Court Opinion

ID: 9579284
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:53:18.440925+00
Date Added: 2024-06-11T13:35:25.092592
License: Public Domain

Judge MARTIN (Robert M.),
dissenting.
I dissent from the majority opinion and find support for my dissent in Georgia Franchise Practices v. Massey-Ferguson, 244 Ga. 800, 262 S.E. 2d 106 (1979).
In that case, the Georgia Supreme Court considered the constitutionality of certain provisions of the Motor Vehicle, Farm Machinery and Construction Equipment Franchise Act. It found Ga. Code § 84-6610(a)(4) (Supp. 1979), very similar to our N.C. Gen. Stat. § 20-305(5) (1978), unconstitutional, as it violated the Georgia Constitution’s prohibition against contracts and agreements which diminish competition or encourage monopolies. Ga. Const., Art. Ill, § 8, par. 8. The Georgia court recognized that “the clear purpose of these sections is to permit franchised dealers to restrict competition and create a monopoly in the retail sale of motor vehicles. The provisions permit the establishment of a market allocation among franchised dealers and thereby prevent any competition between dealers and companies in the sale of the same line-make equipment.” 244 Ga. at 801, 262 S.E. 2d at 107-08.
Because the North Carolina Constitution also contains an anti-monopoly clause, this court, like the Georgia Supreme Court, should find N.C. Gen. Stat. § 20-305(5) unconstitutional, as it encourages monopolies “contrary to the genius of a free state.” N.C. *691Const., Art. I, § 34. The curtailment of monopolies created by statute is not new to North Carolina. In 1972 our Supreme Court held unconstitutional a North Carolina statute requiring a certificate of need in order to construct and operate a private hospital, because it encouraged the creation of monopolies in the medical facilities industry. In re Hospital, 282 N.C. 542, 193 S.E. 2d 729 (1979). I see no reason why the analysis of the automobile dealership industry should be treated any differently than the analysis of “the practice of the healing arts and . . . operation of institutions for that purpose.” 282 N.C. at 549, 193 S.E. 2d at 734. The fact that it is “the common experience in America that competition is an incentive to lower prices, better service and more efficient management” applies equally to private automobile dealerships and private hospitals. 282 N.C. at 549, 193 S.E. 2d at 734. The court in In re Hospital recognized this similarity stating that “[w]hile in many respects a hospital is not comparable to an ordinary business establishment, we know of no reason to doubt its similarity thereto in response to the spur of competition.” 282 N.C. at 549, 193 S.E. 2d at 734.
While the majority is correct in pointing out that “[w]e are not dealing with an agreement between competitors not to compete” but are instead concerned only with the manufacturer-dealer contract, it is difficult to discern how the resulting monopolies can be distinguished. Both are equally injurious to competition and its resulting consumer benefits, and the discouragement of intrabrand, as well as interbrand, competition has been prohibited by N.C. Const., Art. I, § 34.
I, like the Georgia Supreme Court, have been unable to discover the public interest being protected by § 20-305(5) and justifying this exercise of the State’s police power. See 244 Ga. at 802, 262 S.E. 2d at 108. But I am content to rest my dissent on the thesis that the “laws may not be procured by men already engaged in an occupation in order to keep others out. The exclusion of others from a common right is a prominent feature of monopolistic action forbidden by our fundamental law.” State v. Warren, 252 N.C. 690, 693, 114 S.E. 2d 660, 664 (1960).