General GMC Trucks, Inc. v. General Motors Corp., GMC Truck and Coach Division

Decision Date23 June 1977
Docket NumberNos. 32251,32252,s. 32251
Citation237 S.E.2d 194,239 Ga. 373
PartiesGENERAL GMC TRUCKS, INC. v. GENERAL MOTORS CORPORATION, GMC TRUCK AND COACH DIVISION. GENERAL GMC TRUCKS, INC. v. TRADE CITY GMC, INC.
CourtGeorgia Supreme Court

Smith, Cohen, Ringel, Kohler & Martin, John A. Blackmon, Kenneth L. Millwood, Atlanta, for appellant.

King & Spalding, Byron Attridge, James D. Miller, Atlanta, Frazer F. Hilder, Robert W. Culver, Detroit, Mich., Cochran, Camp & Snipes, H. G. Snipes, Smyrna, for appellees.

Arthur K. Bolton, Atty. Gen., Robert S. Stubbs, II, Executive Asst. Atty. Gen., Richard L. Chambers, First Asst. Atty. Gen., H. Perry Michael, Senior Asst. Atty. Gen., R. Douglas Lackey, Asst. Atty. Gen., Redfern, Butler & Morgan, Stephen E. Raville, Gerald L. Baxter, Atlanta, Vaughn, Barksdale & Nation, Clarence R. Vaughn, Robert W. Maddox, Conyers, for amici curiae.

Robert W. Maddox, Conyers, amici curiae.

UNDERCOFLER, Presiding Justice.

These suits involve the Motor Vehicle Franchise Practices Act of 1974, Ga.L.1974, p. 134, Code Ann. chapter 84-66, and the Motor Vehicle Farm Machinery Practices Act of 1976, Ga.L.1976, p. 1440, Code Ann. chapter 84-66 (Supp.1976). The 1976 Act states the 1974 Act is repealed.

Among other things both of these Acts require a state license before engaging in business as a manufacturer's franchised truck dealer. Whether the license should be issued is determined by a commission established by the Acts. 1

This litigation arose when General Motors Corporation franchised Trade City GMC, Inc., to sell "series 9500" heavy duty trucks. Trade City is located in Cobb County and previously had been franchised to sell other types of motor vehicles. General GMC Trucks, Inc., objected to the issuance of a license to Trade City to sell heavy duty trucks. General GMC Trucks is located in Fulton County. The franchised territory for heavy duty trucks for both dealers was substantially the same.

General GMC Trucks filed its objection in 1975. Before the commission entered its order the 1974 Act was repealed by the 1976 Act. Thereafter the commission concluded that the 1976 Act was a substantial re-enactment of the 1974 Act and that in fact the 1974 Act was not repealed. On the merits the commission denied Trade City a license under the provisions of both Acts. Upon appeal the superior Court reversed and held certain portions of the 1976 Act unconstitutional. This appeal followed. At the outset we point out that the constitutionality of the entire 1976 Act is not in issue in this appeal but only Code Ann. § 84-6604(a) (Supp.1976) dealing with the composition of the commission and Code Ann. § 84-6610(f)(10) (Supp.1976) providing certain requirements for the issuance of a franchise dealer's license.

1. Was the 1974 Act repealed? The superior court held the 1974 Act was repealed by the 1976 Act and reversed the Commission's finding to the contrary. We affirm. Without belaboring the issue our review of the two Acts convinces us that the 1976 Act is not such a substantial re-enactment of the 1974 Act so that it is not effectively repealed. The 1976 Act states it comprehensively revises the motor vehicle dealer franchises law and specifically repeals the 1974 Act. In our opinion it did just that. General GMC Trucks' right to challenge the issuance of a license under the 1974 Act has been extinguished. Furthermore, we can not conceive what vested rights an objector acquires under a licensing statute but we are satisfied that General GMC Trucks has none here. We do, however, recognize that its challenge under the 1976 Act before issuance of a license to Trade City was timely under the circumstances.

2. Is the composition of the Georgia Franchise Practices Commission unconstitutional? The trial court held that the commission membership as prescribed by the 1976 Act (Code Ann. § 84-6604(a) (Supp.1976)) violates due process because it is not a fair and impartial tribunal. The commission is composed of nine members, five of whom must be franchised dealers. The trial court apparently reasoned that the commission must necessarily be prejudiced in favor of franchised dealers because franchised dealers comprise a majority of the commission. We do not agree and reverse this ruling of the trial court.

The mere fact that a majority of the commission members are franchised dealers is not in itself dispositive of the issue. It is a common and acceptable practice to appoint members of a profession, business or trade to oversee the practices of that group. See generally Title 84. Members of a commission are presumed to be fair and impartial. Withrow v. Larkin, 421 U.S. 35, 95 S.Ct. 1456, 45 L.Ed.2d 712 (1975); United States v. Morgan, 313 U.S. 409, 61 S.Ct. 999, 85 L.Ed. 1429 (1941). General Motors Corporation and Trade City have failed to overcome that presumption. Therefore, we conclude that the trial court erred in holding that the commission was per se 2 unconstitutional. In so ruling, we are not unmindful of Wall v. American Optometric Association, Inc., 379 F.Supp. 175 (N.D.Ga.1974) (3-judge court), aff'd. mem. sub nom. Wall v. Hardwick, 419 U.S. 888, 95 S.Ct. 166, 42 L.Ed.2d 134 (1974), urged by Trade City and General Motors Corporation. We, however, find that case distinguishable on its facts 3 and thus inapposite here.

3. Does the 1976 Act burden interstate commerce? The trial court held that Code Ann. § 84-6610(f)(10) (Supp.1976) was unconstitutional under the commerce clause of the U.S. Constitution. We agree. That section provides that the commission may deny a license as a franchised dealer if the manufacturer, " has evidenced his intent to grant an additional franchise for any line-make of motor vehicle, construction equipment or farm machinery, in any community or territory where a franchised dealer of the same line-make of motor vehicle, construction equipment or farm machinery is complying with the terms of his franchise or selling agreement unless the manufacturer, distributor, wholesaler, or their branches or representatives can demonstrate that such franchised dealer is not providing adequate representation in the community or territory or that the addition of another dealer can be accomplished without causing a reduction in the business of the existing dealer . . .."

It is axiomatic that a state may not regulate interstate commerce even in the absence of federal legislation unless Congress so consents. Bowman v. Chicago and Northwestern Railway Co., 125 U.S. 465, 8 S.Ct. 1062, 31 L.Ed. 700 (1887). The practical effect of this section of the 1976 Act is a limitation on the number of dealers to which General Motors may market its cars for retail sales and thereby creates an undue burden on interstate commerce. U.S. Constitution, Art. I, § 8.

There can be no question but that the regulation limiting the available market for General Motors products imposes a burden on interstate commerce. See e.g. Milk Control Board v. Eisenberg, 306 U.S. 346, 59 S.Ct. 528, 83 L.Ed. 752 (1938); General Motors Corp. v. Blevins, 144 F.Supp. 381 (D.Colo. 1956) (3 judge court). However, it is equally clear that "where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits." Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847, 25 L.Ed.2d 174 (1970).

The state may regulate under the police power where the health, safety and welfare of its citizens are at stake. The United States Supreme Court has recognized the "broad power in the State to protect its inhabitants against perils to health or safety, fraudulent traders and highway hazards, even by use of measures which bear adversely upon interstate commerce." Hood & Sons v. Du Mond, 336 U.S. 525, 531-32, 69 S.Ct. 657, 662, 93 L.Ed. 865 (1949).

The courts of Georgia, however, though broadly construing the police power, have traditionally limited the power of the state to regulate private business. For example in Grayson-Robinson Stores, Inc. v. Oneida Ltd., 209 Ga. 613, 75 S.E.2d 161 (1953), the Georgia Fair Trade Act, Ga.L.1937, p. 800, was held to violate the supremacy and commerce clauses as well as due process. A later fair trade act, Ga.L.1953, p. 549 (Nov.-Dec.Sess.), was also invalidated in Cox v. General Electric Corp., 211 Ga. 286, 85 S.E.2d 514 (1955). The state's attempt to fix milk prices through a Milk Control Board, under the Milk Control Act, Ga.L.1937, p. 247; Ga.L.1952, p. 55, was struck down under the due process clause as restricting the freedom to contract. Ward v. Big Apple Super Markets, Inc., 223 Ga. 756 158 S.E.2d 396 (1967); Harris v. Duncan, 208 Ga. 561, 67 S.E.2d 692 (1951). Similarly, the Unfair Cigarette Sales Act, Ga.L.1949, p. 695, in Williams v. Hirsch, 211 Ga. 534, 87 S.E.2d 70 (1955), was held unconstitutional. Compare, City of Calhoun v. North Georgia Electric Membership Corp., 233 Ga. 759, 213 S.E.2d 596 (1975) (electric membership); Wilder v. State, 232 Ga. 404, 207 S.E.2d 38 (1974) (billiards); Holcomb v. Johnston, 213 Ga. 249, 98 S.E.2d 561 (1957) (dental appliances); Lamons v. Yarbrough, 206 Ga. 50, 55 S.E.2d 551 (1949) (dental hygienists), where the regulations have been upheld as affecting the public interest and thus proper subjects of legislation under the police power.

The section of the Automobile Franchise Practices Act called into constitutional question (Code Ann. § 84-6610(f)(10) (Supp.1976)) permits the Franchise Practices Commission to deny, suspend or revoke a license where a manufacturer seeks to grant another franchise in the same community or territory as an existing dealer, who is in compliance with his franchise, unless the manufacturer can show that the dealer is not providing adequate representation or that a new dealer can be...

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