General Motors Corporation v. State of Illinois Motor Vehicle Review Board

Docket Nos. 101585, 101601 cons.

IN THE

SUPREME COURT

OF

THE STATE OF ILLINOIS

GENERAL MOTORS CORPORATION et al., Appellants, v. THE

STATE OF ILLINOIS MOTOR VEHICLE REVIEW BOARD et al.,

Appellees.

Opinion filed January 8, 2007.

CHIEF JUSTICE THOMAS delivered the judgment of the court,

with opinion.

Justices Freeman, Fitzgerald, Kilbride, Garman, and Burke

concurred in the judgment and opinion.

Justice Karmeier dissented, with opinion.

OPINION

In this case, General Motors Corporation (GMC) sought to add

two new automobile dealerships in the greater Chicago area: one on

Chicago’s far west side at Jacobs Twin Buick (Jacobs) and the other

in Glenview, Illinois, at Loren Pontiac-Buick (Loren). Various

existing GMC dealerships challenged the newly proposed dealerships

by filing a protest with the State of Illinois Motor Vehicle Review

Board (Board) pursuant to the Motor Vehicle Franchise Act

(Franchise Act or Act) (815 ILCS 710/1 et seq. (West 2004)), which

allows an existing dealer to file a protest when a manufacturer

attempts to locate a new franchise within an existing dealer’s relevant

market area. It is undisputed that the proposed sites for the additional

franchises (add points) were within the protesting dealers’ relevant

market area. The Board granted the protests, and the circuit court of

Sangamon County confirmed that decision. GMC and Loren appealed,

arguing that the Board failed to apply the Act’s “good cause” standard

in reaching its decision to grant the protests. GMC and Loren also

argued that the Act is unconstitutional and that the Board’s decision

was against the manifest weight of the evidence. The appellate court

rejected GMC’s and Loren’s arguments, with one justice dissenting.

361 Ill. App. 3d 271. We allowed the petitions for leave to appeal

filed by GMC and Loren and have consolidated the cases. 210 Ill. 2d

R. 315. We also allowed various organizations to file amicus curiae

briefs on behalf of the respective parties. Loren has adopted the briefs

of GMC before this court.

BACKGROUND

Illinois’ Motor Vehicle Franchise Act is comparable to legislation

adopted by a number of states designed to protect existing dealers and

consumers from the negative impact of aggressive franchising

practices by automobile manufacturers whose desires to establish

excessive competing franchises are considered to be a potential threat

to the public welfare. See Fireside Nissan, Inc. v. Fanning, 30 F.3d

206, 211 (1st Cir. 1994); 2 Franchise & Distribution L. & Prac.

§14:31 (1990). Most of the states having such legislation allow

existing dealers of the same line make that are within a specified

distance of a proposed new dealership to protest. These statutes

generally provide that no new franchise may be established unless the

trier of fact, usually a motor vehicle review board, decides that the

appointment is for “good cause,” which requires the assessment of a

number of statutory factors to make that determination. See, e.g.,

Ark. Code Ann. §23–112–311 (West 2004); Cal. Vehicle Code §3062

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(Deering Supp. 2006); Conn. Gen. Stat. Ann. §42–133dd (West Supp.

2006); Mass. Gen. Laws Ann. 93B §6 (West 2005).1

Our Franchise Act requires a manufacturer wishing to grant an

additional franchise in the relevant market area of an existing franchise

of the same line make to give 60 days written notice to each existing

dealer of the same line make whose relevant market area includes the

proposed location. 815 ILCS 710/4(e)(8) (West 2004). The

“[r]elevant [m]arket [a]rea” for purposes of this case is defined by

statute as “the area within a radius of 10 miles from the principal

location of a franchise or dealership.” 815 ILCS 710/2(q) (West

2004). An existing franchise has 30 days from the receipt of the notice

from the manufacturer to file a protest with the Board. 815 ILCS

710/4(e)(8) (West 2004). If a protest is filed, the manufacturer has the

burden of proof to establish that “good cause” exists to allow the

grant or establishment of the additional franchise. 815 ILCS

710/4(e)(8) (West 2004).

Section 4(e)(8) of the Act provides that the determination of

whether “good cause” exists for allowing an additional franchise “shall

be made by the Board under subsection (c) of Section 12 of this Act.”

815 ILCS 710/4(e)(8), 12(c) (West 2004). Section 12(c) provides

that, in considering whether “good cause” has been established for

granting a proposed additional franchise, the Board shall consider “all

relevant circumstances” in accordance with subsection (v) of section

2 of this Act, including but not limited to, 11 statutory factors set

forth in section 12(c) (815 ILCS 710/12(c) (West 2004)). Section 2(v)

of the Act is part of the definitions section of the statute and provides

that “ ‘[g]ood cause’ means facts establishing commercial

reasonableness in lawful or privileged competition and business

practices as defined at common law.” 815 ILCS 710/2(v) (West

2004). The “relevant circumstances” that the Board is required to

consider are listed in section 12(c) as follows:

1

Thirty-two states currently have motor vehicle franchise statutes that

allow existing dealerships of the same line make within a specified distance

of a proposed new dealership to file a protest to resolve whether a new dealer

may be added, and thirty of those states have a “good cause” standard.

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“(1) whether the establishment of such additional franchise

or the relocation of such motor vehicle dealership is warranted

by economic and marketing conditions including anticipated

future changes;

(2) the retail sales and service business transacted by the

objecting motor vehicle dealer or dealers and other motor

vehicle dealers of the same line make with a place of business

in the relevant market area to be served by the additional

franchise or the relocated motor vehicle dealership during the

5 year period immediately preceding such notice as compared

to the business available to them;

(3) the investment necessarily made and obligations

incurred by the objecting motor vehicle dealer or dealers and

other motor vehicle dealers of the same line make with a place

of business in the relevant market area to be served by the

additional franchise or the relocated motor vehicle dealership

to perform their obligations under existing franchises or selling

agreements; and, the manufacturer shall give reasonable credit

for sales of factory repurchase vehicles purchased by the

objecting motor vehicle dealer or dealers and other motor

vehicle dealers of the same line make with the place of

business in the relevant market area to be served by the

additional franchise or the relocated motor vehicle dealership,

or the additional motor vehicle dealership or other facility

limited to the sale of factory repurchase or late model vehicles,

at manufacturer authorized or sponsored auctions in

determining performance of obligations under existing

franchises or selling agreements relating to total new vehicle

sales;

(4) the permanency of the investment of the objecting

motor vehicle dealer or dealers and other motor vehicle

dealers of the same line make with a place of business in the

relevant market area to be served by the additional franchise

or the relocated motor vehicle dealership;

(5) whether it is beneficial or injurious to the public

welfare for an additional franchise or relocated motor vehicle

dealership to be established;

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(6) whether the objecting motor vehicle dealer or dealers

and other motor vehicle dealers of the same line make with a

place of business in the relevant market area to be served by

the additional franchisee or relocated motor vehicle dealership

are providing adequate competition and convenient consumer

care for the motor vehicles of the same line make owned or

operated in the area to be served by the additional franchise or

relocated motor vehicle dealership;

(7) whether the objecting motor vehicle dealer or dealers

and other motor vehicle dealers of the same line make with a

place of business in the relevant market area to be served by

the additional franchisee or the relocated motor vehicle

dealership have adequate motor vehicle sales and service

facilities, equipment, vehicle parts and qualified personnel to

reasonably provide for the needs of the customer; provided,

however, that good cause shall not be shown solely by a desire

for further market penetration;

(8) whether the establishment of an additional franchise or

the relocation of a motor vehicle dealership would be in the

public interest;

(9) whether there has been a material breach by a motor

vehicle dealer of the existing franchise agreement which

creates a substantially detrimental effect upon the distribution

of the franchiser’s motor vehicles in the affected motor vehicle

dealer’s relevant market area or fraudulent claims for warranty

work, insolvency or inability to pay debts as they mature;

(10) the effect of an additional franchise or relocated

motor vehicle dealership upon the existing motor vehicle

dealers of the same line make in the relevant market area to be

served by the additional franchisee or relocated motor vehicle

dealership; and

(11) whether the manufacturer has given reasonable credit

to the objecting motor vehicle dealer or dealers and other

motor vehicle dealers of the same line make with a place of

business in the relevant market area to be served by the

additional franchise or relocated motor vehicle dealership or

additional motor vehicle dealership or other facility limited to

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the sale of factory repurchase or late model vehicles, for retail

sales of factory repurchase vehicles purchased by the motor

vehicle dealer or dealers at manufacturer authorized or

sponsored auctions.” 815 ILCS 710/12(c)(1) through (c)(11)

(West 2004).

In February and March of 2001, GMC sent notices to all existing

dealers in the relevant market area of its two proposed franchise add

points. Castle Buick-Pontiac-GMC (Castle) and Grossinger Autoplex,

Inc. (Grossinger), filed timely protests with the Board as to the Jacobs

site. With respect to the Loren site, timely protests were filed by

North Shore, Inc., doing business as Muller Pontiac/GMC Mazda

(Muller), Grossinger,2 and Joe Mitchell/GMC Truck, Inc. (Mitchell).

Castle is located five miles from the proposed Jacob’s add point.

Grossinger is 6.8 miles from the proposed Jacob’s add point, and 6.5

miles from the proposed Loren add point. Muller is 4.9 miles from the

proposed Loren add point. Within a 10-mile radius of the Jacob’s add

point, there are three existing GMC dealers, and within a 10-mile

radius of the Loren add point, there are also three existing GMC

dealerships. In addition, four GMC dealers are located just outside of

the 10-mile radius applicable to the Jacob’s add point. In all, there are

a total of 27 GMC dealerships in the Chicago area.

By agreement of the parties, the cases were consolidated. The

transcripts of the hearings are voluminous, and the parties together

presented approximately 200 exhibits. The record contains 59

volumes.

In May 2003, the hearing officer entered his findings of fact,

conclusions of law, and recommended decision. The hearing officer

recommended that the protests against both the Jacobs and Loren add

points be upheld and that the Board should not approve the additional

GMC franchises. In September 2003, the Board entered a final order

that granted the dealers’ protests and adopted and incorporated into

its final order the findings of fact, the conclusions of law and the

recommended decision of the hearing officer. The Board also awarded

2

Grossinger was located in the relevant market area of both proposed add

points and protested both of them.

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the protesting dealers attorney fees and costs to be determined at a

later hearing.

The circuit court confirmed the decision of the Board. GMC and

Loren appealed. The appellate court found that the attorney fees and

costs award should not have been entered because it was not yet ripe

for resolution and therefore vacated the award. In all other respects,

the appellate court affirmed the circuit court’s judgment, which upheld

the dealers’ protests. 361 Ill. App. 3d at 291.

ANALYSIS

I. The Good-Cause Standard

GMC first argues before this court that the Board did not apply

the Act’s “good cause” standard correctly. It points to section 2(v)’s

definition of “good cause” as “commercial reasonableness in lawful or

privileged competition and business practices as defined at common

law.” 815 ILCS 710/2(v) (West 2004). It claims that the Board

analyzed each of the 11 factors in section 12(c) untethered from

section 2(v), even though section 12(c) directs that the 11 factors be

considered in accordance with section 2(v). See 815 ILCS 710/12(c)

(West 2004). GMC further urges that the terms “good cause” and

“commercial reasonableness” should be equated with “good faith.”

According to GMC, if the evidence shows it acted without any bad

faith or malice in its decision to add the new franchises, then its

decision should not be second-guessed. GMC contends that “good

cause” should be interpreted as a minimal standard and not some

“super standard of perfection.”

GMC’s argument presents a question of statutory interpretation.

When presented with an issue of statutory construction, our role is to

ascertain and give effect to the intent of the legislature. People v.

Whitney, 188 Ill. 2d 91, 97 (1999). Legislative intent is best

determined from the language of the statute itself, which if

unambiguous, should be enforced as written. Taddeo v. Board of

Trustees of the Illinois Municipal Retirement Fund, 216 Ill. 2d 590,

595 (2005); Comprehensive Community Solutions, Inc. v. Rockford

School District No. 205, 216 Ill. 2d 455, 473 (2005). In giving effect

to the statutory intent, the court should consider, in addition to the

statutory language, the reason for the law, the problems to be

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remedied, and the objects and purposes sought. People v. Donoho,

204 Ill. 2d 159, 171-72 (2003). A statute is ambiguous if it is subject

to two or more reasonable interpretations. Donoho, 204 Ill. 2d at 172.

The construction of a statute by an agency charged with its

administration will be given deference where there is a reasonable

debate about the meaning of the statute, but that interpretation is not

ultimately binding on this court. Elementary School District 159 v.

Schiller, 221 Ill. 2d 130, 142-43 (2006); Taddeo, 216 Ill. 2d 590.

Beginning with the language of the Act, we note that it plainly

requires that the Board “shall” consider each of the 11 factors listed

in section 12(c), along with any other relevant circumstances, when

determining whether “good cause” has been established. This is

precisely what the Board did. In reaching its decision to grant the

protest of the existing dealerships, the Board set forth the definition

of “good cause” in section 2(v), analyzed each of the applicable

factors as directed by section 12(c) of the Act, and balanced the

various interests at stake. It concluded that each of the factors in

section 12(c) favored the protesting dealers, except the circumstance

listed in section 12(c)(11), which it found inapplicable to both

franchises.

We believe that in enacting the statutory scheme, the legislature

clearly intended that the Board’s assessment of the 11 factors be

equated with “good cause.” It also apparent that the legislature

intended that the Board balance the dealer’s interest in maintaining

viable businesses, the manufacturer’s interest in promoting sales, and

the public’s interest in adequate competition and convenient service.

See Fields Jeep-Eagle, Inc. v. Chrysler Corp., 163 Ill. 2d 462, 477-78

(1994). This is consistent with the Act’s declaration of purpose, which

provides as follows:

“The legislature finds and declares that the distribution and

sale of vehicles within this State vitally affects the general

economy of the State and the public interest and welfare, and

that in order to promote the public interest and welfare, and in

the exercise of its police power, it is necessary to regulate

motor vehicle manufacturers, distributors, wholesalers and

factory or distributor branches or representatives, and to

regulate dealers of motor vehicles doing business in this State

in order to prevent frauds, impositions and other abuses upon

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its citizens, to protect and preserve the investments and

properties of the citizens of this State, and to provide

adequate and sufficient service to consumers generally.” 815

ILCS 710/1.1 (West 2004).

GMC’s interpretation would create an absurd result and would

render the Act’s purpose and the Board’s consideration of the 11

statutory factors essentially meaningless. If all that was required was

subjective good faith on the part of GMC in making its business

decision, it would negate any objective “good cause” analysis. We do

not believe that this is what the legislature had in mind when it placed

the burden of proving “good cause” on the manufacturer and required

the assessment of the 11 statutory criteria.

Additionally, if GMC’s interpretation were adopted, it would

cause the Illinois Motor Vehicle Franchise Act to differ markedly from

other state’s automobile franchise acts, which simply require an

objective assessment of the statutory factors to determine “good

cause.” See, e.g., Ark. Code Ann. §23–112–311 (West 2004); Cal.

Vehicle Code §3062 (Deering Supp. 2006); Conn. Gen. Stat. Ann.

§42–133dd (West Supp. 2006); Mass. Gen. Laws Ann. 93B §6 (West

2005).

GMC emphasizes the “lawful or privileged competition” language

of the good-cause standard. 815 ILCS 710/2(v) (West 2004). The

terms “lawful competition,” “privileged competition,” “privilege of

competition” and “competitor’s privilege” appear in the case law and

all refer to the same privilege, which is an affirmative defense to the

tort of intentional interference with prospective business advantage.

See Cromeens, Holloman, Sibert, Inc. v. AB Volvo, 349 F.3d 376,

398-99 (7th Cir. 2003); International Marketing, Ltd. v. Archer-

Daniels-Midland Co., 192 F.3d 724, 731 (7th Cir. 1999); G.M. Brod

& Co. v. U.S. Home Corp., 759 F.2d 1526, 1534 (11th Cir. 1985). It

“allows one to divert business from one’s competitors generally as

well as from one’s particular competitors provided one’s intent is, at

least in part, to further one’s business and is not solely motivated by

spite or ill will.” See Soderlund Brothers, Inc. v. Carrier Corp., 278

Ill. App. 3d 606, 615 (1995).

It is not readily apparent, however, what if anything this

affirmative defense has to do with a protest under the Franchise Act.

GMC claims that by referring to “privileged competition,” the

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legislature must have been creating a standard that defers to the

manufacturer’s business decision absent any evidence of bad faith in

reaching that decision. We read the Illinois statutory scheme

differently. As the appellate court correctly observed, the standard is

not simply “lawful or privileged competition.” Instead, the standard is

“commercial reasonableness in lawful or privileged competition” and

requires that the Board “shall” consider the applicable statutory

factors listed. (Emphasis added.) 815 ILCS 710/2(v), 12(c) (West

2004).

“Commercial reasonableness” is not specifically defined by the

statute; thus, we will look to its commonly understood meaning.

Black’s Law Dictionary defines “commercially reasonable” as follows:

“(Of a property sale) conducted in good faith and in accordance with

commonly accepted commercial practice.” (Emphasis added.) Black’s

Law Dictionary 286 (8th ed. 2004). Thus, commercial reasonableness

includes something more than simply exercising good faith in a

business decision. Good faith and commercial reasonableness are not

interchangeable terms. See Original Great American Chocolate Chip

Cookie Co. v. River Valley Cookies, Ltd., 970 F.2d 273, 280 (7th Cir.

1992).

One of the clearest explanations we have found for commercial

reasonableness was provided by the California appellate court when

it attempted to determine whether notice was properly given under a

statute that required a “good faith and commercially reasonable effort”

in complying with statutory notice requirements. See Gifford v. J. &

A. Holdings, 54 Cal. App. 4th 996, 63 Cal. Rptr. 2d 253 (1997).

There, the court stated that “[c]ommercial reasonableness is not

expressly defined in the statute, but has been defined elsewhere to

include commonly accepted commercial practices of responsible

businesses which afford all parties fair treatment.” Gifford, 54 Cal.

App. 4th at 1005-06, 63 Cal. Rptr. 2d at 259. The court continued by

stating that “[g]ood faith and commercial reasonableness primarily

involve questions of fact, based on all the circumstances; the trial

court’s findings must be upheld if supported by substantial evidence.”

Gifford, 54 Cal. App. 4th at 1006, 63 Cal. Rptr. 2d at 259.

Similarly, good faith and commercial reasonableness in the present

case were questions of fact for the Board to resolve by assessing and

balancing the factors in section 12(c) with an eye toward fair

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treatment of the interests involved–the existing dealers, the

manufacturer and the consumer public. The legislature specifically

placed the burden of proof on the manufacturer to show “good cause”

(815 ILCS 710/4(e)(8) (West 2004)), and further provided that “good

cause shall not be shown solely by a desire for further market

penetration.” (Emphasis added.) 815 ILCS 710/12(c)(7) (West 2004).

GMC essentially asks this court to read this term out of the statute.

We decline to do so. Instead, we find that the Board carefully

considered the applicable factors and the relevant evidence presented

by the parties and concluded that GMC, as the manufacturer, had not

met its burden. Accordingly, GMC’s argument that the Board applied

an erroneous standard must be rejected.

II. Whether the Board’s Decision Was Clearly Erroneous

GMC next argues that the Board’s decision was either clearly

erroneous or against the manifest weight of the evidence.

The findings and conclusions of an administrative agency on a

question of fact shall be held to be prima facie true and correct. 735

ILCS 5/3–110 (West 2004). A reviewing court does not reweigh the

evidence that was before the agency. Comprehensive Community

Solutions, Inc. v. Rockford School District No. 205, 216 Ill. 2d 455,

471-72 (2005). An agency’s conclusion on a question of mixed law

and fact–that is one that asks the legal effect of a given set of facts–is

reviewed for clear error. Elementary School District 159 v. Schiller,

221 Ill. 2d 130, 143 (2006). Such review is significantly deferential to

an agency’s experience in construing and applying the statute that it

administers. Schiller, 221 Ill. 2d at 143. Thus, an agency’s decision

will only be found to be clearly erroneous where a reviewing court is

left, on the entire record, with a definite and firm conviction that a

mistake has been committed. Schiller, 221 Ill. 2d at 143.

The Board made findings of fact on each of the statutory factors

for assessing “good cause” noted above, and did so with respect to

each of the two dealerships at issue. The Board’s findings of fact were

essentially the same for each of the two dealerships. With respect to

section 12(c)(1), the Board found that a new dealership was not

warranted by economic and marketing conditions, including

anticipated future changes. See 815 ILCS 710/12(c)(1) (West 2004).

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It noted that there were already three GMC dealers within a radius of

less than 10 miles of both Jacobs and Loren, and that there were seven

dealers within 11 miles of Jacobs. Thus, the areas were already

substantially represented by GMC. Moreover, the Board found that

there was little, if any, projected growth around the dealerships, that

there was insufficient evidence that the dealers surrounding Jacobs and

Loren were underperforming, and that there was no evidence that the

answer to any perceived “underperformance” was to add another

dealer. It also found that there was competent evidence that the

dealers surrounding Jacobs and Loren suffered from a lack of product

allocation and that adding a dealer would only exacerbate the

problem.

Regarding section 12(c)(2), the Board found that the retail sales

and service business transacted by the protesting dealers and other

GMC dealers in the relevant market areas, as compared to the

business available to them, was reasonable and therefore favored the

protesting dealers. See 815 ILCS 710/12(c)(2) (West 2004). The

Board found that GMC’s experts used a measure of performance that

was unrealistic in the metropolitan, multiple-dealer network at issue.

Furthermore, GMC presented insufficient evidence to support the

argument that the local dealers around Jacobs and Loren were failing

to adequately perform.

With respect to sections 12(c)(3) and (c)(4), the Board found that

the protesting dealers and other GMC dealers in the relevant market

area had made substantial and permanent investments. See 815 ILCS

710/12(c)(3), (c)(4) (West 2004). It noted that the protesting dealers

had invested millions of dollars in their facilities, particularly

Grossinger, who had a $19 million state-of-the-art Autoplex.

Additionally, Castle recently spent $5 million to create an exclusive

GMC/Buick/Pontiac dealership and was not permitted to add any non-

GMC franchises for the next 25 years. Moreover, each of the

protesting dealers had shown a commitment to a longstanding and

respectable presence in the community.

Regarding sections 12(c)(5) and (c)(8), the Board found that the

addition of a new dealer could be injurious to the public welfare and

that there appeared to be little or no public benefit that would accrue.

See 815 ILCS 710/12(c)(5), (c)(8) (West 2004). It noted that the

public would not be served by a dealer network where the individual

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dealers are small and lack adequate product to sell. It would be

inconvenient for consumers to have to travel to a number of GMC

outlets just to be able to see the particular vehicle they are

considering. The benefit of being a mile or two closer to the nearest

GMC dealer would be incremental at best. Given that already scarce

inventory levels would be stretched further by adding another dealer,

the public would not be served by the expansion of the dealer network

into areas where there were already so many dealers.

With regard to section 12(c)(6), the Board found that the local

dealers in the relevant market areas of the proposed Jacob and Loren

dealerships were providing adequate competition and convenient care

to their customers. See 815 ILCS 710/12(c)(6) (West 2004).

According to the Board, Castle, Grossinger, Mitchell and Muller all

provided excellent customer service and made every effort to record

as many sales as possible. There was insufficient evidence to show that

these dealers were failing to perform adequately, but there was

competent evidence to show that their performance had been

hampered by a lack of adequate product supply.

With respect to section 12(c)(7), the Board found that the

protesting dealers in the relevant market areas of both proposed add

points had adequate sales and service facilities, equipment, vehicle

parts and qualified personnel to reasonably provide for the needs of

the customers in the relevant market areas. See 815 ILCS

710/12(c)(7) (West 2004). There was no evidence presented by GMC

that any of the protesting dealers, or any other GMC dealers in the

relevant market areas, had inadequate sales and service facilities,

equipment, vehicle parts or qualified personnel to reasonably serve

customers. To the contrary, the sales and service facilities ranged from

adequate to state-of-the-art.

The Board next found that there was no evidence of a material

breach of any franchise agreement by any protesting dealer in the

relevant market areas. See 815 ILCS 710/12(c)(9) (West 2004).

Regarding section 12(c)(10), the Board found that there was

competent evidence that the addition of Jacobs as a GMC dealer

would hurt the existing dealers in the relevant market area. See 815

ILCS 710/12(c)(10) (West 2004). Similarly, the Board found that the

addition of Loren would hurt the existing dealers in the relevant

market area. There was insufficient evidence presented to show that

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there was enough additional opportunity to support another dealer in

either relevant market area. But there was competent evidence to

show that existing dealers suffer from inventory shortages caused by

GMC’s allocation system, and there was no reason to believe that the

existing dealers could respond positively to the addition of a new add

point without sufficient product supply.

Finally, the Board found section 12(c)(11) to be inapplicable to the

case. See 815 ILCS 710/12(c)(11) (West 2004).

After reviewing the evidence presented, we conclude that the

Board’s decision to grant the existing dealers’ protests was not clearly

erroneous. The evidence supporting the Board’s conclusions on

several factors was undisputed. There was unrebutted testimony

establishing that the protesting dealers had made substantial

investments in their dealerships that were intended to be permanent.

See 815 ILCS 710/12(c)(3), (c)(4) (West 2004). Additionally, the

evidence was undisputed that the protesting dealers had adequate

sales and service facilities. See 815 ILCS 710/12(c)(7) (West 2004).

Finally, there was no evidence that any of the protesting dealers had

materially breached their franchise agreements. See 815 ILCS

710/12(c)(9) (West 2004). The parties presented conflicting evidence

about the factors that focus on public interest and welfare, the

economic impact of adding dealerships, and the amount of business

available to existing dealers in the relevant market area. See 815 ILCS

710/12(c)(1), (c)(2), (c)(5), (c)(8), (c)(10) (West 2004).

The two experts who testified, James Anderson (GMC’s expert)

and Dr. John Matthews (the protesting dealers’ expert), had

significantly different opinions due to their difference in approaches.

Anderson’s method compared local GMC sales performance with

adjusted national and statewide standards. Matthews compared GMC

sales performance in the Jacobs relevant market area with all parts of

the Chicago metropolitan area outside the Jacobs relevant market

area, and he used the same method for Loren.

GMC criticizes Matthews’ approach as “circular” because he

relied solely on data from the Chicago area. But Matthews’ approach

offered the advantage of comparing the two relevant market areas to

areas that were similar in most respects, including the fact that they

were urban, that dealers sold heavily into one another’s territories, and

that the climate was generally the same. By contrast, Anderson’s

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adjusted national and state standards took into account data from rural

areas, where there was often far less competition and where customer

tastes differed from those of customers in major cities like Chicago.

In light of Dr. Matthews’ testimony and the other evidence, it was

reasonable for the Board to conclude that Anderson’s approach was

not as valid a method as Dr. Matthew’s for measuring dealership

performance in a multidealer area in a large metropolitan region. After

examining the evidence, the Board was simply not persuaded by

GMC’s attempt to show that GMC dealers in the two relevant market

areas were performing poorly. Instead, the Board found that Dr.

Matthews’ approach was generally superior, and gave more weight to

the testimony he presented on the economic impact of adding the

dealerships and the harm this would cause to marginally profitable

dealerships like Castle and Muller.

GMC argues that the Board’s decision relied in large part upon

performance averages for GMC dealers, and assumed a static market.

But, as the appellate court majority pointed out, it was GMC who

introduced evidence that established average sales as the appropriate

measure of performance. 361 Ill. App. 3d at 279. GMC cannot

complain of the Board’s reliance upon data concerning average sales

when GMC itself relied on such data in its effort to meet its burden of

establishing good cause to add the dealerships. Moreover, there is

nothing in the record indicating that the Board would not have been

receptive to evidence indicating likely future improvement in GMC

sales at the time of the administrative hearing, which took place in

2002. But the evidence presented to the Board indicated that GMC

sales for dealers in the Jacobs and Loren relevant market areas were

generally declining at that time. Moreover, this decline occurred even

though the protesting dealerships devoted significant resources to

advertising and promoting GMC sales.

Evidence that GMC dealers in the two relevant market areas had

considerable difficulty getting an adequate supply of product from

GMC supported the Board’s conclusion that adding the dealerships

would not serve the public interest. Many area GMC dealers testified

that they had trouble getting an adequate supply from GMC of sport

utility vehicles, the vehicles that sell best in the Chicago area.

Grossinger general manager Charles Settles stated that GMC makes

discretionary allocations of additional vehicles to dealers, but these

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allocations are made in an arbitrary fashion. GMC’s vehicle allocation

system also had an additional problem in that there was a lapse of 90

to 120 days between the time a vehicle is ordered and its arrival.

According to Dr. Matthews, adding the two dealerships would

only exacerbate the existing product supply problems and cause

greater inconvenience to GMC customers in the area. Dr. Matthews

stated that it was not in the public interest to have small dealers with

small inventories, thereby requiring buyers to visit several GMC

dealers to see all the vehicles they wanted to view. Furthermore, Dr.

Matthews believed that the cross-selling data showed there was

adequate competition among GMC dealers in the relevant areas, and

he felt that GMC should have fewer and larger dealers in the Chicago

area. The evidence also showed that growth was unlikely except for

a new housing development called the Glen in the Loren relevant

market area. Matthews estimated that this new development would

only result in an annual sales increase of five GMC vehicles at most.

Under these circumstances, we find that there was sufficient

evidence to support the Board’s conclusion that adding the

dealerships would not serve the public interest and was not warranted

by existing economic conditions when balancing the interests involved.

Accordingly, we conclude that the Board’s findings should not be

disturbed because they were not against the manifest weight of the

evidence, and its ultimate conclusion to grant the protests was not

clearly erroneous.

III. Vagueness

GMC next argues that the Act is unconstitutionally vague because

a manufacturer cannot determine in advance when a dealership can be

added to the market. In support of its argument, GMC relies upon

Fields Jeep-Eagle, Inc. v. Chrysler Corp., 163 Ill. 2d 462 (1994),

where this court held a previous version of the Act unconstitutional on

separation of powers grounds.

In determining whether a statute has been shown to be

unconstitutional, we begin with the presumption that all statutes are

constitutional. People v. Waid, 221 Ill. 2d 464, 480 (2006). The

burden of rebutting that presumption is on the party challenging the

validity of the statute to demonstrate clearly a constitutional violation.

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People v. Greco, 204 Ill. 2d 400, 406 (2003). If reasonably possible,

a statute must be construed so as to affirm its constitutionality and

validity. Greco, 204 Ill. 2d at 406.

A statute is not unconstitutionally vague if it is explicit enough to

serve as a guide to those who must comply with it. Ardt v. Illinois

Department of Professional Regulation, 154 Ill. 2d 138, 157 (1992).

Moreover, a statute is considered unconstitutionally vague only if its

terms are so ill-defined that the ultimate decision as to its meaning

rests on the opinions and whims of the trier of fact rather than any

objective criteria or facts. People ex rel. Sherman v. Cryns, 203 Ill. 2d

264, 291 (2003); People v. Burpo, 164 Ill. 2d 261, 266 (1995).

As noted above, section 2(v) of the Act defines “good cause” and

section 12(c) sets forth 11 circumstances the court must consider in

determining “good cause.” 815 ILCS 710/2(v), 12(c) (West 2004).

Administrative agencies must often resolve similar “cause” questions

against vagueness challenges because courts understand that it is

difficult for an administrative agency to anticipate every type of

conduct that might constitute “good cause.” See Ford Motor Co. v.

Motor Vehicle Review Board, 338 Ill. App. 3d 880, 889 (2003). But

the Franchise Act is even more detailed than some statutes that have

been upheld because it contains 11 factors for the Board to assess to

guide its determination.

In Piano v. State of California ex rel. New Motor Vehicle Review

Board, 103 Cal. App. 3d 412, 163 Cal. Rptr. 41 (1980), a California

court upheld the constitutionality of an automobile franchise statute

that is analogous to the Illinois Act, having a “good cause” standard

with just five statutory circumstances to consider to aid the

determination. The court held that the standards set forth in the statute

were adequate to guide those persons to be governed by the act, as

well as the hearing officer, the agency and the courts charged with

deciding cases under it. Piano, 103 Cal. App. 3d at 418, 163 Cal.

Rptr. at 44. In so holding, the court noted that fixing any more rigid

a standard would subvert the very purpose behind the delegation of

authority to the agency–which is to leave the decision to the body with

the expertise of handling complicated decisions that depend on “ ‘the

individual and varying local conditions.’ ” Piano, 103 Cal. App. 3d at

418, 163 Cal. Rptr. at 44, quoting Jenner v. City Council of the City

of Covina, 164 Cal. App. 2d 490, 499, 331 P.2d 176, 182 (1958).

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GMC’s reliance on Fields Jeep-Eagle, Inc. v. Chrysler Corp., 163

Ill. 2d 462 (1994), is misplaced. There, this court held an earlier

version of the Franchise Act (see Ill. Rev. Stat. 1989, ch. 121½, pars.

754(e)(8), 762(c); see also 815 ILCS 710/4(e)(8), 12(c) (West 1992))

unconstitutional based on separation of powers grounds, finding that

courts are not adequately equipped to make the difficult decision of

“independently and originally appraising and determining the

appropriate location for a business.” Fields, 163 Ill. 2d at 472. In so

doing, this court commented that several of the statutory

circumstances that the court is to inquire into are “subjective and/or

speculative in nature and involve competing public and private

interests.” Fields, 163 Ill. 2d at 476. GMC seizes upon this language

to argue that the statutory scheme is unconstitutionally vague. GMC

takes this language from Fields out of context, however, because the

court was merely making its observation in the context of noting that

courts are not equipped to make the statutory determination because

it involves a legislative inquiry into the public interest, which could not

be delegated to the judiciary. Fields, 163 Ill. 2d at 478-79. Fields

observed that the majority of state statutes provide for a single

administrative agency or board to hear and to decide the merits of

protests against the establishment of an additional dealership in a

particular area. Fields, 163 Ill. 2d at 477. The reason that it is best to

have a board decide these kinds of issues in the first instance is that

“[t]he independent determination of what facts are pertinent and the

assessment of those facts as they bear upon whether a business should

be allowed to operate at a given location are not functions which

courts are generally equipped to perform or with which they should

be burdened ***.” Fields, 163 Ill. 2d at 477.

In response to the Fields decision, the legislature amended the Act

to create a Motor Vehicle Review Board to hear dealer protests under

the Act. 815 ILCS 710/1 et seq. (West 1996) (amended by Pub. Act

89–145, eff. July 14, 1995). Nothing in Fields indicates that the

language of the Act would be unconstitutionally vague if a board were

created to hear disputes under the Act. Indeed the opposite conclusion

can be drawn from the concluding paragraph of Fields, where this

court recognized the interest of the State in regulating the dealings of

motor vehicle manufacturers and dealers so as to redress the disparity

in economic and bargaining power between manufacturers and their

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franchises. Fields, 163 Ill. 2d at 479-80. The court in Fields

concluded that it was aware that numerous states have enacted

regulatory legislation requiring a determination of whether to allow

the establishment of a dealership based on the same or similar factors

as those set out in section 12(c) of the Act. Fields, 163 Ill. 2d at 480.

GMC does not cite any case holding a “good cause” standard

unconstitutionally vague where an agency’s decision was guided by a

list of statutory factors to aid its determination. Nor does GMC offer

any persuasive argument to support its position. Accordingly, we find

that the Act’s standard for making a “good cause” determination is

not unconstitutionally vague.

IV. Commerce Clause

GMC next argues that the Franchise Act violates the commerce

clause of the United States Constitution (U.S. Const., art. I, §8, cl. 3).

According to GMC, the statute improperly favors purely local

interests over interstate commerce because it contains a provision that

states that “good cause shall not be shown solely by a desire for

further market penetration.” See 815 ILCS 710/12(c)(7) (West 2004).

A state statute is valid under the commerce clause if it

evenhandedly effectuates a legitimate local public interest, the effect

on interstate commerce is only incidental, and the burden on

commerce is not clearly excessive to the local benefits. Pike v. Bruce

Church, Inc., 397 U.S. 137, 142, 25 L. Ed. 2d 174, 178, 90 S. Ct.

844, 847 (1970). If a legitimate local purpose is found, then the

question becomes one of degree: the extent of the burden that will be

tolerated will depend on the nature of the local interest involved, and

on whether it could be promoted as well with a lesser impact on

interstate activities. Pike, 397 U.S. at 142, 25 L. Ed. 2d at 178, 90 S.

Ct. at 847.

The United States Supreme Court has upheld the constitutionality

of a California automobile franchise statute that is similar to Illinois’

statute, finding a disparity of bargaining power between automobile

manufacturers and their franchisees, and holding that such laws

promote fair dealing and protect small businesses. New Motor Vehicle

Board v. Orrin W. Fox Co., 439 U.S. 96, 100-02, 58 L. Ed. 2d 361,

370-71, 99 S. Ct. 403, 407-08 (1978). Additionally, the Fourth Circuit

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Court of Appeals relied upon Orrin Fox and upheld a franchise statute

against a commerce clause challenge where the statute prohibited

establishment of an automobile franchise if the State Commissioner of

Motor Vehicles determined the market could not support all of the

dealerships. American Motor Sales Corp. v. Division of Motor

Vehicles of Commonwealth of Virginia, 592 F.2d 219 (4th Cir. 1979).

We find that our Franchise Act serves the same legitimate public

interests noted in Orrin Fox and American Motors Sales. See also

Fireside Nissan, 30 F.3d at 218 (“Certainly the state’s desire to

protect local dealers and consumers from harmful franchising practices

is a lawful legislative goal”). Thus, we find that the Franchise Act

effectuates a legitimate local interest under the Pike test.

The cases relied upon by GMC to support its commerce clause

argument are either distinguishable or unpersuasive. See General

GMC Trucks, Inc. v. General Motors Corp., 239 Ga. 373, 377, 237

S.E.2d 194, 197 (1977); H.P. Hood & Sons, Inc. v. Du Mond, 336

U.S. 525, 530-31, 93 L. Ed. 865, 870, 69 S. Ct. 657, 661 (1949);

Buck v. Kuykendall, 267 U.S. 307, 313, 69 L. Ed. 623, 625, 45 S. Ct.

324, 325 (1925). In General GMC Trucks, the Georgia Supreme

Court found its state’s automobile franchise statute unconstitutional

because it did not effectuate a public interest. General GMC Trucks,

Inc., 239 Ga. at 377, 237 S.E.2d at 197. The case was decided,

however, before the United States Supreme Court rendered its

decision in Orrin Fox, which expressly found the protection of

existing new-car dealers to be a legitimate purpose. Thus, the Georgia

Supreme Court’s decision is of limited value.

Buck is distinguishable because the Franchise Act does not

distinguish between out-of-state and in-state manufacturers and

therefore it regulates evenhandedly. In contrast, the statute in Buck

applied to common carriers engaged exclusively in interstate

commerce. Buck, 267 U.S. at 313, 69 L. Ed. at 625, 45 S. Ct. at 325.

H.P. Hood is also distinguishable. There, the avowed purpose of

a law regulating the milk industry was economic isolation and the

curtailment of the volume of interstate commerce. H.P. Hood & Sons,

Inc., 336 U.S. at 530-31, 93 L. Ed. at 870, 69 S. Ct. at 661. In the

present case, the Franchise Act has the legitimate purpose of

redressing the disparity in bargaining power between manufacturers

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and their franchisees, and there has been no showing of any decrease

in interstate commerce.

Finally, we conclude that the Franchise Act passes constitutional

muster under the Pike test because any burden that the Act places on

interstate commerce is not clearly excessive in relation to the local

benefits. As the appellate court noted,

“In finding that the Virginia statute did not impose such a

burden, the Fourth Circuit noted that even with the statute, the

manufacturer and its competitors can still supply the market

area with all the vehicles it can absorb, and the public can still

buy the manufacturer’s brand from the existing dealership or

choose to buy a competitive brand. American Motors, 592

F.2d at 223. It also noted that in addressing the antitrust issue

in New Motors, the Supreme Court recognized the California

Act did have an anticompetitive effect but noted that ‘ “ ‘if an

adverse effect on competition were, in and of itself, enough to

render a state statute invalid, the States’ power to engage in

economic regulation would be effectively destroyed.’ ” ’

American Motors, 592 F.2d at 224, quoting New Motor, 439

U.S. at 111, 58 L. Ed. 2d at 376-77, 99 S. Ct. at 412, quoting

Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 133, 57

L. Ed. 2d 91, 105, 98 S. Ct. 2207, 2218 (1978). Thus, the

Fourth Circuit noted something in addition to such a restraint

on competition must be shown to establish an unconstitutional

burden on interstate commerce, and there, no other effect than

a restriction of intrabrand competition was demonstrated.”

361 Ill. App. 3d at 286-87, quoting American Motors, 592

F.2d at 224.

We agree with the analysis of our appellate court and the Fourth

Circuit in American Motors. GMC has not demonstrated any other

effect beyond a restriction on intrabrand competition. Therefore, the

Act does not place an excessive burden on interstate commerce, and

we conclude that the it does not violate the commerce clause.

V. Equal Protection and Special Legislation

GMC’s final argument is that the Act violates the equal protection

clause of both the Illinois Constitution of 1970 (Ill. Const. 1970, art.

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I, §2), and the United States Constitution (U.S. Const., amend. XIV),

as well as the special legislation clause of the Illinois Constitution (Ill.

Const. 1970, art. IV, §13). GMC contends that there is no principled

basis for giving protection to car dealership franchises but denying the

same kind of protection to other types of franchises.

The special legislation clause prohibits the General Assembly from

conferring a special benefit or privilege upon one person or group and

excluding others that are similarly situated. Schiller, 221 Ill. 2d at 149.

A special legislation challenge is generally judged by the same

standards as an equal protection claim. Crusius v. Illinois Gaming

Board, 216 Ill. 2d 315, 325 (2005). Moreover, in applying an equal

protection analysis, we apply the same standard under both the United

States Constitution and the Illinois Constitution. Wauconda Fire

Protection District v. Stonewall Orchards, LLP, 214 Ill. 2d 417, 434

(2005).

A special legislation inquiry first involves the determination of

whether the statute discriminates in favor of a select group. Allen v.

Woodfield Chevrolet, Inc., 208 Ill. 2d 12, 22 (2003). If it does, this

court must then determine whether the classification created by the

statute is arbitrary. Allen, 208 Ill. 2d at 22. Where the statute does not

affect a fundamental right or involve a suspect classification, it will be

judged under the deferential rational basis test, and the statute will be

upheld if the legislative classification is rationally related to a

legitimate state interest. Crusius, 216 Ill. 2d at 325. Thus, if this court

can reasonably conceive of any set of facts that justify a distinction

between the class the statute benefits and the class outside its scope,

we will uphold the statute. Crusius, 216 Ill. 2d at 325. Again, we note

that a statute carries a presumption of constitutionality and the party

attacking it bears the burden of establishing its infirmity. Schiller, 221

Ill. 2d at 148.

Here, we find that the Franchise Act creates a legislative

classification by treating existing automobile dealers differently than

other kinds of franchise owners. However, the classification is related

to the legitimate government purposes of redressing the disparity in

bargaining power between automobile manufacturers and their

existing dealers and of protecting the public from the negative impact

of harmful franchise practices by automobile manufacturers.

Additionally, the means employed by the statute–requiring a

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determination by a neutral body that establishing a new dealership

satisfies the “good cause” standard by taking into account

considerations that are directly related to the purposes served by the

statute–is rationally related to the legitimate purposes of the statute.

Accordingly, we find that GMC has not met its burden of establishing

that the statute is unconstitutionally infirm.

CONCLUSION

For the foregoing reasons, we affirm the judgment of the appellate

court.

Affirmed.

JUSTICE KARMEIER, dissenting:

The majority opinion implicitly recognizes that the Act itself fails

to provide a serviceable definition of “good cause” and “commercial

reasonableness,” and it casts about in search of one (see slip op. at 9-

10), but a coherent and workable definition is never found or applied.

The court touts a definition of “commercial reasonableness” it derives,

not from a franchising context, but from a California case dealing with

bulk sales and California’s Uniform Commercial Code (slip op. at 10,

citing Gifford v. J. & A. Holdings, 54 Cal. App. 4th 996, 63 Cal. Rptr.

2d 253 (1997)), defining “commercial reasonableness” as “commonly

accepted commercial practices of responsible businesses which afford

all parties fair treatment” (see slip op. at 10, quoting Gifford, 54 Cal.

App. 4th at 1005-06, 63 Cal. Rptr. 2d at 259); however, I see no

evidence that the court has utilized even that standard in its review of

this matter.

Perhaps that is because the standard is so vague that it provides no

meaningful guidance to either the parties whom it affects, the

administrative body charged with implementing it, or courts which

must review the administrative action. Perhaps it is because the

definition has no real utility in the context of an Act whose sole

purpose is to protect only one group: motor vehicle franchisees.

With respect to the first possibility, I would acknowledge that the

legislature may delegate authority to an administrative body to

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perform certain functions, however, in order to properly delegate such

authority, the legislature must provide sufficient standards to guide the

administrative body in the exercise of its functions. See East St. Louis

Federation of Teachers, Local 1220 v. East St. Louis School District

No. 189 Financial Oversight Panel, 178 Ill. 2d 399, 423 (1997). A

law vesting discretionary power in an administrative body or officer

must properly define the terms under which the discretion is to be

exercised (In re Application for Judgment & Sale of Delinquent

Properties for the Tax Year 1989, 167 Ill. 2d 161, 176 (1995)) and

provide intelligible standards (Hoogasian v. Regional Transportation

Authority, 58 Ill. 2d 117, 130 (1974)). Similarly, in order to provide

adequate notice to those whom it affects, the statute must be explicit

enough to serve as a guide to those who must comply with it. Ardt v.

Illinois Department of Professional Regulation, 154 Ill. 2d 138, 157

(1992). A statute is considered unconstitutionally vague if its terms

are so ill-defined that the ultimate decision as to its meaning rests on

the opinions and whims of the trier of fact rather than any objective

criteria or facts. People ex rel. Sherman v. Cryns, 203 Ill. 2d 264, 291

(2003). In my opinion, the Act does not satisfy the applicable criteria.

Thus, I believe that the Act is an improper delegation of the

legislature’s authority and unconstitutionally vague. The majority’s

reliance upon the term “good cause” and the “11 circumstances” set

forth in section 12(c) of the Act (815 ILCS 710/12(c) (West 2004))

does not persuade me otherwise. With the exception of subsections

(5) and (8), those factors address only the interests of the protesting

dealers, only one of the groups whose interests are at stake. As for

subsections (5) and (8), they speak only of “the public welfare” and

the “public interest,” without providing any substantive guidance as

to what those vague concepts mean, or even who is subsumed in “the

public.” This court has previously observed that “the Act does not

state or identify what the overall or ultimate public interest is.” Fields

Jeep-Eagle, Inc. v. Chrysler Corp., 163 Ill. 2d 462, 478 (1994). As

far as I am aware, no legislative action has been taken since Fields to

remedy that deficiency.

It is that deficiency which brings the discussion to the second

possibility I previously mentioned. I believe the majority never again

discusses its imported definition of “commercial reasonableness”

because the majority at some level recognizes that the Act, and its “11

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circumstances,” display very little in the way of genuine concern for

the interests of the manufacturer, its citizen-shareholders, or

consumers generally, and it essentially provides no guidance as to how

their interests might be identified and weighed.

The disingenuously benevolent language of the Act’s “Declaration

of purpose” (815 ILCS 710/1.1 (West 2004) (purporting to promote,

inter alia, “the public interest and welfare” and that of “consumers

generally”)) rings hollow when the substantive provisions of the Act

are applied. In practice, the Act benefits neither manufacturers–and

the many citizens who have invested in them–nor consumers. This

court has acknowledged as much:

“The several statutory purposes and goals stated in this

section are consistent with neither each other nor with various

of the competing interests expressed in section 12(c).

Protecting the private economic interests of dealers in their

dealership investments and properties may, for example,

militate against the allowance of an additional dealership and

thereby frustrate the goal of protecting consumer interests by

ensuring competition and convenience for consumers.

Conversely, the allowance of an additional dealership which

has the capability of offering lower prices and better service

than an existing dealership may benefit consumers but result

in a loss of business or even the entire investment of the

existing dealer.

*** [T]he Act does not state or identify what the overall

or ultimate public interest is.” Fields Jeep-Eagle, 163 Ill. 2d

at 478.

The “standards” of the Act are inadequate to provide the guidance

necessary to achieve the purported goals of section 1.1. Thus, the

“assessment” of the administrative body becomes the “standard” itself.

See slip op. at 8.

Beyond that deficiency, and notwithstanding its seemingly lofty

purpose of protecting “the public interest and welfare” and

“consumers generally,” this Act is clearly nothing more than a

protectionist measure favoring existing motor vehicle dealerships, and

it should be acknowledged as such. In my opinion, there is no rational

basis to justify a distinction between the class the statute benefits and

-25-

the class outside its scope. In short, it is special legislation. As Justice

Cook noted in his insightful appellate court dissent: “Motor Vehicle

Franchise Acts *** were justified on the basis of a ‘disparity in

bargaining power between automobile manufacturers and their

dealers.’ [New Motor Vehicle Board v. Orrin W. Fox Co., 439 U.S.

96, 100, 58 L. Ed. 2d 361, 370, 99 S. Ct. 403, 407 (1978).]” 361 Ill.

App. 3d at 293 (Cook, P.J., dissenting). As the Supreme Court noted

in New Motor, at the time of that decision, “ ‘there exist[ed] only 5

passenger-car manufacturers, 3 of which produce[d] in excess of 95

percent of all passenger cars sold in the United States.’ ” New Motor,

439 U.S. at 100 n.4, 58 L. Ed. 2d at 370 n.4, 99 S. Ct. at 407 n.4,

quoting S. Rep. No. 2073, 84th Cong., 2d Sess., 2 (1956). That is no

longer the case. As Justice Cook observes:

“We now live in a world of franchises. Motor vehicle dealers

are given special treatment not enjoyed by other franchisees,

who must protect themselves by the contracts they sign.

Motor vehicle manufacturers from around the world now

compete in the United States. New manufacturers can put

dealers wherever they want them. Established manufacturers,

such as General Motors, cannot.” 361 Ill. App. 3d at 293

(Cook, P.J., dissenting).

Indeed, the contract is a well-known and time-honored device

particularly suited to establishing the legal rights of parties before they

enter into agreements and governing the nature and conditions of their

relationship thereafter. If dealerships wish to limit the geographical

proximity of other franchises, that would be a matter for negotiation

before an agreement is concluded, when the parties’ expectations are

on the table. I fail to see how motor vehicle franchises differ in any

significant respect from franchises for food service, home

improvement or gas stations, just to name a few. All may have citizen

investors who believe they stand to lose business and money when

other franchises are granted in their area. Perhaps I am unaware of

franchise laws protecting them; my belief is that they protect

themselves through the contracts they sign.

As for any claimed disparity in bargaining power between

automobile manufacturers and their dealers, I agree with Justice

Cook’s observation that the world has indeed changed since the

Supreme Court’s 1978 decision in New Motor, a development of

-26-

which GMC is no doubt well aware. Three manufacturers no longer

dominate the American market, as automobile manufacturers struggle

for market share, profitability, and in some instances survival. In such

a business climate it seems implausible that a manufacturer would

want to add dealerships that are not viable or purposefully risk

disruption in the chain of distribution by undermining its existing

dealerships. I simply fail to see how motor vehicle franchisees are in

a less favorable position, vis-á-vis their franchisers, than other

franchisees are with respect to theirs. The majority’s one-paragraph

rejection of GMC’s special legislation argument offers no explanation.

Because I believe the majority opinion offers no meaningful

standard of review, and because I believe the Motor Vehicle Franchise

Act is unconstitutional, I respectfully dissent.

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