Court Opinion

ID: 4969547
Source: CourtListenerOpinion
Date Created: 2021-09-24 16:53:36.464922+00
Date Added: 2024-06-11T08:16:30.169278
License: Public Domain

DISSENTING OPINION
BY Judge SIMPSON.
I respectfully dissent. For both standard-of-review and fairness reasons I would affirm the order of the State Board of Vehicle Manufacturers, Dealers & Salespersons (Board) which granted in part the protest of Neiman’s Garage and Equipment, Inc. (Existing Dealer) and ordered Arctic Cat Sales, Inc. (Distributor) to temporarily withdraw the appointment of a new competing dealer for all-terrain vehicle (ATV) sales.
First, I disagree with the Majority over the Board’s determination that the appointment of the new dealer could imperil competition in the market, which Existing Dealer currently shares with a “big box” retailer, Bass Pro Shops. It is undisputed that soon after Bass Pro Shops entered the market, another dealer dropped its ATV franchise with Distributor. From this historical record, the Board predicted that the establishment of an additional dealer now would mean that at least one dealer would leave the market.
As fact-finder, the Board is allowed to draw reasonable inferences from such circumstances. The Board’s determinations are due deference, and our appellate review should afford the party prevailing before the Board every reasonable inference. By quibbling over the language used, by positing inferences other than the one drawn by the fact-fínder, and by seeking inferences unfavorable to the prevail-^ ^ the strays from the aPProPriate standard of review-
Second, I am very concerned with what the Board viewed as a fairness issue. In its adjudication, the Board wrote:
[Distributor] also offered evidence and argues that [Existing Dealer] was in violation of the franchise agreement. In support of this contention, [Distributor] noted that for several years [Existing Dealer] has not represented the Prowler product line. In addition, [Distributor] showed that [Existing Dealer] does not fully use co-op advertising funds that are available. [Existing Dealer] also appears to be confused about requirements versus recommendations for purchasing inventory on the floor plan, and [Distributor] offered evidence that [Existing Dealer] is not one of its best performing dealerships. See Respondent’s Exhibit B.
To the extent that [Distributor] considers [Existing Dealer’s] performance to be deficient, the establishment of an additional dealership in the same relevant market area is certainly not [Distributor’s] only option. Indeed, the franchise agreement expires in March 2015 and, within the confines of the [Board of Vehicles Act1 (BVA) ], [Distributor] may consider whether to extend [Existing Dealer’s] franchise or not. The establishment of an additional dealer in a geographic market that may not be able to support two dealers is not *254an appropriate remedy for an existing dealership that underperforms.
Bd. Op., 6/10/14, at 40-41, Reproduced Record (R.R.) at 260A-61A (emphasis added).
To explain the Board’s statement about an inappropriate remedy, reference is made to Sections 13 and 27 of the BVA, 63 P.S. §§ 818.13, 818.27. Under the latter provision, which allows existing dealers to protest the addition of a new dealership in the relevant market area and which was operative in this case, the burden of proof is on the existing dealer. Krebs Chrysler-Plymouth, Inc. v. State Bd. of Vehicle Mfrs., Dealers & Salespersons, 655 A.2d 190 (Pa.Cmwlth.1995). In contrast, under the provisions applicable to the termination or failure to renew an existing franchise, the burden of proof is on the distributor. Section 13(e) of the BVA, 63 P.S. § 818.13(e).
I share the Board’s concern that Distributor was using the addition of a new competing ATV franchise as a stealth squeeze on a small, underperforming existing dealer under more favorable administrative rules than would attach to a straightforward refusal to renew a franchise agreement. I also agree with the Board’s June 2014 incremental decision, which resolved this “fairness” concern and took into consideration the limited time before Existing Dealer’s franchise agreement was due for renewal in March 2015:
Therefore, the Board reasons that a more prudent, pro-consumer approach is to permit [Distributor’s] appointment of [Existing Dealer] as a dealer of the Wildcat product, which would offer an incremental increase in consumer options and price competition. In the remaining period of [Existing Dealer’s] franchise agreement [Distributor] may evaluate [Existing Dealer’s] performance, including its representation of the full Arctic Cat product line, as well as the changes in market share. At a future point the growth of Arctic Cat’s brand may support a rational, data-driven change in the dealership network in the five county South Central Pennsylvania region, which may or may not include [new ATV dealer] or [Existing Dealer], In consideration of [Existing Dealer’s] substantial investment in the Arctic Cat franchise, its presence as a warranty service facility, and the opportunity for measured, incremental change to the dealership network that would promote greater long-term competition to benefit consumers, the Board determines that there is good cause not to permit the establishment of an additional Arctic Cat dealer in the ... market area at this time.
Bd. Op. at 44-45, R.R. at 264A-65A (emphasis added). Unfortunately, the Majority does not address the “fairness” issue or the Board’s incremental approach at all.
In essence, the Board invited revisiting the matter in 10 months, when Existing Dealer’s franchise agreement expires. In the meantime, the Board encouraged the parties to gather evidence of market share and dealer performance. I discern neither error of law nor abuse of discretion in this temporary, measured approach.
For both of these reasons, I respectfully dissent. I would affirm the Board.

. Act of December 22, 1983, P.L. 306, as amended, 63 P.S. §§ 818.1-818.37.