Alliance of Automobile Mfrs. v. Gwadosky, No. CIV.03-154-B-W.

• Decision Date: 25 January 2005
• Docket Number: No. CIV.03-154-B-W.
• Citation: Alliance of Automobile Mfrs. v. Gwadosky, 353 F.Supp.2d 97 (D. Me. 2005)
• Parties: ALLIANCE OF AUTOMOBILE MANUFACTURERS, Plaintiff, v. Dan A. GWADOSKY, et al, Defendants.
• Court: U.S. District Court — District of Maine

353 F.Supp.2d 97

ALLIANCE OF AUTOMOBILE MANUFACTURERS, Plaintiff, v.Dan A. GWADOSKY, et al, Defendants.

No. CIV.03-154-B-W.

United States District Court, D. Maine.

January 25, 2005.

Andrew J. Pincus, Mayer, Brown, Rowe & Maw, Washington, DC, Bruce W. Hepler, Friedman, Gaythwaite, Wolf & Leavitt, Harold J. Friedman, Friedman, Gaythwaite, Wolf & Leavitt, Portland, Russell R. Eggert, Mayer, Brown & Platt, Chicago, IL, for Alliance of Automobile Manufacturers, Plaintiff.

Francis E. Ackerman, Assistant Attorney General, Paul Stern, Assistant Attorney General, Augusta, ME, for Secretary of State, Maine, Attorney General, Maine, Defendants.

Michael Kaplan, Preti, Flaherty, Beliveau, Pachios & Haley, LLC, Portland, ME, for Maine Auto Dealers Association, Amicus.

ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

WOODCOCK, District Judge.

In 2003, the State of Maine enacted legislation creating the Maine Motor Vehicle Franchise Board(the "Board") to oversee compliance with state laws regulating the relationship between automobile manufacturers and their dealers.The Board consists of seven members: three motor vehicle dealers, one manufacturer, two members of the public, and a state employee chair.The Plaintiff is the Alliance of Automobile Manufacturers ("Alliance"), and as the name implies, it is a trade association of automobile manufacturers.¹To say Alliance does not like the new law is an understatement.²It has come to court to try and stop it.This Court earlier denied Alliance's request for a preliminary injunction against operation of the law, and the parties have now filed dispositive motions.In its order on the preliminary injunction, this Court ruled on nearly all of the parties' contentions, and it concludes, as to those issues, no further explanation is necessary.However, Alliance has raised a new issue: whether the composition of the Board, with its three to one weighting in favor of the dealers, constitutes a violation of due process.This Court rules the composition of the Board does not violate due process and GRANTS Defendants' Motion for Summary Judgment and DENIES Plaintiff's Motion for Summary Judgment.

I.FACTUAL BACKGROUND

The history of this case is recited in this Court's preliminary injunction order, Alliance of Automobile Manufacturers v. Gwadosky,304 F.Supp.2d 104(D.Me.2004).This Court adopts the facts in that order and discusses additional relevant facts below.

II.LEGAL STANDARD

Because this Court has considered the State's Statement of Material Facts, the State's Motion to Dismiss must be treated as a Motion for Summary Judgment.SeeFed.R.Civ.P. 12(b)("If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment....").Alliance has also moved for summary judgment in its favor.Summary judgment is proper where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."Fed.R.Civ.P. 56(c);see alsoVelez-Gomez v. SMA Life Assurance Co.,8 F.3d 873, 875(1st Cir.1993).

III.DISCUSSION

A.Section 10 of L.D. 1294

Alliance contends Section 10 violates the Commerce and Contract Clauses of the United States Constitution.Alliance raises the same arguments here as it did in its Motion for Preliminary Injunction, which this Court rejected.The additional memoranda and factual statements have failed to generate any genuine issues of material fact or legal issues not previously disposed of in the preliminary injunction order.³There is no reason to alter this Court's earlier conclusions regarding the constitutionality of Section 10.SeeYes for Life Political Action Comm. v. Webster,84 F. Supp 2d. 150, 151(D.Me.2000)(based on the summary judgment record, no reason to alter conclusions reached in the preliminary injunction order).Accordingly, the State is entitled to summary judgment on Alliance's claim that Section 10 violates the Commerce and Contract Clauses of the United States Constitution.

B.Section 12 of L.D. 1294

Alliance next contends the composition of the Board, established by Section 12 of L.D. 1294, violates the Due Process Clause of the United States Constitution.

1.The Composition of the Board

Section 12, codifiedat 10 M.R.S.A. § 1187, provides:

The [Board] ... is established for the purpose of enforcing the provisions of this chapter.

1.Membership.The board consists of 7 members:

A.Six members appointed by the Governor:

(1) Three members who are or have been franchised new motor vehicle dealers in the State of Maine;

(2) A member who is or has been an employee or representative of a franchisor; and

(3) Two members of the public; and

B.One member appointed by the Secretary of State who is not and has not been either a motor vehicle dealer or manufacturer representative and who is an attorney employed by the Secretary of State and assigned to the Bureau of Motor Vehicles.⁴

2.The Duties of the Board and its Statutory Procedures

The Board is charged with reviewing complaints alleging violations of the Motor Vehicle Franchise Law and levying civil penalties for violations of the law.10 M.R.S.A. § 1188(1), (3).It has the power to "conduct and use the same discovery procedures as provided in the Maine Rules of Civil Procedure,"id.§ 1189-A, such as to conduct a pre-hearing conference and to allow discovery, id.The Board has the power to hold hearings, id.§ 1189, and to issue orders, id.§ 1188(2).Its decisions must be in writing, id.§ 1188(2), and are subject to appeal to the Superior Court, id.§ 1189-B.If the appeal is on an issue of law, the superior court may not hear additional evidence and may not set aside the Board's decision, except for error of law.Id.§ 1189-B(1).If the appeal is on an issue of fact, the superior court must presume all findings of fact of the Board are correct, unless rebutted by clear and convincing evidence.Id.§ 1189-B(2).The appellant is entitled to trial by jury, but a copy of the Board's decision is admissible into evidence.Id.

The Board is given authority over "conduct governed by this chapter."Id.§ 1188(1).If the Board determines that a violation of the Motor Vehicle Franchise Law has occurred, it is empowered to impose a civil penalty of "not less than $1,000 nor more than $10,000 for each violation."Id.§ 1171-B(3).The chapter addresses such issues as limitations on establishing or relocating dealerships, id.§ 1174-A, the rights of family members to succeed to franchise ownership, id.§ 1174-C, product liability claims, id.§ 1175, reimbursement for warranty claims, id.§ 1176, written or oral agreements between manufacturers and franchisees, id.§ 1178, and termination of the franchise, id.§ 1179.In evaluating the amount of a civil penalty, the Board must consider a series of factors, including the seriousness of the violation and the economic damage to the public.Id.§ 1171-B(3).The law does not eliminate a party's right to file a civil action in a court of competent jurisdiction, but if the action "gives rise or could give rise to a claim or defense under this chapter," the action must be stayed, if within 60 days after the filing of the complaint or service of process, whichever date is later, a party files a complaint with the Board, asserting the claims or defenses under the chapter.Id.§ 1190-A.

3.Ripeness

This Court first addresses the State's assertion that Alliance's due process challenge to Section 12 is not ripe for judicial consideration because there is no actual proceeding before the Board and Alliance has not sought recusal under the Maine Administrative Procedure Act ("APA"), 5 M.R.S.A. § 9063.⁵Alliance, however, has mounted a facial challenge to Section 12, arguing by its terms, the law violates due process by depriving manufacturers of a "fair trial in a fair tribunal."SeeWithrow v. Larkin,421 U.S. 35, 46, 95 S.Ct. 1456, 43 L.Ed.2d 712(1975)(quotingIn re Murchison,349 U.S. 133, 136, 75 S.Ct. 623, 99 L.Ed. 942(1955));see alsoGibson v. Berryhill,411 U.S. 564, 579, 93 S.Ct. 1689, 36 L.Ed.2d 488(1973)(holding that those with substantial pecuniary interest in legal proceedings should not adjudicate those disputes).

Facial challenges to statutes or regulations are commonly ripe as of enactment.Yee v. City of Escondido, Cal.,503 U.S. 519, 534, 112 S.Ct. 1522, 118 L.Ed.2d 153(1992)(because petitioners' allegation "does not depend on the extent to which petitioners are deprived of the economic use of their particular pieces of property or the extent to which these particular petitioners are compensated, petitioners' facial challenge is ripe.").Purely legal or constitutional issues are generally fit for judicial adjudication, as they implicate no special agency expertise.See, e.g., Pennell v. City of San Jose,485 U.S. 1, 11-15, 108 S.Ct. 849, 99 L.Ed.2d 1(1988)(while "as applied" due process and equal protection challenge to rent control ordinance was not ripe because it required factual context that could only be developed during agency proceedings, facial attack presented purely legal issues and was ripe for adjudication).Moreover, the Supreme Court has reached the merits of a facial due process claim, as raised here, without questioning ripeness.See, e.g., Friedman v. Rogers,440 U.S. 1, 18, 99 S.Ct. 887, 59 L.Ed.2d 100(1979), reh'g denied,441 U.S. 917, 99 S.Ct. 2018, 60 L.Ed.2d 389(1979)(upholding the composition of the Texas Optometry Board against facial constitutional challenge).Thus, Alliance's facial challenge to Section 12 is ripe for judicial consideration.⁶

4.Due Process

Alliance asserts that manufacturers will be unable to receive a...