely huge.
He's a great dealer. He's of an age he can become the Ray Kroc of his
generation."
In field operations, Republic also includes such auto industry notables as
Lou Grubb of Grubb Automotive in Phoenix, Ariz.; Ed Mullinax of Mullinax Ford
of Ohio and Florida; and Steve Kalafer of Flemington Car & Truck in New
Jersey.
"In our experience, consumers file more complaints about automotive issues
than any other subject," said former Indiana Attorney General Pam Carter, now
a partner with the law firm of Johnson, Smith, Pence, Densborn, Wright &
Heath. "By offering more customer choice and improving customer service,
Republic and its dealers can make car-buying less painful and more satisfying
for consumers," Carter added.
Commenting on the opinion, Republic Chairman and Co-CEO Wayne Huizenga
said, "We felt we were right, but wanted to get an independent opinion from
experts in state law. With this legal opinion we hope to get beyond the legal
disputes with Toyota and Honda and get back to business. Republic will offer
significant benefits to consumers. If we can improve the system and create
customers for life, everybody wins -- including Toyota and Honda."
Republic Industries President and Co-CEO Steve Berrard said, "We hope
that Toyota and Honda will join with us to improve the car-buying and
ownership experience for consumers instead of battling to preserve an
expensive, outmoded selling system that leaves too many customers feeling
unsatisfied. It's time for a change, and we want to be constructive partners
in that process."
Former attorneys general contributing to the opinion include (listed
alphabetically by state): Don Siegelman, Alabama; Duane Woodard, Colorado;
Charles M. Oberly III, Delaware; Jim Jones, Idaho; Neil F. Hartigan, Illinois;
Pamela F. Carter, Indiana; Robert T. Stephan, Kansas; Frederic J. Cowan,
Kentucky; Francis X. Bellotti, Massachusetts; Mike Greely, Montana; Paul
Bardacke, New Mexico; Robert J. Del Tufo, New Jersey; Robert Abrams, New
York; Anthony J. Celebrezze, Jr., Ohio; Michael C. Terpin, Oklahoma; LeRoy
S. Zimmerman, Pennsylvania; James E. O'Neil, Rhode Island; T. Travis
Medlock, South Carolina; W.J. Michael Cody, Tennessee; R. Paul Van Dam, Utah;
M. Jerome Diamond, Vermont; Andrew P. Miller, Virginia; Joseph B. Meyer,
Wyoming.
SOURCE Republic Industries