Opinion ID: 819854
Heading Depth: 3
Heading Rank: 3

Heading: Glassman’s Statutory Argument

Text: Having determined that the Agreement does not incorporate the 2010 Amendment, we turn next to Glassman’s statutory argument. We must decide whether the 2010 Amendment operates retroactively to change Kia’s obligations under the Agreement. We conclude that it does not. In Michigan, the question of whether a statute should be applied retroactively or only prospectively is a question of legislative intent. Frank W. Lynch & Co. v. Flex Technologies, Inc., 624 N.W.2d 180, 182 (Mich. 2001). But there is a presumption that statutes operate only prospectively “unless the contrary intent is clearly manifested.” Id. (quotation omitted). This presumption holds “especially true if retroactive application of a statute would impair vested rights, create a new obligation and impose a new duty, or attach a disability with respect to past transactions.” Id. The Michigan Supreme Court has repeatedly observed that the Michigan Legislature “knows how to make clear its intention that a statute apply retroactively,” so the absence of express retroactive language is a strong indication that the Legislature did not intend a statute to apply retroactively. See Brewer v. A.D. Transport Express, Inc., 782 N.W.2d 475, 478 (Mich. 2010) (quoting Frank W. Lynch & Co., 624 N.W.2d at 183). The “requirement that the No. 12-1202 Kia Motors America v. Glassman Page 8 Legislature make its intention clear” “is especially true when a new statutory provision affects contractual rights, an area ‘in which predictability and stability are of prime importance.’” Frank W. Lynch & Co., 624 N.W.2d at 184 (quoting Landgraf v. USI Film Prod., 511 U.S. 244, 271 (1994)). There is an exception to the presumption against retroactivity when a statute can be classified as remedial or procedural. Id. at 183. “[S]tatutes which operate in furtherance of a remedy or mode of procedure and which neither create new rights nor destroy, enlarge, or diminish existing rights are generally held to operate retrospectively unless a contrary legislative intent is manifested.” Id. (quotation omitted). Although Michigan courts describe the exception as encompassing laws that are either remedial or procedural, in this context the terms essentially mean the same thing—laws that are procedural in nature and do not create or destroy substantive rights. See id.; see also Dale Baker Oldsmobile, Inc. v. Fiat Motors of North America, Inc., 794 F.2d 213, 217 (6th Cir. 1986) (“[R]emedial statutes involve procedural rights or change the procedures for effecting a remedy. They do not, however, create substantive rights that had no prior existence in law or contract.”). We have previously determined that another section of the Motor Dealers Act operates prospectively only. See Dale Baker Oldsmobile, 794 F.2d at 219-20. In Dale Baker Oldsmobile, the issue was whether a section that expanded a dealer’s rights upon the termination of a dealer agreement applied retroactively to contracts executed before the enactment of the statute. Id. at 215. Among other things, the new section required the manufacturer to pay the dealer an amount equal to one year’s rental value of the dealership premises. Id. After reviewing several Michigan cases dealing with issues of retroactivity, we concluded that the new section would impose substantive duties on the manufacturer and award substantive rights to the dealer and thus should not be applied retroactively. Id. at 219-20. No. 12-1202 Kia Motors America v. Glassman Page 9 The 2010 Amendment is silent as to whether it operates retroactively or only prospectively.5 There is thus no clear legislative intent that the Amendment should be applied retroactively. The only remaining question, then, is whether the exception for procedural or remedial laws applies. In other words, is the 2010 Amendment substantive? Glassman argues that the 2010 Amendment is procedural because it constituted a “minor change” to the definition of “relevant market area” and “did not impose any new legal duties on Kia that had not already existed in the prior version nor did it create new substantive rights for an existing dealer, such as Glassman.” Appellant Br. 32, 37. For support, it cites a decision from the Michigan Supreme Court in which that court held that an amendment to the Mechanics’ Lien Act extending the time for filing a lien from 60 days to 90 days was procedural and thus applied retroactively. See HansenSnyder Co. v. Gen. Motors Corp., 124 N.W.2d 286, 288 (Mich. 1963). The court reasoned that since the right to acquire a lien was not affected, the only change “pertained solely to [the] procedure for effectuating the statutory right already existing.” Id. But the amendment in Hansen-Snyder is not analogous to the 2010 Amendment. Before the Amendment, the statute allowed Kia to establish a new dealer more than six miles from Glassman without restriction. After the Amendment, Kia must provide notice before doing so, and that notice allows Glassman to bring a declaratory judgment action to protest the new dealer. Clearly, the Amendment imposes a new substantive duty and provides a new substantive right that did not previously exist. Rather than change the mechanics or time frame for objecting to a new dealer, the Amendment gives Glassman the substantive right to object. Therefore, it cannot be viewed as procedural, and the presumption against retroactivity applies. 5 In an amendment to another section of the Act, enacted on the same day as the 2010 Amendment, the Legislature explicitly provided that the amendment would apply to dealer agreements in existence on the effective date of the amendment. See 2010 Mich. Pub. Act No. 141 (codified at Mich. Comp. Laws § 445.1574(1)(x)). No. 12-1202 Kia Motors America v. Glassman Page 10 Before leaving the issue of retroactivity we must briefly dispose of Glassman’s two remaining arguments, both of which are similar to arguments we have rejected in previous opinions. First, Glassman disputes that a retroactivity issue even exists in this case. Since Kia sought to establish the new dealer after the 2010 Amendment, argues Glassman, requiring Kia to comply with the Amendment would require applying it prospectively only. However, this argument ignores the fact that the Amendment affects Kia’s rights under a contract that predates the Amendment, and we therefore rejected it in a prior case. See Bob Tatone Ford, Inc. v. Ford Motor Co., 197 F.3d 787, 792 (6th Cir. 1999) (applying Ohio law). A statute operates retroactively when it “‘takes away or impairs vested rights acquired under existing laws.’” Landgraf, 511 U.S. at 269 (quoting Soc’y for Propagation of the Gospel v. Wheeler, 22 F. Cas. 756, 767 (No. 13,156) (C.C.D.N.H. 1814) (Story, J.)). To require Kia to comply with the 2010 Amendment would clearly require us to apply the Amendment retroactively because it would take away Kia’s previously unrestricted contractual right to establish a new dealer more than 6 miles from Glassman. See Dale Baker Oldsmobile, 794 F.2d at 219-20 (indicating that a statute would operate retroactively if it impacted a pre-existing contract, even though the conduct it regulated post-dated the statute); Byjelich v. John Hancock Mut. Life Ins. Co., 36 N.W.2d 212, 215 (Mich. 1949) (same).6 Second, Glassman disputes that Kia has a vested contractual right that would be affected by the 2010 Amendment. It argues that Kia’s right to establish a new dealer was just a statutory right, which according to Glassman is not a vested right. But this argument ignores the Agreement, and we have rejected it before. See Dale Baker Oldsmobile, 794 F.2d at 220 (“This argument ignores the fact that defendant acquired contract rights at the time the parties entered the dealer agreement.”). The Agreement expressly gave Kia the right to establish new dealers. Since in 1998 the law only restricted Kia’s right to establish new dealers within 6 miles of Glassman’s location, Kia 6 Glassman cites two cases from the Michigan Court of Appeals for this point, neither of which are persuasive or merit discussion. We have already declined to follow the approach taken in Anderson’s Vehicle Sales, Inc. v. OMC-Lincoln, 287 N.W.2d 247 (Mich. Ct. App. 1979). See Dale Baker Oldsmobile, 794 F.2d at 218. The issue in LaFontaine Saline Inc. v. Chrysler Group LLC, No. 307148, 2012 Mich. App. Lexis 2378 (Mich. Ct. App. Nov. 27, 2012) was whether a letter of intent qualifies as a dealer agreement, and the court never addressed a potential retroactivity issue. No. 12-1202 Kia Motors America v. Glassman Page 11 had an unrestricted contractual right to establish new dealers outside that radius. Clearly the 2010 Amendment would affect that contractual right because it would require Kia to give Glassman notice.