Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—Colo. App.: GM avoids challenge to dealership relocation approval, (Jul 1, 2016)

By Linda O’Brien, J.D., LL.M.

In an action by a General Motors (GM) dealership protesting the auto maker’s approval of the relocation of a competing dealership to its relevant market area, the Colorado Department of Revenue’s refusal to take any action against GM or the competing dealership was a "final agency action" reviewable only by a court of appeals, the Colorado appellate court in Denver has decided. Thus, the district court’s dismissal of the case was affirmed (West Colorado Motors, LLC v. General Motors, LLC, June 30, 2016, Loeb, A.).

West Colorado Motors, d/b/a Autonation Buick GMC Park Meadows (Park Meadows) is a franchised Buick and GMC automobile dealership located in Lone Tree, Colorado. Alpine Buick GMC, LLC also is a franchised Buick and GMC automobile dealership located in Denver, Colorado. In April 2014, GM notified Park Meadows of its intent to approve the relocation of the Alpine dealership to Littleton, Colorado, which was within Park Meadows’ "relevant market area."

In June and September 2014, Park Meadows sent letters to the Colorado Department of Revenue, protesting GM’s approval of Alpine’s relocation, and requesting an investigation and issuance of a cease and desist order. The Department declined both requests in a November 2014 letter. Subsequently, Park Meadows filed suit in the Denver district court, alleging that GM unreasonably approved Alpine’s relocation in violation of Colorado’s motor vehicle industry law. Park Meadows claimed that the relocation would result in a loss of sales, market share, and service opportunities. Alpine’s motion for dismissal of the case in its entirety was granted by the district court in May 2015. Park Meadows appealed.

Statutory requirements. The court determined that the November 2014 letter from the Colorado Department of Revenue constituted a final agency action subject to judicial review by the court of appeals. First, the court noted that the department’s letter satisfied the requisite elements of a "final agency action" under Colorado law. As provided in the state Administrative Procedure Act (APA), the department letter prominently displayed the date of the letter—thus qualifying as the effective date of the agency’s action—and included the names of Park Meadows and the agency’s executive director.

Case law. For an agency action to be final and subject to judicial review, the appellate court found instructive the decision in Chittenden v. Colo. Bd. Of Social Work Examiners, 2012 COA 150, which holds that the action must "mark the consummation of the agency’s decision-making process and not be merely tentative or interlocutory in nature, and constitute an action by which rights or obligations have been determined or from which legal consequences will flow." In this case, the department letter indicated that the decision-making process and review of Park Meadows’ request was complete. Additionally, the letter determined on the merits that the agency was not going to take any action against GM or Alpine to stay or overturn GM’s relocation decision.

Formal adjudicatory proceeding. Finally, a formal adjudicatory proceeding was not a prerequisite to a final agency action, the court determined. Park Meadows provided no case law articulating any requirement that a formal adjudicatory proceeding must precede a final agency action. In any event, the court noted, there was a proceeding in this case. The APA defines "proceeding" as "any agency process for any rule or rule-making, order, or adjudication, or license or licensing." The department’s letter constituted an order that issued pursuant to an agency process that Park Meadows began and which concluded with the agency’s determination that there was no basis to take any action against GM or Alpine. Thus, the district court did not err in dismissing the case in its entirety, the court concluded.

The case is No. 2016COA103.

Attorneys: Patrick G. Compton (Lindquist & Vennum LLP) for West Colorado Motors, LLC. Mark T. Clouatre, John P. Streelman, and Webster C. Cash III (Wheeler Trigg O’Donnell LLP) for General Motors, LLC. Jonathan G. Pray and Hannah M. Caplan (Brownstein Hyatt Farber Schreck, LLP) for Alpine Buick GMC, LLC.

Companies: West Colorado Motors, LLC; General Motors, LLC; Alpine Buick GMC, LLC

Cases: FranchisingDistribution ColoradoNews