CC&O successfully defended Ford Motor Company in a longstanding 13-year dispute

June 2019

James M. Campbell, Michelle I. Schaffer, and Curtis A. Berglund of Campbell Conroy & O’Neil, P.C.; Daniel L. Rosenthal of Marcus Clegg; and Jessica L. Ellsworth of Hogan Lovells successfully defended Ford Motor Company in a longstanding 13-year dispute in which a dealership in Maine sought to make a generous dealer incentive program a permanent part of its franchise.

The latest stage of this dispute commenced in 2017 before the Maine Motor Vehicle Franchise Board when the dealer filed a Protest contesting whether Ford had “good cause” to modify its franchise agreement. The proposed modification was to terminate a dealer incentive program that had ended for all other dealers in 2005, but which was determined in previous litigation to have become part of this dealer’s franchise. The Board did not allow Ford to present evidence prior to 2014, which prevented Ford from explaining why it ended the nationwide program in 2005 or the circumstances and industry conditions at that time.  The dealer argued that the incentive program payments were a contractual obligation due under its franchise and ending the incentive payments would harm its return on investment.  Ford argued that the program had to end in order to avoid giving the dealer an unfair competitive advantage as the sole beneficiary of a defunct program and that it was in the public interest to maintain a level playing field for all dealers in the State.

After closing arguments the 5-member Board openly deliberated the case before the parties.  The Board ruled by a 4-1 margin that Ford had met its burden of proof and had good cause to end the payments.