Pub. 58 2017-2018 Issue 3

31 SPRING 2018 increased the average price paid by consumers for the popular Honda Accord by $500. See “The Price Effects of Intra-Brand Competition in the Automobile Industry: An Econometric Analysis” by T. Randolph Beard, PhD, George S. Ford, PhD, Lawrence J. Spiwak, Esq. (Phoenix Center Policy Paper Number 48) (March 2015). 18 Id . § 348.476(c). The statute incorporates exceptions to the prohibition in subsections (d), (g), (h), (h-1), (j). 19 An example of common franchise or sales and service agreement provisions: See General Motors LLC “Dealer Sales and Service Agreement 2015, Standard Provisions” which requires a franchisee to: have a facility that meets GM specifications (Article 4.4.3); be reasonably equipped to properly diagnose and service Products and obtain necessary equipment as determined by GM (Article 4.4.5); maintain an adequate and trained staff for sales and service (Article 5); purchase and stock necessary motor vehicles, parts, and accessory inventory (Article 6.4); perform pre-delivery inspections and adjustments, warranty and special policy repairs; perform field actions and corrections (Article 7); train personnel for product, sales, service, parts, accounting, business management, finance and insurance (Article 8); have a set minimum working capital (Article 10). 20 Id . § 348.002(8). The “dealership” definition was added in 1995 (Act of June 8, 1995, 74 th Leg., R.S., ch. 357, 1995 Tex. Gen. Laws 2887) (codified at § 1.03, Texas Motor Vehicle Commission Code (art. 4413(36) § 1.03(24) (Ver- non’s Texas Civil Statutes)): “Dealership” means the physical premises and business facilities on which a franchised dealer operates his business, including the sale and repair of motor vehicles. The term includes premises or facilities at which a person engages only in the repair of motor vehicles if repairs are performed pursuant to the terms of a franchise and a motor vehicle manufacturer’s warranty.” 21 Id . Act of June 8, 1995 (SB 1139) (codified at art. 4413(36) §5.02(b)(25) (Vernon’s Texas Civil Statutes)). 22 See 43 TAC § 215.113. 23 Id . Act of June 18, 1999, 76 th Leg. (H. B. 3092); (codified since 2001 at tex. occ. code ann. § 2301.476). 24 Id . 25 Act of May 18, 2001, 77 th Leg., R.S., ch. 155, 2001 Tex. Sess. Law Serv. 296 (codified at art. 4413(36) § 5.02(C)(e) (Vernon’s Texas Civil Statutes)). 26 Act of June 1, 2001, 77 th Leg., R.S., ch. 1421, § 5, 2001 Tex. Sess. Law Serv. 4642. 27 Act of June 20, 2003, 78 th Leg., R.S., ch. 503, 2003 Tex. Gen. Laws 1773. 28 Act of Sept. 1, 2008, 80 th Leg., R.S. ch. 105, 2007 Tex. Gen. Laws 114 (codified at tex. occ. code ann. §§ 2301.476 (j)-(o)). 29 Id . § 2301.476(0). 30 Id . § 2301.476(k). 31 Id . § 2301.476(1). 32 Proposal for Decision, Docket No. 00-0046-ENF, at 7. 33 Id . at 3 - 4. 34 Id . at 4 - 5. 35 Id . at 10. 36 Id . at 21. 37 Ford Motor Co. v. Texas DOT, et al., 106 F. Supp. 905 (District Court, Western District, Texas 2000). 38 Id . at 908-909, citing See , e.g., Defendant Bray’s Appendix to Response to Ford’s Motion for Summary Judgment, Exh. I (Transcript of hearing before the House Committee on Transportation on H.B. 3092, the precur- sor to § 5.02C). 39 Id . at 913. 40 Id . § 1.02 (Vernon’s Ann. Civ. St.); (codified at tex. occ. code ann. § 2301.001). 41 Ford Motor Co. v. Texas DOT, 264 F.3d 493 (5 th Cir. 2001). 42 Id . at 510. 43 See Footnote 9. In 1995, the Legislature defined “franchised dealer” and “nonfranchised dealer.” 44 Id . at § 2301.002(16). 45 International Truck & Engine Corporation v. Bray (372 F. 3d 717 (5th Cir. 2004)). 46 Id . at 728, citing Ford, 264 F.3d at 503 (quoting Lewis, 447 U.S. at 43). 47 Id . at 504. 48 Id . at § 2301.476(c)(3). 49 In addition to the warranty performance requirements in a dealer’s sales and service agreement, ( See Footnote 19 ), the State may request a manufacturer or distributor to pro- vide a copy of the requirements it imposes on its dealers with respect to duties under the manufacturer’s or distributor’s warranty and the vehicle preparation and delivery obliga- tions. ( Id . at § 2301.401(a)). 50 tex. bus. & com. code ann. § 2.313 (Vernon’s 2009). 51 Id . at § 2301.259(d). 52 15 U.S.C.S. § 2301-2312 (P. L. 93-637)(1975). 53 15 U.S.C.S. § 2301(6). 54 Id . at § 2310. 55 “USA Warranty and Maintenance” Atlas, Model Year 2018 at 3. 56 Id . at 4. 57 “Chevrolet Limited Warranty and Owner Assistance Information” at 1 (2017). 58 “ 2017 ESCAPE Owner’s Manual” at 218. 59 “ PACCAR Engine Limited Warranty Agreement” (CAT 8001) PACCAR MXWarranty, United States (Revi- sion 12/15). 60 senate comm. on economic development, bill analysis, Tex. S.B. 1141, 68 th Leg., R.S. (1983) [explaining new § 6.07 to art. 4413(36), (Vernon›s Texas Civil Statutes)]. 61 house comm. on transportation, bill analysis, Tex. C.S.S.B. 1141 68 th Leg., R.S. (1983). 62 Act of June 19, 1983, 68 th Leg., R.S., ch. 651, 1983 Tex. Sess. Law Serv. (codified at Vernon’s Ann. Civ. St., art. 4413(36) § 6.07). 63 Id . § 2301.602(a). 64 Id . 65 Id . at § 2301.605(c). 66 See §§ 2301.476 (c), (j) - (1). 67 Id . at § 2301.608(h). 68 An order issued by an Office of Administrative Hear - ings hearings examiner is a final order of the TxDMV. ( Id . at § 2301.704(c)). 69 See , tex. gov’t. code ann. § 311.023 (Vernon 2013). “In construing a statute, whether or not the statute is con- sidered ambiguous on its face, a court may consider among other matters the: (1) object sought to be attained; (2) circumstances under which the statute was enacted; (3) legislative history; (4) common law or former statutory provisions, including laws on the same or similar subjects; (5) consequences of a particular construction; (6) administrative construction of the statute; and (7) title (caption), preamble, and emergency provisions.” 70 The TxDMV reported that for Fiscal Year 2016: 450 complaints filed; 444 complaints closed; 211 settlements; and 91 repurchase/replacement orders. “FY2016 Lemon Law Annual Report,” Texas Department of Motor Vehicles, Enforcement Division. 71 A "franchise" means one or more contracts between a franchised dealer as franchisee and a manufacturer or distributor as franchiser, including a written communication from a franchiser to a franchisee in which a duty is imposed on the franchisee, under which: (A) the franchisee isgranted the right to selland service newmotorvehiclesmanufacturedor distributedby the franchiser oronly to service motorvehiclesunder thecontractandamanufacturer's warranty; ... " ( Id. § 2301.002(15)). 72 Id. § 2301.251. 73 In 1983, the Texas Motor Vehicle Commission Code was amended so that it was clear that no unlicensed person may engage in the business of buying, selling, or exchanging new motor vehicles without the appropriate license: "Section 5.04. SALE OF NEWMOTOR VEHICLES. No person may engage [represent to the public, by advertis - ing or other means that he is engaged] in the business of buying, selling, or exchanging new motor vehicles unless he holds a valid license issued by the Commission for the make or makes of new motor vehicles being bought, sold, or exchanged; or unless such person is acting as a bona fide employee or agent of the licensee; or unless such person is a second stage or allied equipment manufacturer modifying or converting new motor vehicles and offering them for sale with the original manufacturer's warranty unimpaired. In this section, the term 'engage in the business of buying, sell- ing, or exchanging new motor vehicles' means: (1 ) displaying for sale new motor vehicles on a lot or showroom: or (2) advertising for sale new motor vehicles; or (3) regularly or actively soliciting buyers for new motor vehicles." (Act of June 19, 1983, 68th Leg., R.S., ch. 651, § 6, 1983 Tex. Gen. Laws 4134, codified as art. 4413 (36) § 5.04, (Ver - non's Texas Civil Statutes)). In 1991, the language defining "engage in the business of buying, selling, or exchanging new motor vehicles" was repealed, and according to the State Representative Charles Finnel’s statement filed with the House Committee on Gov - ernment Organization, February 26, 1991: "This amendment removes language in current law relating to certain qualifica - tions as to who is 'engaged in the business' of operating as a motor vehicle dealer . Though the current law, with those listed qualifications, has been upheld by the courts, including the Supreme Court of the United States, still, inclusion of the listed qualifications continues to foment litigation. As long as those qualifications remain in the law, marginal operators will continue to try to thwart the intent of the legislature by operating as a dealer without a license. It was the decision of the subcommittee to eliminate any question as to who is 'engaged in the business of buying, selling' etc. new cars, and thus, we hope, allow our regulatory agency to do its job without further frivolous litigation." (Emphasis added.) (Act of June 16, 1991, 72nd Leg., R.S., ch. 501, 1991 Tex. Gen. Laws 1749). 74 Id . § 2301.002(8): "Dealership" means the physical premises and business facilities on which a franchised dealer operates the dealer's business, including the sale and repair of motor vehicles. The term includes premises or facilities at which a person engages only in the repair of a motor vehicle if the repair is performed under a franchise and a motor vehicle manufacturer's warranty. 75 43 TAC § 215.103. 76 See "The World's Most Expensive Cars for 2018" by Jim Gorzelany, December 28, 2017@ 12:56 p.m. https:// www.forbes.com/sites/jimgorzelany/2017/12/28/the-worlds- most-expensive-cars-for-2018/#657e1472486b. 77 Id . § 2301.002. 78 Id . Subchapter F., §§ 2301.251 - 2301.266. 79 Id . § 2301.263