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New York Vehicle & Traffic - Article 17-A - § 463 Unfair Business Practices by Franchisors

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Vehicle and Traffic
 
    §  463.  Unfair  business  practices  by  franchisors.  1. It shall be
  unlawful for any franchisor to directly or indirectly coerce or  attempt
  to coerce any franchised motor vehicle dealer:
    (a)  To  order  or  accept  delivery of any motor vehicle or vehicles,
  appliances, tools, machinery, equipment, parts or  accessories  therefor
  or  any  other  commodity  or  commodities  which  shall  not  have been
  voluntarily ordered by said franchised motor vehicle dealer  except  any
  such items required by a recall campaign.
    (b)  To  order  or  accept  delivery of any motor vehicle with special
  features, appliances, accessories or equipment not included in the  list
  price of said motor vehicle as publicly advertised by the franchisor.
    (c)  To  contribute  or  pay  money  or  anything  of  value  into any
  cooperative or other advertising program or fund unless such program  or
  fund shall be controlled by a dealer or group of dealers.
    (d)  To  participate  in  any  training program unless such program is
  expressly limited to specific information necessary to sell  or  service
  the models of vehicles the dealer is authorized to sell or service under
  the  dealer's  franchise  with  that  franchisor. A franchisor shall not
  unreasonably require an owner or dealer principal  of  a  dealership  to
  attend  any  meeting  or  training  program.  A  franchisor who requires
  participation in a training program  as  authorized  by  this  paragraph
  shall  to  the largest extent practicable make all reasonable efforts to
  limit or reimburse the expenses of a dealer incurred in  attending  such
  program.  Nothing  in  this  paragraph  shall  be deemed to prohibit any
  training program located  within  a  dealer's  own  principal  place  of
  business.
    2.  It shall be unlawful for any franchisor, notwithstanding the terms
  of any franchise contract:
    (a)  To  refuse  to  deliver  in  reasonable  quantity  and  within  a
  reasonable  time  after  receipt  of  a dealer's order to any franchised
  motor vehicle dealer any vehicle covered  by  such  franchise  which  is
  publicly  advertised  by  such  franchisor to be available for immediate
  delivery.  Provided, however, the failure to deliver any  motor  vehicle
  shall  not  be considered a violation of this article if such failure be
  due to acts of God, work stoppages or delays due  to  strikes  or  labor
  difficulties,  freight  embargoes,  shortage  of  materials,  a  lack of
  manufacturing capacity or other causes over which the  franchisor  shall
  have no control.
    (b)  To  directly  or  indirectly  coerce  or  attempt  to  coerce any
  franchised motor vehicle dealer to enter into any  agreement  with  such
  franchisor  or  officer, agent or other representative thereof, or to do
  any other act prejudicial to the monetary interests or  property  rights
  of  said  dealer  by  threatening  to  cancel  any unexpired contractual
  agreement existing between such franchisor and  said  dealer.  Provided,
  however,  that  good faith notice to any franchised motor vehicle dealer
  of said dealer's violation of any terms or provisions of such  franchise
  shall not constitute a violation of this article.
    (c)  To  condition  the  renewal  or  extension  of  a  franchise on a
  franchised motor vehicle dealer's substantial renovation of the dealer's
  place of business or  on  the  construction,  purchase,  acquisition  or
  rental of a new place of business by the franchised motor vehicle dealer
  unless the franchisor has advised the franchised motor vehicle dealer in
  writing  of  its  intent  to impose such a condition within a reasonable
  time prior to the effective date of the  proposed  date  of  renewal  or
  extension  (but  in  no  case  less  than  one  hundred eighty days) and
  provided the franchisor demonstrates the need for  such  change  in  the
  place  of  business and the reasonableness of such demand in view of the
  need to service the public and the economic conditions existing  in  the

  automobile  industry  at  the  time such action would be required of the
  franchised motor vehicle dealer. As  part  of  any  such  condition  the
  franchisor  shall  agree,  in  writing,  to  supply  the  dealer  with a
  reasonable  quantity  and mix of additional new motor vehicles which, as
  determined by a reasonable analysis of market conditions, are  projected
  to  meet  the  sales  levels necessary to support the increased overhead
  incurred by the franchised  motor  vehicle  dealer  by  reason  of  such
  renovation, construction, purchase, acquisition or rental of a new place
  of business.
    (d)  (1)  To terminate, cancel or refuse to renew the franchise of any
  franchised motor vehicle dealer except for due cause, regardless of  the
  terms  of  the  franchise.  A franchisor shall notify a franchised motor
  vehicle dealer, in writing, of its intention  to  terminate,  cancel  or
  refuse to renew the franchise of such dealer at least ninety days before
  the  effective  date  thereof,  stating  the  specific  grounds for such
  termination, cancellation or refusal to renew. In  no  event  shall  the
  term  of  any  such  franchise expire without the written consent of the
  franchised motor vehicle dealer involved prior to the expiration  of  at
  least  ninety  days  following such written notice except as hereinafter
  provided.
    (2) A change in  ownership  of  a  manufacturer  or  distributor  that
  contemplates  a  continuation  of  that line make in the state shall not
  directly  or  indirectly,  through  actions  of  any   parent   of   the
  manufacturer   or   distributor,   subsidiary  of  the  manufacturer  or
  distributor, or common entity  cause  a  termination,  cancellation,  or
  nonrenewal  of  a dealer agreement by a present or previous manufacturer
  or distributor of an  existing  agreement  unless  the  manufacturer  or
  distributor  offers  the  new  vehicle dealer an agreement substantially
  similar to that offered to other dealers of the same line make.
    (3) The provisions of subparagraphs one  and  two  of  this  paragraph
  notwithstanding,  a  franchisor  may  terminate  its  franchise  with  a
  franchised motor vehicle dealer  upon  at  least  fifteen  days  written
  notice  upon the occurrence of any of the following: (i) conviction of a
  franchised motor vehicle dealer, or one of its principal  owners,  of  a
  felony  or  a  crime  punishable  by  imprisonment  which  substantially
  adversely affects the business of the franchisor, or (ii) the failure of
  the franchised motor vehicle dealer to conduct its customary  sales  and
  service  operations  for  a  continuous  period  of seven business days,
  except for acts of God or circumstances beyond the direct control of the
  franchised motor vehicle dealer or when  any  license  required  by  the
  franchised motor vehicle dealer is suspended for a period of thirty days
  or  less, or (iii) insolvency of the franchised motor vehicle dealer, or
  filing of any petition by or against the franchised motor vehicle dealer
  under any bankruptcy or receivership law.
    (e) (1) Any franchised motor vehicle dealer  who  receives  a  written
  notice  of termination or a written notice of a franchisor's demand that
  the dealer substantially renovate an existing place of business, or buy,
  construct or rent a new place of business as a  condition  of  franchise
  renewal or extension may have a review of the demand to change the place
  of  business  or the threatened termination by instituting an action, as
  provided in section four hundred sixty-nine of  this  article.  If  such
  action is commenced within four months of receipt of notice, such action
  shall   serve  to  stay,  without  bond,  the  proposed  termination  or
  renovation or demand to change the place of  business  until  the  final
  judgment  has  been rendered in an adjudicatory proceeding or action, as
  provided in section four hundred sixty-nine of this article.
    (2) The issues to be determined in an  action  commenced  pursuant  to
  subparagraph  one  of this paragraph are whether the franchisor's notice

  of termination was issued with due cause and in good faith.  The  burden
  of  proof  shall be upon the franchisor to prove that due cause and good
  faith exist. The franchisor shall also have the burden of  proving  that
  all  portions  of its current or proposed sales and service requirements
  for the protesting franchised new motor vehicle dealer are reasonable.
    The determination of due cause shall be that there exists  a  material
  breach  by  a  new  motor  vehicle  dealer of a reasonable and necessary
  provision of a franchise if the breach is not cured within a  reasonable
  time  after  written  notice  of  the  breach has been received from the
  manufacturer or distributor.
    (3) The franchisor shall provide notification in writing to the dealer
  that the dealer has one hundred eighty days to correct dealer sales  and
  service  performance  deficiencies or breaches and that the franchise is
  subject to termination under this section if the dealer does not correct
  those deficiencies  or  breaches.  If  the  termination  is  based  upon
  performance  of  the  dealer in sales and service then there shall be no
  due cause if the  dealer  substantially  complies  with  the  reasonable
  performance  provisions of the franchise during such cure period and, no
  due cause if the failure to demonstrate such substantial compliance  was
  due to factors which were beyond the control of such dealer.
    (f)  To  intentionally  resort  to  or  use  any  false  or misleading
  advertisements.
    (g) To sell or offer to sell any new motor vehicle to  any  franchised
  motor  vehicle  dealer  at a lower actual price therefor than the actual
  price offered to any other franchised motor vehicle dealer for the  same
  model vehicle similarly equipped or to utilize any device including, but
  not  limited  to, sales promotion plans or programs which result in such
  lesser actual price. Provided, however, the provisions of this paragraph
  shall not apply to sales to a franchised motor vehicle dealer  for:  (i)
  resale to any unit of government; or (ii) donation or use by said dealer
  in  a driver education program. This paragraph shall not be construed to
  prevent the offering of incentive programs or other  discounts  provided
  such  incentives or discounts are reasonably available to all franchised
  motor vehicle dealers in this state on a proportionately equal basis.
    (h) To sell or offer to sell any new  motor  vehicle  to  any  person,
  except  a  distributor, at a lower actual price therefor than the actual
  price offered and charged to a franchised motor vehicle dealer  for  the
  same  model  vehicle  similarly  equipped or to utilize any device which
  results in such lesser actual price.
    (i) To  sell  or  offer  to  sell  parts  and/or  accessories  to  any
  franchised  motor  vehicle  dealer at a lower actual price therefor than
  the actual price offered to any other franchised  motor  vehicle  dealer
  for  similar  parts  and/or  accessories  for  use  in his own business.
  Provided, however, that nothing herein contained shall be  construed  to
  prevent  a  manufacturer  or  distributor,  or  any  agent thereof, from
  selling to a franchised motor vehicle dealer, who operates and serves as
  a wholesaler of parts and accessories, such parts and accessories as may
  be ordered by such franchised motor vehicle dealer for resale to  retail
  outlets  at  a  lower  actual  price  than  the  actual  price offered a
  franchised motor vehicle dealer who does  not  operate  or  serve  as  a
  wholesaler  of  parts  and  accessories.  This  paragraph  shall  not be
  construed to  prevent  the  offering  of  incentive  programs  or  other
  discounts  provided  the franchisor demonstrates that such incentives or
  discounts are reasonably  available  to  all  franchised  motor  vehicle
  dealers in the state on a proportionately equal basis.
    (j)  To  prevent  or attempt to prevent, by contract or otherwise, any
  franchised motor vehicle dealer from changing the capital  structure  of
  its  dealership,  or  the  means  by  or  through  which it finances the

  operation of its dealership, or finances the acquisition or retention of
  inventory, provided the dealer at all times meets any capital  standards
  agreed  to  between  the dealer and the franchisor and as applied by the
  franchisor  to  all other comparable franchised motor vehicle dealers of
  the franchisor located within the state.
    (k) To unreasonably withhold consent to the sale  or  transfer  of  an
  interest,  in  whole  or  in  part,  to any other person or party by any
  franchised motor vehicle dealer or any partner  or  stockholder  of  any
  franchised  motor  vehicle  dealer.  If such consent to sale or transfer
  shall be withheld  by  the  franchisor,  the  franchisor  shall  provide
  specific  reasons  for  its  withholding of consent within sixty days of
  receipt of the  request  for  such  consent  provided  such  request  is
  accompanied by proper documentation as may reasonably be required by the
  franchisor.  Upon  receipt  of  notice  and reasons for the franchisor's
  withholding of consent, the franchised motor vehicle dealer  may  within
  one  hundred twenty days have a review of the manufacturer's decision as
  provided in section four hundred sixty-nine of this article.
    (l) To require a franchised  motor  vehicle  dealer  to  assent  to  a
  release,  assignment,  novation,  waiver or estoppel which would relieve
  any person from liability imposed under this article, provided that this
  paragraph shall not be construed to prevent a franchised  motor  vehicle
  dealer from entering into a valid release or settlement agreement with a
  franchisor.
    (m)  (1)  To  deny  to  the surviving spouse or heirs of an individual
  franchised motor vehicle dealer or of a  partner  of  an  unincorporated
  franchised  motor  vehicle  dealer  or  of  a stockholder of a corporate
  franchised motor vehicle dealer the right to succeed to the interest  of
  the  decedent  in such franchised motor vehicle dealership enterprise or
  directly  or  indirectly  to  interfere  with,  hinder  or  prevent  the
  continuance  of  the  business of the franchised motor vehicle dealer by
  reason of such succession to the interest  of  the  decedent.  Provided,
  however,  that  the continuation of the business of the franchised motor
  vehicle dealer shall be conducted under competent management  acceptable
  to the franchisor, whose acceptance shall not be unreasonably withheld.
    (2)  Notwithstanding  the foregoing, in the event the franchised motor
  vehicle dealer and franchisor have duly executed an agreement concerning
  succession  rights  prior  to  the  individual  dealer's,  partner's  or
  stockholder's  death  and  if such agreement has not been revoked by the
  franchised motor vehicle dealer, such agreement shall be observed,  even
  if  it designates an individual other than the surviving spouse or heirs
  of the decedent.
    (n) To fail to  indemnify  and  hold  harmless  its  franchised  motor
  vehicle dealers against any losses or damages including, but not limited
  to,  court  costs  and attorneys' fees arising out of actions, claims or
  proceedings including, but not  limited  to,  those  based  upon  strict
  liability,   negligence,   misrepresentation,   warranty  (expressed  or
  implied) or revocation as described in  section  2-608  of  the  uniform
  commercial  code, where the action, claim or proceeding directly relates
  to the manufacture, assembly or design of new motor vehicles,  parts  or
  accessories  or  other  functions  of  the franchisor including, without
  limitation, the selection by the franchisor of parts or  components  for
  the  vehicle  or  any  damages  to  merchandise or vehicles occurring in
  transit  where  the   carrier   is   designated   by   the   franchisor,
  notwithstanding  the  terms  of  any  franchise. If the action, claim or
  proceeding includes independent allegations against the franchised motor
  vehicle dealer, the franchisor shall  bear  only  that  portion  of  the
  costs,  fees  and judgment which is directly related to the manufacture,
  assembly or design of  the  vehicle,  parts  or  accessories,  or  other

  function  of  the  franchisor beyond the control of the franchised motor
  vehicle dealer.
    (o)  (1)  Upon  a  termination  of  a  franchise  by  a  franchisor or
  franchised motor vehicle dealer under this article, to refuse to  accept
  a  return  of new and unused current model motor vehicle inventory which
  has been acquired from the franchisor, new and unused  noncurrent  model
  motor  vehicle  inventory  which  has  been acquired from the franchisor
  within one hundred twenty days of the effective date of the termination;
  supplies, parts, equipment and furnishings purchased from the franchisor
  or its approved  sources  and  special  tools.  The  obligation  of  the
  franchisor  shall  be  limited  to  the repurchase of the above property
  which is unaltered and undamaged, in good and useable condition, and, in
  the case of supplies, parts and  equipment  to  those  items  which  are
  currently   listed   in   the  franchisor's  supplies  and  parts  list.
  Furthermore, the obligation of the  franchisor  to  repurchase  supplies
  upon  a  termination,  cancellation  or nonrenewal by a franchised motor
  vehicle dealer shall be limited to supplies mandated by the  franchisor.
  Parts  eligible  for  repurchase  shall  include  parts  which have been
  renumbered in the current parts list but which are identical  in  design
  and  material to the currently numbered part. The return rights afforded
  the  franchised  motor  vehicle  dealer  under  the  provisions  of  the
  paragraph  shall  be  in  addition  to  those,  if  any, provided in the
  franchise agreement.
    (2) The franchisor shall pay fair and reasonable compensation for  the
  above  described  property  upon  repurchase.  In  the case of new motor
  vehicle  inventory,  accessories  and   parts,   fair   and   reasonable
  compensation shall in no instance be less than the net acquisition price
  paid  by  the  franchised  motor vehicle dealer to the franchisor or its
  approved sources. Upon a termination of a  franchise  by  a  franchisor,
  within thirty days of such termination, the franchisor shall send to the
  franchised motor vehicle dealer instructions on the methodology by which
  the  franchised  motor  vehicle  dealer  must  ship  the above described
  property to the franchisor; the franchisor shall then remit payment  for
  such  property  to the franchised motor vehicle dealer within sixty days
  after receipt of such property.
    (3) Upon a termination of a franchise by a  franchised  motor  vehicle
  dealer  where  the  franchise consists primarily of the distribution and
  sale of house coaches, the franchisor's repurchase obligations set forth
  in this paragraph shall not apply.
    (p)  To  refuse  to  repurchase  for  cost,  including  transportation
  charges,  a  new  vehicle  which  has  been substantially damaged by the
  franchisor or its agent; or to sell or transfer to  a  franchised  motor
  vehicle  dealer  a new motor vehicle which has been subjected to repairs
  with a retail value in excess of five  percent  of  the  lesser  of  the
  manufacturer's  or  distributor's  suggested  retail  price  where  such
  repairs are performed  after  shipment  from  the  franchisor  including
  damage  to  the  vehicle  while  in  transit  without  so  notifying the
  franchised motor vehicle dealer  to  whom  such  new  motor  vehicle  so
  repaired is sold or transferred. Such notice shall be in writing, advise
  of such repairs, and be provided prior to the receipt of any payment for
  such motor vehicle. If the franchisor shall fail to provide such notice,
  any  franchised  motor vehicle dealer suffering a loss by reason of such
  failure shall be entitled  to  reimbursement  from  the  franchisor  who
  failed to provide such notice.
    (q) To provide directly or to grant to any person the right to perform
  warranty  or  recall  service on any new motor vehicle line other than a
  house coach line but deny to said person the right to purchase the motor
  vehicles of that line for resale to consumers in this state as new motor

  vehicles provided, however, that this paragraph  shall  not  prohibit  a
  franchisor from:
    (1)  authorizing  warranty service by employees of a fleet operator or
  governmental entity on owned vehicles; or
    (2) authorizing such other persons to perform warranty service as  the
  franchisor  deems  necessary  to  protect  its  interests as they may be
  affected by section one hundred ninety-eight-a of the  general  business
  law.
    A "fleet operator" shall be required to own for its own use or for the
  use of others the minimum number of vehicles of the current or preceding
  model  year manufactured or sold by the same franchisor as determined by
  the standards of such franchisor applied on  a  general  and  consistent
  basis   to   substantially  all  fleet  operators.  Notwithstanding  the
  preceding, a franchisor which withdraws from the  United  States  market
  shall  continue  to allow its former franchised motor vehicle dealers to
  continue servicing and supplying  parts,  including  service  and  parts
  supplied under the franchisor's warranty to vehicle owners, for a period
  of  at  least  five  years  after such withdrawal from the United States
  market.
    (r) To establish or attempt to establish the actual resale  price  for
  any  new  motor vehicle, part or accessory charged by a franchised motor
  vehicle dealer in the state, provided, however, nothing contained herein
  shall prohibit publication of recommended resale  prices  or  historical
  information by a franchisor.
    (s)  To grant a commission to any person other than a franchised motor
  vehicle dealer within the state involved in the  sale  of  a  new  motor
  vehicle  by such franchised motor vehicle dealer without said franchised
  motor vehicle dealer's written consent. This prohibition shall not apply
  to sales incentive programs for employees of  franchised  motor  vehicle
  dealers  as  long  as  the  payments  are made by the franchisor to such
  employees and not charged to the dealer.
    (t) To require or attempt to require by the  terms  of  the  franchise
  that   any   dispute   arising   out   of  or  in  connection  with  the
  interpretation, performance or nonperformance  of  the  parties  to  the
  franchise  or  in any way related to the franchise be determined through
  the application of any other state's laws.
    (u) To use any subsidiary corporation, affiliated corporation, captive
  finance  source  or  any  other  controlled  corporation,   partnership,
  association  or  person  to  accomplish what would otherwise be unlawful
  conduct under this article on the part of the franchisor.
    (v) To use  a  CSI  (customer  satisfaction  index)  or  other  system
  measuring  a  customer's  degree of satisfaction with a franchised motor
  vehicle dealer as a sale or service provider unless any such  system  is
  designed  and implemented in such a way that it is fair and equitable to
  both the franchisor and the franchised  motor  vehicle  dealer.  In  any
  dispute  between  a franchisor and a franchised motor vehicle dealer the
  party claiming the benefit of the system as justification  for  acts  in
  relation  to  the  franchise  shall have the burden of demonstrating the
  fairness and equity of the system both in design and  implementation  in
  relation  to  the  pending dispute. Upon request of any franchised motor
  vehicle dealer, a franchisor shall disclose in writing to such dealer  a
  description  of how that system is designed and all relevant information
  pertaining to such dealer used in the application of that system to such
  dealer.
    (w) To withhold from a franchised motor vehicle  dealer  a  new  motor
  vehicle product of the same line make which the franchised motor vehicle
  dealer  is  authorized  to  sell  under its franchise. Provided that the
  failure to deliver any motor vehicle shall not be  considered  to  be  a

  violation  of this article if such failure is due to an act of God, work
  stoppages or delays  due  to  strikes  or  labor  difficulties,  freight
  embargoes,  shortages of materials, a lack of manufacturing capacity, or
  other  causes  over  which  the  franchisor  shall  have  no  control. A
  franchised motor vehicle dealer shall be entitled to  sell  and  service
  all  the  manufacturer's  new  motor vehicles which the franchised motor
  vehicle  dealer  is  authorized  to  sell  pursuant  to  the  franchise,
  provided, however, a franchisor may impose reasonable facility, capital,
  training,  tools  and parts inventory requirements as a condition to the
  franchised motor vehicle dealer being permitted to sell such  new  motor
  vehicle   products.  Conditions  imposed  by  the  franchisor  shall  be
  reasonably applied to all  of  its  franchised  motor  vehicle  dealers.
  Franchised  motor  vehicle  dealers  who  are  presently  parties  to  a
  franchise with the franchisor shall be offered the  right  to  sell  and
  service  any  new  motor  vehicle product of the same line make owned or
  generally distributed by  such  franchisor's  franchised  motor  vehicle
  dealer  within such franchised motor vehicle dealer's designated area of
  responsibility designated in the franchise agreement before  any  person
  not  a  party  to such a franchise for the sale of motor vehicles within
  such area of responsibility is offered or granted a  franchise  to  sell
  such  new  motor  vehicle  product  from  a location within such area of
  responsibility.
    (x) To require a franchised motor vehicle dealer to agree to a term or
  condition in a franchise, or as a  condition  to  the  offer,  grant  or
  renewal of the franchise, lease or agreement, which:
    (1)  unless  preempted  by  federal law, requires the franchised motor
  vehicle  dealer  to  waive  trial  by  jury  in  actions  involving  the
  franchisor; or
    (2)  unless  preempted  by  federal  law,  specifies the jurisdiction,
  venues or tribunals in  which  disputes  arising  with  respect  to  the
  franchise,  lease  or  agreement  shall  or  shall  not be submitted for
  resolution or otherwise prohibits a franchised motor vehicle dealer from
  bringing an action in a particular forum otherwise available.
    (y) Subject to the provisions of paragraph (w) of this subdivision, to
  sell or offer to sell or lease or offer to lease a motor  vehicle  other
  than  to  a  franchised  motor  vehicle  dealer in this state; provided,
  however, that this paragraph shall not apply to sales or leases  of  new
  motor  vehicles  made by a franchisor to its employees, immediate family
  members of employees, retirees or immediate family members  of  retirees
  which  are  hereby  authorized notwithstanding the provisions of section
  four hundred fifteen of this title.  Nothing  in  this  paragraph  shall
  prohibit  a  franchisor  from  utilizing  direct  marketing  designed to
  generate leads via mail, phone, or any other medium, provided that leads
  developed thereby are referred to the franchised motor  vehicle  dealers
  in  this  state  and in proximity to the consumer pursuant to a fair and
  equitable system of allocating such leads or  to  the  franchised  motor
  vehicle  dealer  as  specified  by  the consumer. The provisions of this
  paragraph shall not apply to  franchisors  of  house  coaches  when  the
  franchisor  does  not  have  any  franchised house coach dealers in this
  state.
    (z) To charge back or otherwise hold liable a franchised motor vehicle
  dealer for sales incentives or charges related to a  new  motor  vehicle
  sold  by  the franchised motor vehicle dealer and subsequently exported,
  providing such dealer can demonstrate that he  exercised  due  diligence
  and  that  the  sale was made in good faith and without knowledge of the
  purchaser's intention to export the motor vehicle, or that  such  dealer
  reasonably relied on approvals from the franchisor to complete a sale. A
  franchised  motor  vehicle dealer which causes a new motor vehicle to be

  registered in this state  or  in  a  foreign  state  and  causes  to  be
  collected  the  appropriate  sales and use tax shall be presumed to have
  exercised due diligence.
    (aa) To: (1) sell directly to a franchised motor vehicle dealer or, to
  or  through  a  franchised  motor vehicle dealer in which the franchisor
  owns any interest or controls the management,  directly  or  indirectly,
  motor  vehicles, parts, warranties, or services at a price that is lower
  than the price which the franchisor  charges  to  all  other  franchised
  motor vehicle dealers; or
    (2)  sell  directly  to  a  consumer  at retail new original equipment
  manufacturer's parts (OEM) at a price that is lower than the price which
  the franchisor makes available to franchised motor vehicle dealers; or
    (3) otherwise provide a franchised motor vehicle dealer in  which  the
  franchisor  owns  any  interest  or controls the management, directly or
  indirectly, goods or services at a price that is lower  than  the  price
  charged to all other franchised motor vehicle dealers.
    (bb) On and after the effective date of this paragraph, to acquire any
  interest  in any additional motor vehicle dealer in this state, with the
  exception of stock in a publicly held dealer when ownership  is  passive
  and  for  investment  purposes  only; provided, however, that nothing in
  this paragraph shall prohibit a franchisor and its affiliates  that  own
  an interest in a franchised motor vehicle dealership that operates or is
  approved  to operate, within one hundred twenty days after the effective
  date of this paragraph, from selling or servicing a new line make of the
  franchisor or its affiliates that was not distributed in this  state  as
  of the effective date of this paragraph. Provided, further, that nothing
  in  this  paragraph  shall  prohibit  a  franchisor  from  acquiring any
  interest in any franchised motor vehicle dealership:
    (1) when operating such franchise  for  a  temporary  period,  not  to
  exceed  one  year,  during  the  transition  from one owner of the motor
  vehicle dealership to another, provided, however,  that  such  temporary
  period  may  be extended once for an additional period not to exceed one
  year for good cause. Provided that for franchisors of house coaches, the
  period of temporary ownership of a franchised house coach dealership may
  be extended in one year increments for good cause shown, except that the
  aggregate of such extensions shall not exceed five years; or
    (2) when operating such franchise temporarily under  a  plan  with  an
  independent individual who is obligated to make a significant investment
  in  the dealership that is subject to loss and has an ownership interest
  or expects to acquire  full  ownership  in  a  reasonable  period  under
  reasonable terms and conditions, provided that a reasonable period shall
  be presumed to not exceed eight years.
    (cc)(1) To enter into a franchise establishing an additional new motor
  vehicle  dealer  or relocating an existing new motor vehicle dealer into
  the relevant market area of an existing franchise motor  vehicle  dealer
  of  the same line make unless the franchisor provides notice pursuant to
  the terms of this subdivision. All dealers that have a  relevant  market
  area  that  encompasses  the  proposed site shall be entitled to written
  notice, via certified mail return receipt requested, informing  them  of
  the  proposed  addition  or relocation. Any new motor vehicle dealer may
  institute an action as provided in section four  hundred  sixty-nine  of
  this article to protest the establishment or relocation of the new motor
  vehicle dealer following receipt of such notice, or following the end of
  any  appeal  procedure provided by the franchisor. In any action brought
  by the dealer, the franchisor shall have  the  burden  of  proving  that
  there exists good cause for any such addition or relocation. Institution
  of  an  action pursuant to this subdivision shall serve to stay, without
  bond, the proposed addition or relocation until  a  final  judgment  has

  been  rendered  in  a  proceeding  or action as provided in section four
  hundred sixty-nine of this article.
    (2) This subdivision shall not apply to:
    (i)  the  relocation  or  replacement,  other  than a replacement of a
  dealer who has moved within such area, of an existing new motor  vehicle
  dealer  within that dealer's own existing relevant market area, provided
  that the relocation not be to a site within the relevant market area  of
  a  licensed  new  motor  vehicle  dealer for the same line make of motor
  vehicle, unless such existing franchise was  previously  located  within
  such new motor vehicle dealer's relevant market area; or
    (ii)  the  addition of a new motor vehicle dealer or the establishment
  of a replacement new motor vehicle dealer, other than a replacement of a
  dealer who has moved within such area, at  or  within  two  miles  of  a
  location  at  which  a  former licensed new motor vehicle dealer for the
  same line make of new motor vehicle  had  ceased  operating  within  the
  previous two years; or
    (iii)  the  relocation  of an existing new motor vehicle dealer within
  two miles of the existing site of the new motor  vehicle  dealership  if
  the  franchise  has  been operating on a regular basis from the existing
  site for a minimum of three years immediately preceding the  relocation;
  or
    (iv)  the  relocation  of  a new motor vehicle dealer of the same line
  make if that dealer or replacement dealer is moving further away from  a
  motor vehicle dealer of of the same line make.
    (3)  In  determining  whether  good cause has been established for not
  entering into or relocating an additional new motor vehicle  dealer  for
  the  same  line make, there shall be individual findings with respect to
  the following:
    (i) the permanency of the investment of both the existing and proposed
  additional new motor vehicle dealers;
    (ii) growth or decline in population, density of population,  and  new
  car registrations in the area;
    (iii) effect on the consuming public in the area;
    (iv)  whether  it is injurious or beneficial to the public welfare for
  an additional new motor vehicle dealer to be established;
    (v) whether the new motor vehicle dealers of the  same  line  make  in
  that  area  are  providing  adequate competition and convenient customer
  care for the motor vehicles of the same line make including the adequacy
  of motor vehicle sales and  service  facilities,  equipment,  supply  of
  motor vehicle parts, and qualified service personnel;
    (vi)  whether  the  establishment  of  an additional new motor vehicle
  dealer or relocation of an existing new  motor  vehicle  dealer  in  the
  relevant  market  area would increase competition in a manner beneficial
  to the long-term public interest;
    (vii) the effect on the dealer that proposed to relocate; and
    (viii) any other factor which may be deemed material by the finder  of
  fact to the unique facts and circumstances presented.
    (dd)  To unreasonably prevent or refuse to approve the relocation of a
  dealership to another site  within  that  dealership's  relevant  market
  area.  The  dealership  must  provide prior written notice providing the
  address of the proposed new location and a site  plan  of  the  proposed
  facility.  The  franchisor  must,  within  sixty days of receipt of such
  information, grant or deny the dealer's relocation request.  Failure  to
  timely deny the request shall be deemed consent to the relocation.
    (ee)  To  fail  to  reimburse  a dealer in full for the actual cost of
  providing a loaner vehicle to any  customer  who  is  having  a  vehicle
  serviced  at the dealership if the provision of such a loaner vehicle is
  required by the franchisor. For the purposes of this  paragraph,  actual

  cost  shall  not  exceed the average cost in the dealer's region for the
  rental of a substantially similar make and model as  the  vehicle  being
  serviced.
    (ff)(1) To modify the franchise of any franchised motor vehicle dealer
  unless  the  franchisor notifies the franchised motor vehicle dealer, in
  writing, of its intention to modify the  franchise  of  such  dealer  at
  least  ninety  days  before  the  effective  date  thereof,  stating the
  specific grounds for such modification.
    (2)  For  purposes  of  this   paragraph,   the   term   "modify"   or
  "modification"  means any change or replacement of any franchise if such
  change or replacement may substantially and  adversely  affect  the  new
  motor  vehicle  dealer's  rights,  obligations,  investment or return on
  investment.
    (3) If any franchised motor vehicle  dealer  who  receives  a  written
  notice  of  modification  institutes an action within one hundred twenty
  days of receipt of such notice  as  provided  in  section  four  hundred
  sixty-nine   of  this  article  to  have  a  review  of  the  threatened
  modification, such  action  shall  serve  to  stay,  without  bond,  the
  proposed  modification  until  a  final judgment has been rendered in an
  adjudicatory proceeding or action as provided in  section  four  hundred
  sixty-nine of this article. A modification is deemed unfair if it is not
  undertaken  in  good  faith;  is not undertaken for good cause; or would
  adversely and substantially alter the rights, obligations, investment or
  return on investment of the franchised motor  vehicle  dealer  under  an
  existing  franchise  agreement. In any action brought by the dealer, the
  franchisor shall have the burden of proving that  such  modification  is
  fair and not prohibited.
    (gg)  To  use  an  unreasonable,  arbitrary  or  unfair sales or other
  performance standard in determining a franchised motor vehicle  dealer's
  compliance  with  a  franchise  agreement.  Before  applying  any sales,
  service or other performance standard  to  a  franchised  motor  vehicle
  dealer,  a  franchisor  shall  communicate  the  performance standard in
  writing in a clear and concise manner.
    (hh) To require that a  franchised  motor  vehicle  dealer  contribute
  monetarily  to  any  program  or  promotion  without first receiving the
  written consent of the franchised motor vehicle dealer to participate in
  such program or promotion. For purposes of this paragraph,  the  written
  consent  specific  to  the  particular  program  or  promotion  must  be
  executed, by means of handwritten, typed or electronic signature, within
  sixty days prior to the start of the particular  program  or  promotion,
  provided,  however,  that  consent  shall  not  be  required to continue
  participation in a program or promotion to which the  dealer  has  given
  written  consent to renewal, and provided further, that the dealer shall
  be able to terminate such renewal upon reasonable written notice  within
  thirty days following the start or renewal of the program or promotion.
    2-a.  On  and  after  the  effective  date  of  this subdivision, if a
  franchisor notifies a franchised motor vehicle dealer,  in  writing,  of
  its  decision  to monitor the continued viability of the dealership, the
  franchisor shall include in such notice the specific reasons upon  which
  the franchisor's decision is based.
    2-b.  It  shall  be  unlawful  for any franchisor to provide financial
  information particular to a franchised motor vehicle  dealer,  including
  but  not  limited  to,  selling  prices and sales margins, that has been
  collected from  such  franchised  motor  vehicle  dealer  to  any  other
  franchised  motor  vehicle  dealer  including a franchised motor vehicle
  dealer in which the franchisor owns any interest or  controls,  directly
  or  indirectly,  the  management  thereof.  Nothing  contained  in  this
  subdivision shall be deemed to prevent any  franchisor  from  collecting

  and  distributing  any such financial information in an aggregate manner
  provided that the information from any motor  vehicle  dealer  has  been
  combined  with the information from one or more franchised motor vehicle
  dealers  such that the financial information from a particular dealer is
  no longer identifiable to such dealer.
    3. In any action or proceeding instituted pursuant to  the  provisions
  of  this  section, there shall be available to the franchisor all of the
  defenses provided for under section thirteen-b of title fifteen,  United
  States code, known as the Robinson-Patman Act.
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Last modified: February 16, 2014