Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: Utah amends motor vehicle law to allow municipalities to protest dealership addition, relocation, (Apr 7, 2015)

By John W. Arden, J.D., LL.M.

Utah has amended its motor vehicle dealer law to enable “affected municipalities,” as well as existing dealers, to protest a franchisor’s addition or relocation of a dealership within a relevant market area of an existing dealership. The legislation (H.B. 290, Law 268) was approved by the Governor on March 27 and becomes effective on May 12, 2015.

The Utah New Automobile Franchise Act (Utah Code Annotated 1953, Title 13, Chapter 14, Section 13-14-101 through 13-14-310) was enacted in 1996 to regulate the relationship between automobile franchisors and franchisees. In addition to requiring good cause for termination or nonrenewal, the statute prohibited the establishment or relocation of a franchise within the relevant market area of an existing dealer, except with good cause; required a franchisor to notify the motor vehicle franchise advisory board of such establishment or relocation; and allowed an existing dealer to protest such establishment or relocation within its relevant market area.

This amendment to the statute revises the definition of “relevant market area”; changes the composition of the motor vehicle franchise advisory board; authorizes an “affected municipality” to appear and testify about the public interest in a hearing before the motor vehicle franchise board; and adds the impact on a municipality to the factors considered in determining whether the establishment or relocation is injurious or beneficial to the public interest.

News: FranchisingDistribution UtahNews