Automotive and Vehicles

Industry Team

Our Automotive and Vehicles Industry Team gained widespread recognition by representing the National Association of Minority Auto Dealers and its membership during the Chrysler and GM congressional facilitated negotiations, with the automotive trade associations, such as the National Association of Automotive Dealers (NADA) and the Automotive Trade Executives Association (ATEA). We effectively elevated the concerns of New York state auto dealerships and regional dealership groups looking to protect their economic rights to a national platform after two of the “Big Three” automakers received federal bailout funding, filed for bankruptcy protection, and restructured their operations.

Harris Beach represents new and used automotive and vehicle dealer principals and franchise owners and participates in regional dealership associations. We also serve as counsel to car rental companies in litigation defense, licensing, franchising and general corporate matters, and represent construction equipment and recreational vehicle dealerships on a broad range of matters.

Our services include:

Acquisitions and Divestitures

Our attorneys have extensive experience handling the wide range of issues associated with dealership acquisitions and divestitures. This includes tax, finance, structure, environmental, ERISA, securities, labor relations and real estate matters. We work with buyers, sellers, financial sources, parties to joint ventures, and members of strategic alliances in structuring transactions and protecting our clients’ interests. To better serve our clients, we also assist them by finding capital, partners and advisors.

Attorney General Advertising Guidelines

The New York State Office of the Attorney General has historically taken an aggressive posture with respect to advertising by car dealers. The office has issued a series of guidelines to regulate all manner of advertisement, including references to financing terms. Harris Beach has represented numerous dealers threatened by the attorney general office’s Consumer Frauds Division with proceedings to establish fraudulent advertising schemes. This includes the negotiation of “Assurance Agreements” and related fines. Harris Beach attorneys also provide guidance on compliance with the attorney general’s requirements.

Business and Commercial Litigation

At Harris Beach, our attorneys represent dealers in all types of litigated matters. The experience of our industry team attorneys, combined with the highly successful litigation team, results in positive outcomes for clients.

Commercial Real Estate and Finance

Whether an automobile dealer is considering vacant land for a potential dealership site, purchasing an existing dealership site, or acquiring a building to convert it to a dealership, we assist dealers through the entire process. Our attorneys handle zoning, land use and environmental issues. In addition, we assist dealers in obtaining financing as well as seeking available government sponsored tax credit programs.

Dealer-Manufacturer Relationships

Our attorneys handle all matters related to the dealer-manufacturer relationship, including franchise agreements, rates of compensation for service warranty work, requirements for facilities, signage upgrades for existing dealerships, terms of approval for new locations, audits of warranty work, product allocation and demands by manufacturers for dedicated parts. Harris Beach representation includes handling the following:  disputes over responsibility for maintenance of manufacturer-owned property; matters related to new car sales personnel; service personnel certifications; and manufacturer demands for minimum customer parking, minimum inventory space, minimum service technicians, dedicated and certified service parts department staff, separate cashier stations for different make vehicles, separately outfitted showrooms, manufacturer approval of succession plans and admission of new partners.

Department of the Treasury Requirements

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals. Harris Beach helps dealerships comply with OFAC sanctions and adhere to laws such as The USA PATRIOT Act. This includes assisting with responses to credit agency reports and reviews of non-credit transactions requiring verification that the dealer is not conducting business with persons on the Specially Designated Nationals and Blocked Persons lists.

Eminent Domain

We provide dealership clients with knowledgeable and aggressive representation. Our work with tax assessment disputes and condemnation proceedings have regularly secured awards that satisfy our dealership clients.

Environmental Matters and Conveyance

For many dealers, their location represents a substantial part of their net worth, which impacts estate planning matters. Harris Beach lawyers have assisted dealers in: preparing their properties for ease of conveyance, addressing environmental risk associated with operations and negotiations with the Department of Environmental Conservation (DEC) concerning releases of hazardous substances. We counsel clients on regulatory matters involving the Occupational Safety and Health Act (OSHA) and the Environmental Protection Agency (EPA). We also advise clients on the liabilities related to underground and above ground petroleum storage tanks and disposal of hazardous materials, including heavy metals, ignitable wastes, solvents, toxic wastes, paints, etc.

Financing and Incentives

Regulations such as the Equal Credit Opportunity Act and Regulation B govern the procedures dealers follow when assisting customers with arranging credit. The state of New York has been considering the adoption of a regulatory framework in which dealers would be obligated to disclose the incentives they receive in connection with financing secured for customers. We remain cognizant of key industry issues and provide our dealership clients with solid legal advice.

General Corporate Counsel

Harris Beach has significant experience serving as corporate counsel to the automotive and vehicles industry on a diverse array of matters including, but not limited to, forming joint ventures, reviewing and modifying rental agreements, negotiating conflicts, and acquiring, maintaining and divesting fleets of vehicles.

Inspections and Hearings Before the Department of Motor Vehicles

Our attorneys represent dealers in Department of Motor Vehicles hearings. Two of the issues often addressed are alleged improper inspection practices and licensing problems.

Internal Revenue Service Cash Reporting

In connection with efforts to avoid money laundering and to ferret out terrorist activities, the federal government requires reporting of certain cash transactions. Some of our dealers inadvertently have run afoul of this rule, most recently in connection with reporting too many transactions. This prompted an audit for one client, and, although it resulted in no sanction, it was cause for significant dealer concern. At Harris Beach, we are familiar with these guidelines through our representation of both financial institutions and auto dealerships.

Labor and Employment

The automotive industry played an integral role in the passage of several labor laws in the United States. Today, labor matters continue to be one of the major issues facing automotive and vehicle dealerships and car rental companies. Harris Beach advises clients on all areas of employer/employee relations, the hiring and firing of employees, harassment and discrimination issues, federal and state minimum wage, overtime laws, notice requirement, employee handbooks, employee policies, rules governing commissioned sales personnel, the Fair Labor Standards Act and safety in the workplace (OSHA) issues. We have an extensive track record successfully representing company management when faced with union organizing and/or collective bargaining negotiation issues. Our attorneys have substantial experience in litigating employment matters in federal and state courts.

We also provide preventive legal advice and training for all levels of management on Family Medical Leave Act (FMLA), Americans with Disabilities (ADA), handling and investigating sexual harassment and discrimination claims, hiring and firing, and many other workplace issues.

Liability Defense

Harris Beach attorneys have defended automotive industry organizations in a broad range of litigated matters, ranging from providing regional counsel in personal injury defense matters, to serving as national counsel in catastrophic brain injury cases brought against car rental companies. Over the years, our litigation attorneys’ ardent and goal-oriented representation has led to an impressive record of positive outcomes for automotive industry clients.

Licensing and Franchising

The automotive and vehicles industry has unique legal issues which require specialized knowledge and skills. Our attorneys leverage their collective automotive dealership and car rental company experience to provide effective counsel to clients on dealership licensing requirements, franchise agreements and disputes and the respective merits of licensing versus franchising as business expansion strategies.

Matters Before the Attorney General’s Office

The New York Attorney General’s Office historically has focused on automotive dealers. Investigations are conducted for individual consumer complaints and in the areas of advertising financing of vehicle purchases, and vehicle repairs. Harris Beach attorneys have represented a broad array of dealers and car rental companies in the course of these investigations and have helped them negotiate resolutions, thereby minimizing the risk of formal public proceedings.

New York’s Statutory Framework for Dealerships

Unlike most other states, New York has enacted specific statutory protections for automobile dealers in their dealings with automotive manufacturers. The familiarity of Harris Beach attorneys with these special protections has enabled our clients to confront manufacturers successfully over threatened franchise terminations, disputes concerning warranty reimbursement and repairs, succession planning and site control.

Privacy Concerns

Legislation has been enacted to prevent the disclosure of customer information by businesses, which affects dealerships in many ways. Government regulation includes the Gramm-Leach-Bliley Act (GLB), the Federal Trade Commission’s Privacy Rule and the Safeguards Rule. The purpose of each of these three pieces of the regulatory framework differs. GLB raises consumer awareness of how a dealer might use nonpublic, personal information by requiring the dealer to provide a privacy notice outlining their information sharing practices. It also imposes restrictions on banks and other financing institutions contacted by dealers. Information must be maintained in a way to prevent misappropriation, alteration and tampering.

The Safeguards Rule requires development, implementation and maintenance of a comprehensive written “Information Security Program.” Such a program outlines the dealership’s policies and procedures relating to the physical, administrative and technical safeguards in place to assure that customer information does not become public. Actions may include designating a “Program Coordinator” and identifying potential internal and external risks to customer information. Harris Beach attorneys provide training and guidance relative to the full range of privacy concerns facing automotive and vehicle dealerships.

Real Property Tax Assessment Disputes

Our attorneys represent dealerships in proceedings to lower real property tax assessments and regularly handle matters involving the loss of actual and/or potential display space. We provide dealership clients with knowledgeable and aggressive representation in tax assessment disputes and condemnation proceedings.

We also recognize that it is usually beneficial to both sides to resolve these disputes without litigation. We have extensive experience in bringing parties together to work out solutions without a court battle, as well as considerable experience in the trial of these cases if fair settlements for our clients cannot be obtained.

Site Control

Increasingly, dealerships face auto manufacturers’ efforts to exert control over or influence the appearance, configuration or location of dealership property. Harris Beach has represented dealers in negotiation and litigation of such matters, including disputes over dualing of dealerships, modification of manufacturer programs to exclude dualed dealers, configuration of properties and conditioning of approvals on steps to separate facilities for different lines of vehicles.

Succession Planning/Partnership

Attorneys with our Automotive and Vehicles Industry Team help plan and execute strategies designed to meet our clients’ business and personal goals, as well as providing practical recommendations to help them minimize tax costs and comply with increasingly complex tax regulations. From partnership agreements to business succession planning, our attorneys are familiar with the issues unique to automotive and vehicle dealerships. We help dealership owners develop plans so they can transfer their businesses to their children, while minimizing the impact of estate and gift taxes. We also represent dealers in disputes between partners/shareholders.

Warranty Issues/Lemon Law

Harris Beach attorneys regularly counsel new and used automotive and vehicle dealerships on warranty issues, including New York state’s minimum warranty standards for used vehicles and manufacturer warranties on new vehicles.