Court Opinion

ID: 9518676
Source: CourtListenerOpinion
Date Created: 2023-08-07 00:58:43.433571+00
Date Added: 2024-06-11T12:29:47.434005
License: Public Domain

CADY, Justice,
dissenting.
I respectfully dissent.
Section 322A.11 exists to protect the franchiser, franchisee, and the consumer. See Comment, Public Interest and the Iowa Motor Vehicle Franchisers Act, 56 Iowa L.Rev. 1060, 1060-61 (1971). The majority, however, has interpreted the statute to primarily protect motor vehicle companies and franchisers.
Section 322A.11(2) makes it clear that change in ownership of a franchise may not constitute good cause for the termination of the franchise unless the change in ownership “will be substantially detrimental to the distribution of franchiser’s motor vehicles in the community.” Iowa Code § 322A.11(2). This is a very broad standard based on the adverse impact of the change in ownership on the distribution of vehicles in the community served by the franchise.
In my mind, this standard requires a broad inquiry to properly consider the diverse interests that necessarily accompany a decision to terminate a franchise. These interests are not solely confined to the manufacturer, but include the franchisee as well as the local consumer. By permitting the standard to be satisfied by a single threshold standard utilized by the manufacturer — consumer satisfaction ratings — the majority has narrowed this broad legislative standard to protect only the interests of the manufacturer and has permitted corporate decision-making geared towards the purpose of making a profit to trump other considerations geared toward the interests of consumers and local franchisees. As a matter of law, I would conclude the single reason offered by the franchiser in this case to terminate the franchise was insufficient.