SKV Wins Precedent-Setting Case for Automotive Franchise


On November 3, 2016 the 9-member Board of the Texas Department of Motor Vehicles voted 6-3 to reverse an Administrative Law Judge’s decision that Hyundai Motor America had not discriminated unreasonably against World Car Hyundai in allocating cars to the dealerships.  

The dealer, which maintains a family of auto dealerships in San Antonio, was the victim of discretionary allocations by Hyundai Motor America over a 3-year period that resulted in the nearest Hyundai competitors receiving thousands more cars to sell, during a period in which Hyundai vehicles were “hot” and in high demand.  Allocation is a particularly sensitive issue in the manufacturer-dealer relationship and the manufacturer’s discretion is almost universally unchallenged in legal proceedings.  After a five-day trial in which the differential treatment was unquestioned, but various excuses offered, the Administrative Law Judge denied relief in March of 2016, finding that Hyundai Motor America had not violated Texas law.  After extensive oral argument, the Board reversed that finding.  Over the last 6 years the Board has reversed Administrative Law Judge decisions just 3 times, and SKV has won 2 of those reversals.  SKV Partners Lee Kaplan and Jarod Stewart represented World Car Hyundai in the trial and the oral argument before the Board.


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