This article was published in Crain’s Detroit Business. Click here to read the full article.

Local dealerships Livonia Chrysler Jeep Inc., Fox Hills Chrysler Jeep and Village Chrysler Jeep could reopen more than five years after a Chrysler Group LLC decision to close them, after the dealers gained a key victory at a federal appeals court.

The 6th U.S. Circuit Court of Appeals has found that a federal law creating the arbitration process where those dealers prevailed trumps state laws that would allow nearby competitors to legally challenge their return. The court also found that the dealers had not proven their letters of intent to return to the network were not the “customary and usual” letters to dealers from Chrysler.

At issue is a federal arbitration process in 2010 where dealers could challenge Chrysler’s decision to terminate 789 dealers as part of bankruptcy reorganization, reducing its dealer count to about 2,400. Some 32 dealers, including five in Michigan, won reinstatement following arbitration hearings, but lawsuits followed over what that victory actually meant.

“Our understanding is the dealers (in the appeal) will all be able, if they can satisfy the conditions in their letters of intent (from Chrysler), to go back and be part of what’s now the Fiat Chrysler Automobiles dealership body,” said Eric Bowden, principal at Bloomfield Hills-based Colombo & Colombo PC, who represented Fox Hills in Plymouth, Village in Royal Oak and Jim Marsh Chrysler Jeep in Las Vegas.

To learn more about this case please contact a member of the firm’s Dealer Practice Group at 248-645-9300 or by email.

Chuck LeFevre, Chair – [email protected]
Lawrence F. Raniszeski – [email protected]
Michael J. O’Shaughnessy – [email protected]
Eric R. Bowden – [email protected]
Alycia Pallach Wesley – [email protected]
Coriann Gastol – [email protected]