Injunction Obtained Against Major Auto Manufacturer

Rocco Di Pucchio and Paul Fruitman recently obtained an injunction preventing a major auto manufacturer from disclosing that a notice of termination had been delivered to the dealer and from taking steps to prospect for a replacement dealer while an arbitration proceeding was pending under the National Automobile Dealers Arbitration Program (“NADAP”) Rules. This is the first time such relief has been litigated and obtained under the NADAP Rules. 

 The dealer had opposed the termination under NADAP and referred the matter to arbitration.  The manufacturer sought a green light to prospect for a new dealer before the validity of the termination was adjudicated under NADAP.  The manufacturer’s argument that it had a right to do so under both the Dealer Agreement and the NADAP Rules was rejected by the Arbitrator. 

 This injunction will allow the dealer to continue to operate as a dealer in good standing while the appropriateness of the termination is adjudicated, without the risk of the notice of termination being disclosed to third parties, or a new dealer being conditionally appointed by the manufacturer while the dispute is ongoing.