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Indicates Matter Stricken
Indicates New Matter
Indicates Matter Stricken
Indicates New Matter
May 1, 2008
S. Printed 5/1/07--S.
Read the first time May 8, 2007.
TO AMEND SECTION 56-16-10, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS OF TERMS CONTAINED IN CERTAIN PROVISIONS THAT REGULATE MOTORCYCLE MANUFACTURERS, DISTRIBUTORS, DEALERS, AND WHOLESALERS, SO AS TO REVISE THE DEFINITIONS OF THE TERMS "MANUFACTURER", "DEALERSHIP FACILITIES", "FRANCHISE", AND "DEALER", AND TO PROVIDE DEFINITIONS FOR THE TERMS "MOTORCYCLE DEALERSHIP" AND "DEPARTMENT"; TO AMEND SECTION 56-16-40, RELATING TO THE PROCEDURE A MANUFACTURER WHO SEEKS TO ENTER INTO A FRANCHISE ESTABLISHING AN ADDITIONAL NEW MOTORCYCLE DEALERSHIP OR RELOCATING AN EXISTING NEW MOTORCYCLE DEALERSHIP IN A RELEVANT MARKET AREA WHERE THIS LINE MAKE IS REPRESENTED MUST FOLLOW, SO AS TO DELETE THE EXISTING PROCEDURE AND ESTABLISH A NEW PROCEDURE; TO ADD SECTION 56-16-45 SO AS TO PROVIDE THAT IT IS UNLAWFUL FOR CERTAIN ENTITIES TO OWN, OPERATE, OR CONTROL A MOTORCYCLE DEALERSHIP OR TO ESTABLISH AN ADDITIONAL DEALER OR MOTORCYCLE DEALERSHIP UNDER CERTAIN CIRCUMSTANCES, TO PROVIDE THAT IT IS UNLAWFUL FOR CERTAIN ENTITIES TO COMPETE UNFAIRLY WITH A MOTORCYCLE DEALER UNDER CERTAIN CIRCUMSTANCES, TO PROVIDE THAT IT IS UNLAWFUL FOR CERTAIN ENTITIES TO OWN A FACILITY THAT ENGAGES PRIMARILY IN THE REPAIR OF MOTORCYCLES; TO AMEND SECTION 56-16-50, RELATING TO THE COMPENSATION OF A MOTORCYCLE DEALER UPON TERMINATION, NONRENEWAL, OR CANCELLATION OF A FRANCHISE BY A MANUFACTURER OR DISTRIBUTOR, SO AS TO MAKE A TECHNICAL CHANGE, TO PROVIDE THAT THE PROVISIONS CONTAINED IN SECTION 56-16-45 ARE APPLICABLE TO THIS PROVISION, TO PROVIDE THAT THE MOTORCYCLE DEALER MUST BE COMPENSATED FOR THE REASONABLE GOOD WILL FOR THE FRANCHISE, AND TO REVISE THE CONDITIONS UPON WHICH A DEALER MAY BE COMPENSATED; TO ADD SECTION 56-16-85 SO AS TO PROVIDE THAT THE PROVISIONS THAT REGULATE MOTORCYCLE MANUFACTURERS, DISTRIBUTORS, DEALERS, AND WHOLESALERS APPLY TO ALL WRITTEN AND ORAL AGREEMENTS BETWEEN A MANUFACTURER, FACTORY BRANCH, DISTRIBUTOR BRANCH, DISTRIBUTOR, WHOLESALER, OR FRANCHISOR WITH A MOTORCYCLE DEALER; TO ADD SECTION 56-16-86 SO AS TO PROVIDE THAT A DEALERSHIP MAY CONTRACT WITH AN ON-LINE ELECTRONIC SERVICE TO PROVIDE MOTORCYCLES TO CONSUMERS IN THIS STATE; TO AMEND SECTION 56-16-100, RELATING TO CERTAIN PRACTICES ENGAGED IN BY A MANUFACTURER, FACTORY BRANCH, FACTORY REPRESENTATIVE, OR MOTORCYCLE DEALER WHICH ARE UNLAWFUL, SO AS TO PROVIDE THAT THIS PROVISION ALSO APPLIES TO WHOLESALERS AND WHOLESALER REPRESENTATIVES, TO MAKE TECHNICAL CHANGES, AND TO PROVIDE THE STANDARD OF PROOF THAT A MANUFACTURER MUST BEAR IN A PROCEEDING THAT ARISES PURSUANT TO THIS SECTION; TO AMEND SECTION 56-16-200, RELATING TO RELIEF AVAILABLE TO PERSONS INJURED PURSUANT TO THE PROVISIONS CONTAINED IN THIS CHAPTER, SO AS TO PROVIDE FOR ADDITIONAL INJUNCTIVE RELIEF, AND TO PROVIDE THAT PUNITIVE DAMAGES MAY BE AWARDED IF A DEFENDANT HAS ACTED IN BAD FAITH; TO ADD SECTION 56-16-205 SO AS TO PROVIDE FOR THE STATUTE OF LIMITATIONS FOR THE COMMENCEMENT OF AN ACTION THAT ARISES OUT OF A PROVISION RELATING TO THE REGULATION OF MOTORCYCLE MANUFACTURERS, DISTRIBUTORS, DEALERS, AND WHOLESALERS; TO AMEND SECTION 56-16-210, RELATING TO CONTRACTS THAT VIOLATE THE PROVISIONS THAT REGULATE MOTORCYCLE MANUFACTURERS, DISTRIBUTORS, DEALERS, AND WHOLESALERS, SO AS TO PROVIDE THAT THIS STATE'S LAW APPLIES TO ANY FRANCHISE FOR A DEALERSHIP LOCATED IN THIS STATE, AND THAT VENUE IS IN THIS STATE FOR AN ACTION BROUGHT PURSUANT TO THESE PROVISIONS; AND TO REPEAL SECTION 56-16-70, RELATING TO A DEALER'S VOLUNTARY CANCELLATION, NONRENEWAL, OR TERMINATION OF A FRANCHISE AGREEMENT.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 56-16-40 of the 1976 Code is amended to read:
"Section 56-16-40. If a manufacturer seeks to enter into a franchise establishing an additional
new motorcycle dealership or relocating an existing new motorcycle dealership in a relevant market area where the line make line-make is represented, the manufacturer shall, in writing, first notify each new motorcycle dealer in this line make line-make in the relevant market area of the intention to establish an additional dealership or to relocate an existing dealership in the market area. The relevant market area is a radius of three fifteen miles around an existing dealership a location that sells motorcycles pursuant to the franchise. Within fifteen forty-five days of receiving the notice by certified mail or within fifteen forty-five days after the end of any appeal procedure provided by the manufacturer, the new motorcycle dealership may commence a civil action in a court of competent jurisdiction challenging the establishing or relocating of the new motorcycle dealership. Thereafter, the manufacturer shall not establish or relocate the proposed new motorcycle dealership unless the court has determined that there is good cause for permitting the establishment or relocation of the motorcycle dealership.
The court shall enjoin or prohibit the establishment of the new or relocated dealership within a fifteen mile radius of the existing dealership unless the manufacturer shows by a preponderance of the evidence that the existing dealership is not providing adequate representation of the line-make and that the new or relocated dealership is necessary to provide the public with reliable and convenient sales and service within that area. The burden of proof in establishing adequate representation is on the manufacturer. In determining whether good cause has been established for entering into or relocating an additional franchise for the same line-make, the court shall take into consideration the existing circumstances, including, but not limited to:
(1) the impact the establishment of the additional or relocated dealership will have on consumers, the public interest, and the existing dealership. However financial impact may be considered only with respect to the existing dealership;
(2) the size and permanency of investment reasonably made and the reasonable obligations incurred by the existing dealership to perform its obligation pursuant to the dealership's franchise agreement;
(3) the reasonably expected market penetration of the line-make after consideration of all factors which may affect the penetration including, but not limited to, demographic factors such as age, income, education, product popularity, retail lease transactions, and other factors affecting sales to consumers;
(4) actions by the manufacturer in denying its existing dealership of the same line-make the opportunity for reasonable growth, market expansion, or relocation, including the availability of the line-make in keeping with reasonable expectations of the manufacturer in providing an adequate number of dealerships;
(5) attempts by the manufacturer to coerce the existing dealership into consenting to an additional or relocated dealership of the same line-make within a fifteen mile radius of the existing dealership;
(6) distance, travel time, traffic patterns, and accessibility between the existing dealership of the same line-make and the location of the proposed new or relocated dealership;
(7) the likelihood of benefits to consumers from the establishment or relocation of the dealership, which benefits may not be obtained by other geographic or demographic changes, or other expected changes within a fifteen mile radius of the existing dealership;
(8) whether the existing dealership is in substantial compliance with its franchise agreement;
(9) whether there is adequate interbrand and intrabrand competition with respect to the line-make, including the adequacy of sales and service facilities;
(10) whether the establishment or relocation of the proposed dealership appears to be warranted and justified based on economic and market conditions pertinent to dealerships competing within a fifteen mile radius of the existing dealership, including anticipated changes; and
(11) the volume of service business transacted by the existing dealership.
The reopening in a relevant market area of a
new motorcycle dealership within two miles of a location at which a former dealership of the same line make line-make had been in operation within the previous two years is not considered the establishment of a new motorcycle dealership.
The relocation of an existing dealer within its area of responsibility as defined in the franchise agreement is not subject to this section if the proposed relocation site is not within five miles of an existing dealer of the same
line make line-make.
In determining whether good cause has been established for not entering into or relocating an additional franchise for the same line make, the court shall take into consideration the existing circumstances, including, but not limited to:
(a) the permanency of the investment;
(b) the effect on the retail new motorcycle business and the consuming public in the relevant market area;
(c) whether it is injurious to the public welfare for an additional new motor dealership to be established;
(d) whether the new motorcycle dealers of the same line make in that relevant market area are providing adequate competition and convenient consumer care for the motorcycles of the line make in the market area including the adequacy of motorcycle sales and service facilities, equipment, supply of motorcycle parts, and qualified service personnel;
(e) whether the new motorcycle dealers of the same line make in the relevant market area are providing adequate market penetration and representation. Good cause is not shown solely by a desire for further market penetration;
(f) whether the establishment of an additional new motorcycle dealership would increase competition and therefore be in the public interest; and
(g) the growth or decline in population and new motorcycle registrations in the relevant market area."
SECTION 2. Chapter 16, Title 56 of the 1976 Code is amended by adding:
"Section 56-16-220. In an action brought pursuant to this article, venue is in the State of South Carolina. A provision of a franchise or other agreement with contrary provisions is void and unenforceable."
SECTION 3. Chapter 16, Title 56 of the 1976 Code is amended by adding:
"Section 56-16-230. An action rising out of a provision of this chapter must be commenced within four years after the cause of action accrues. However, if a person liable under this chapter conceals the cause of action from the knowledge of the person entitled to bring it, the period prior to the discovery of his cause of action by the person entitled to bring it must be excluded in determining the time limited for the commencement of the action. If a cause of action accrues during the pendency of a civil, criminal, or administrative proceeding against a person brought by the United States, or any of its agencies, under the antitrust laws, the Federal Trade Commission Act, or another federal act, or the laws of the State related to antitrust laws or to franchising, the action may be commenced within one year after the final disposition of the civil, criminal or administrative proceeding."
SECTION 4. This act takes effect upon approval by the Governor.
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