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Justices rule Ed Martin Toyota can relocate to Hamilton County

June 2, 2016

Three central Indiana Toyota dealers lost their battle to stop a fourth from moving into their vicinity as the Indiana Supreme Court ruled Thursday they did not have standing to stop the move from happening.

In a unanimous decision written by Justice Mark Massa, the court affirmed an Auto Dealer Services Division decision as well as the trial court, both which ruled the three Hamilton County dealers, Andy Mohr Toyota, Butler Toyota and Tom Wood Toyota, did not have standing to protest a move by Ed Martin Toyota into Hamilton County from Madison County.

The case hinged on the interpretation of Indiana Code 9-32-2-20, which defines the relevant marketing area for which dealers can protest moves. The statute defines the area as either a six- or 10-mile area depending on the type of dealer entering it. The area is six miles for a new motor vehicle dealer who is moving to a county of more than 100,000 people, such as Hamilton County, but 10 miles for a proposed new motor vehicle dealer or a new motor vehicle dealer moving to a county of less than 100,000 people. Butler is seven miles away from the proposed site for Ed Martin Toyota, and Tom Wood and Andy Mohr are 16 and 24 miles away respectively.

The Auto Dealer Services Division ruled that the dealerships lack standing because they were more than six miles away from the site, so the dealers turned to court. The trial court upheld the division’s ruling, but the Court of Appeals reversed and remanded it, saying the division’s interpretation of the statute was not reasonable. The appeals court found Ed Martin was a proposed dealer and thus will fall under the 10-mile radius.  

Massa wrote relocating dealers do not fit into the portion of the statute regarding proposed dealers because proposed means just new dealers, and not existing ones. The court justifies this by noting the word “relocate” does not appear in the proposed dealer portion, and it does in the two other portions regarding population. Also, since all relocating dealers fit into the portions regarding population, there’s no need to include them in the portion regarding proposed dealers.

The dealers urged the Supreme Court to take another view, relying on the definition of proposed in another statute to interpret this one, but “By exclusively relying on the use of the word ‘proposed’ in another statutory section, ‘proposed’ is rendered meaningless in this Statute,” Massa wrote.

“The Statute reflects a legislative determination that relocating more than six miles away from another dealership in a densely populated area will not have such a negative effect on the market to allow incumbent dealers to stifle competition through the protest procedure,” Massa wrote. “Of course, if the legislature meant something different, it is free to more precisely reflect its intention by revising the statute.”

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