January-2014-04 - Greater Cincinnati Automobile Dealers Association


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OADA – Link to Original Article

OADA and four central Ohio dealers filed suit against the Ohio Bureau of Motor Vehicles and Tesla Motors Inc. on December 11th, 2013. The suit, filed in the Franklin County Court of Common Pleas, alleges that the BMV allowed a manufacturer of motor vehicles to obtain a new motor vehicle dealer license in violation of Ohio’s licensing statutes. We are asking the court to grant both a preliminary and permanent injunction to revoke any license improperly issued and prevent further licenses from being issued.

Ohio law distinguishes the roles of a motor vehicle dealer and a motor vehicle manufacturer. Our law defines a new motor vehicle dealer as “any person engaged in the business of selling at retail, displaying, offering for sale or dealing in new motor vehicles pursuant to a contract with the manufacturer or distributor”. A manufacturer is defined as “a person who manufacturers, assembles, or imports motor vehicles…” Can a manufacturer be both a dealer and a manufacturer? No. Ohio law states that “An applicant for a new motor vehicle dealer license must provide the BMV with a contract between the applicant and the manufacturer.” One of the most basic principles of law is that a party can’t contract with itself.

As this litigation unfolds, we will provide additional information.

Additionally, we will soon introduce legislation to clarify that Ohio law prevents a manufacturer from obtaining a license to sell motor vehicles without contracting with an independent dealer. OADA will notify dealers when the legislation is formally introduced. This legislation will no doubt be mischaracterized as an attempt to change the law and stifle competition. Nothing could be further from the truth, which is why dealer grassroots efforts with legislators will be vital to our success.

To help sort fact from fiction, we’ve included some Q&A at the top of this alert that you might find helpful in discussions with your legislators, media, or others.


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