Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—Wis. App.: Termination of agricultural equipment dealership held unlawful, (Apr 30, 2015)

By Greg Hammond, J.D.

An agricultural equipment manufacturer could not overturn a jury’s finding that its termination of a dealership was unlawful under the Wisconsin Fair Dealership Law. The Wisconsin Court of Appeals in Madison determined that the dealership’s claims were not time-barred, sufficient evidence supported the jury’s finding, and the verdict was not tainted by the use of a map (Chili Implement Co., Inc. v. CNH America, LLC, April 30, 2015, per curiam).

Background. CNH America, LLC is an agricultural equipment manufacturer that entered into a dealership agreement with Chili Implement Co., Inc. Chili filed suit against CNH, alleging that CNH unlawfully terminated the dealership agreement under the Wisconsin Fair Dealership Law. A jury found that CNH terminated Chili without good cause, and CNH appealed.

Statute of limitations. CNH first argued that the statute of limitations began to run when Chili received the termination notice in March 2010, but that the one-year limitation period ended before Chili filed suit in January 2012, pursuant to CNH’s reading of Les Moise, Inc. v. Rossignol Ski Co., 122 Wis. 2d 51 (1985). The court rejected this argument, finding that CNH’s reading of Les Moise was overly broad. Most notably, the court found that there were obvious situations in which CNH’s interpretation of Les Moise made no sense, such as the instant case, where a dealer had at least one claim that was based on the grantor’s acts or omissions subsequent to the termination notice. Specifically, Chili’s suit involved a claim based on inadequate notice, but Chili also alleged termination-without-good-cause that depended on CNH’s acts or omissions that occurred after the termination notice was sent.

Sufficient evidence. Next, the court rejected CNH’s argument that there was insufficient evidence to support the jury’s finding that CNH lacked good cause to terminate Chili. Specifically, the court found that CNH failed to apply good cause standards to all of the evidence favoring Chili. Further, there was sufficient evidence demonstrating that CNH informed Chili that it was required to meet or exceed 90 percent of the Wisconsin state market share, which was discriminatory against a small dealer like Chili; expert testimony that CNH’s approach to discounts was inconsistent and arbitrary, unfairly disadvantaging small dealers; and CNH allowed some dealerships to continue as long as they showed “substantial” or “significant” improvement.

CNH’s argument that the verdict was tainted by the admission of a map depicting 20 of CNH’s Wisconsin dealers was also unavailing. The court reasoned that neither the map nor a plan to terminate Chili regardless of Chili’s performance was central to the gist of Chili’s claim that CNH terminated Chili without good cause by imposing requirements that were unreasonable and that were applied in a discriminatory fashion. The judgment was therefore affirmed.

The case number is 2014AP1496.

Attorneys: Gary L. Antoniewicz (Boardman & Clark LLP) for Chili Implement Co., Inc. Roberta F. Howell (Foley & Lardner LLP) for CNH America, LLC.

Companies: Chili Implement Co., Inc.; CNH America, LLC

Cases: FranchisingDistribution WisconsinNews