Preemption -- 2016

Alliance of Automobile Manufacturers, Inc. v. Currey   (U.S. Supreme Court)

Prohibition on recovering state-imposed dealer costs

The NAM submitted an amicus brief November 9, 2015, urging the U.S. Supreme Court to reverse the Second Circuit’s affirmation of the dismissal of claims against Connecticut’s protectionist automobile dealer state legislation. The issue is whether Connecticut’s prohibition on manufacturers from raising prices in Connecticut to account for added costs imposed by the state violates the dormant Commerce Clause. Laws such as Connecticut’s warranty reimbursement mandate and cost recovery ban impose artificially high costs on out-of-state manufacturers and consumers, solely for the benefit of in-state dealers, and bar recovery of those costs in the state that imposed them. This case presented an opportunity for the Supreme Court to ensure that state statutes burdening interstate commerce are meaningfully reviewed to assess the merits of alleged public benefits against the harms of economic restrictions. Unfortunately, the Supreme Court declined to hear the case on 3/7/16, and great concerns remain regarding the unprecedented intrusion of protectionist state legislation into the private contractual relationships between motor vehicle manufacturers and their dealers.

Because the auto industry comprises a large segment of American manufacturing, there is a looming threat of parallel state protectionism in other industries. Such measures are anticompetitive, inconsistent with innovation and advancement, and harmful to consumers.

Related Documents:
NAM brief  (November 9, 2015)


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