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Log In / Register | May 25, 2018

Dealership Claims after Andy Mohr Truck Centers v. Volvo Trucks North America

The recent Seventh Circuit opinion reversing a $6.5 million-dollar verdict against Volvo Trucks North America appears, on its face, to be a blow against franchisees.  But the opinion is not fatal to dealer claims and provides an important silver lining.

The jury awarded Andy Mohr Truck Centers $6.5 million dollars on its Indiana Deceptive Franchise Practices Act (IDFPA) claim alleging that Volvo provided more favorable terms to other franchisees through its incentive program on 13 transactions.  On appeal, Volvo argued that the evidence did not support an inference of unfair discrimination because 1) the comparators were not similarly situated; 2) the data Mohr used was “cherry-picked”; and 3) the IDFPA has limited application.

1. The Comparators Were Similarly Situated
The court rejected Volvo’s argument that the comparable entities were not similarly situated.  The court reasoned that Mohr provided evidence that other franchisees operated under the same sale and marketing policies, there were similar transactions for the same truck model, the market for large fleet transactions was national, and the franchisees operated under nearly identical form dealer agreements.  Ultimately, the court reasoned that this was a consideration for the jury.

2. Showing Required for Unfair Discrimination
The court reversed the jury verdict, reasoning that providing evidence of only 13 transactions evidencing different pricing does not amount to “unfair” discrimination.  The court did provide examples for when a dealer may prove unfair discrimination.  For example, if a dealer could show that it consistently was awarded worse concessions than its competitors.  Also, a dealer could show discrimination if the franchisor offered less favorable terms for the same purchase by the same customer.  

3. The Limits of the IDFPA
The silver lining from the court is that, while it did not address Volvo’s argument that the IDFPA is limited to only Indiana dealers, it confirmed that a contractual provision could not limit the damages pursuant to the IDFPA.    

Another silver lining is that the Seventh Circuit did not foreclose the possibility of other potential claims based on similar facts such as claims under the Robinson-Patman Act (15 U.S.C. § 13(a)) or the Dealer Act (15 U.S.C. § 1221).  Claims pursuant to these statutes were not raised by Mohr. 

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