Opinion ID: 2710281
Heading Depth: 4
Heading Rank: 1

Heading: “Relevant market area” means

Text: (a) In a county that has a population of more than 150,000, the area within a radius of 9 miles of the site of the intended place of business of a proposed new vehicle dealer or the intended place of business of a new vehicle dealer that plans to relocate its place of business. For purposes of this section, the 9-mile distance is determined by measuring the distance between the nearest surveyed boundary of an existing new motor vehicle dealer's principal place of business and the nearest surveyed boundary line of the proposed or relocated new motor vehicle dealer's principal place of business. Nothing in the language of MCL 445.1566(1)(a) suggests the Legislature’s intent that the law apply retroactively. The Legislature “ ‘knows how to make clear its intention that a statute apply retroactively.’ ”29 In fact, it has done so with other provisions of the MVDA, which explicitly provide that they apply to pre-existing contracts.30 The 26 Id. at 570-571. 27 Id. at 571. 28 Id. 29 Brewer, 486 Mich at 56, quoting Frank W Lynch & Co, 463 Mich at 583. 30 MCL 445.1567(1)-(2), MCL 445.1568, and MCL 445.1570 each begin with the preface “Notwithstanding any agreement . . . .” 13 Legislature has even used specific retroactivity language when amending the MVDA.31 The Legislature’s silence regarding retroactivity in its amendment of the definition of “relevant market area” undermines any argument that MCL 445.1566 was intended to apply retroactively. That the Legislature provided for the law to take immediate effect upon its filing date—August 4, 2010—only confirms its textual prospectivity.32 The remaining factors in our retroactivity analysis require that we examine the amendment’s effect on existing contract rights. A statute’s relation to a prior event alone will not render the statute retroactive. Rather, we consider whether the statute “takes away or impairs vested rights acquired under existing laws, or creates a new obligation and imposes a new duty, or attaches a new disability with respect to transactions or considerations already past.”33 LaFontaine asserts that retroactivity is not at issue in this case merely because it invoked the anti-encroachment protection of the 2010 amendment after that amendment went into effect. However, this argument begs the retroactivity question, failing to recognize that retroactive application of the 2010 Amendment would “create a new liability in connection with a past transaction”34—namely, Chrysler’s 2007 31 See 1998 PA 456, codified at MCL 445.1582a, which provides: The 1998 amendments to this act that added this section apply to agreements in existence on the effective date of this section and to agreements entered into or renewed after the effective date of this section. 32 Brewer, 486 Mich at 56 (“[P]roviding a specific, future effective date and omitting any reference to retroactivity supports a conclusion that a statute should be applied prospectively only.”) (quotation marks and citation omitted). 33 Hughes v Judges’ Retirement Bd, 407 Mich 75, 85; 282 NW2d 160 (1979). 34 Hansen-Snyder Co v Gen Motors Corp, 371 Mich 480, 484; 124 NW2d 286 (1963). 14 Dealer Agreement with LaFontaine. Applying the 2010 Amendment’s nine-mile relevant market area to the parties’ 2007 agreement would impose on Chrysler the new obligation of meeting the rigorous “good cause” standard in an action for declaratory relief under MCL 445.1576(3). Chrysler did not bargain for or contemplate this obligation at the time of its 2007 Dealer Agreement with LaFontaine, when the MVDA imposed only a relevant market area of six miles. Rather, Chrysler had the settled expectation at the time of its 2007 agreement that it could establish a like-line dealership anywhere outside a six-mile radius of LaFontaine’s place of business. Because Chrysler explicitly reserved its right to establish such dealerships within LaFontaine’s “Sales Locality” as refered to in the 2007 Dealer Agreement, Chrysler’s right is contractual in nature, limited only by LaFontaine’s statutory anti-encroachment rights in the MVDA’s relevant market area provision.35 Accordingly, retroactive application of the 2010 Amendment would not merely “operate in furtherance of a remedy or mode of procedure,” and therefore cannot be characterized as remedial or procedural.36 Rather, the expansion of the relevant market area creates substantive rights for dealers that had no prior existence in law or contract, and diminishes a manufacturer’s existing rights under contracts executed before the 2010 Amendment. Application of the 2010 Amendment would give LaFontaine the substantive right to object where it previously could not—that is, the right to object to a proposed like-line dealership more 35 See Dale Baker Oldsmobile, Inc v Fiat Motors of North America, Inc, 794 F2d 213, 220 (CA 6, 1986) (rejecting dealer’s argument that manufacturer’s rights under dealer agreement were statutory rather than contractual). 36 Frank W Lynch & Co, 463 Mich at 584 (quotation marks and citation omitted). 15 than six, but less than nine miles away.37 Because retroactive application of the 2010 Amendment would interfere with Chrysler’s contractual right to establish dealerships outside of a six-mile radius of LaFontaine, such retroactive application is impermissible on these facts.38 Accordingly, the relevant market area in effect when Chrysler reached its 2007 Dealer Agreement with LaFontaine governs that agreement. Our conclusion is consistent with the recent interpretation of this exact amendment of the MVDA by the United States Court of Appeals for the Sixth Circuit. In Kia Motors,39 the Sixth Circuit upheld a manufacturer’s right, after the effective date of the 2010 Amendment, to establish a new like-line dealership approximately seven miles from an existing dealership.40 In doing so, the Sixth Circuit relied on the Kia-Glassman Dealer Agreement, which, like the 2007 Chrysler-LaFontaine Dealer Agreement here, predated the 2010 Amendment.41 37 See Hansen-Snyder Co, 371 Mich at 484 (presumption against retroactivity is “especially true when giving a statute retroactive operation will . . . create a new liability in connection with a past transaction, or invalidate a defense which was good when the statute was passed”). 38 See Byjelich v John Hancock Mut Life Ins Co, 324 Mich 54, 61; 36 NW2d 212 (1949) (“A statute cannot be retroactive so as to change the substance of a contract previously entered into.”). 39 Kia Motors America, Inc v Glassman Oldsmobile Saab Hyundai, Inc, 706 F3d 733 (CA 6, 2013). 40 Id. at 736-737. 41 Id. at 740-741. 16 Applying Michigan retroactivity law, the Sixth Circuit concluded that the 2010 Amendment did not apply retroactively.42 The 2010 Amendment was silent as to retroactivity, and hence bore “no clear legislative intent that the Amendment should be applied retroactively.”43 Moreover, Kia’s rights under its preexisting Dealer Agreement with Glassman were vested rights, as they were contractual rather than statutory.44 Finally, the Sixth Circuit held that the amendment “[c]learly . . . imposes a new substantive duty and provides a new substantive right that did not previously exist,” and therefore was not procedural or remedial.45 The Sixth Circuit recognized the retroactivity issue presented by these circumstances, contrary to the Court of Appeals below, which undertook no retroactivity analysis whatsoever. We find the Sixth Circuit’s analysis and application of Michigan law persuasive. Accordingly, we hold that the pre-amendment six-mile radius that was in effect at the time Chrysler and LaFontaine entered into their 2007 Dealer Agreement governs that agreement such that Chrysler need not show good cause for the establishment of IHS’s proposed dealership location.