GNYADA October 2014 Newsletter

4 Hot Off the Press – 2014 Membership Directory

GNYADA’s 2014 Membership Directory has been sent to members. This yearly publication serves as an easy-to-navigate resource guide for your business and features a full listing of members, preferred vendors, and services offered by GNYADA. Also included is an expanded Hot Topics section, with guidance on Sales Tax Issues, Advertising Guidelines, Top OSHA Violations, Compliance Checklists, Healthcare Reform, Above Ground Storage Tanks, and other local, state, and federal compliance matters that impact your business. In addition, more than 30 advertisers who support the Association and the Membership Directory are featured. These advertisers offer products and services that are vital to dealerships. Bill Cordes will have additional copies available during his field visits. To obtain additional copies of the directory, contact the Association at 718.746.5900.

Marketing Suspensions Violate Dealers’ Rights 5

“fourth Type B violation within any twelve-month period.”

In most cases, dealers have gone to great lengths to follow AHM’s poli- cies. Although there are errors that may occur in dealer advertising from time to time, AHM would be hard- pressed to show that the dealer has fallen short of the standard required under New York law. If you have received a notice of sus- pension from AHM’s marketing pro- grams, we strongly recommend that you contact experienced motor vehi- cle franchise counsel to determine your rights under state law. The foregoing information is provided for educational purposes only and is not to be construed or interpreted as legal advice. GNYADA thanks Richard Sox, Esq., rsox@dealerlawyer.com , for the material for this item.

Although some Honda dealers received three or four notices within a year, the alleged violations did not occur within a 12-month period. That alone is a basis to challenge a proposed chargeback and suspension. New York’s franchise laws regulate suspensions from such programs. It offers strong protection against incentive denials or chargebacks and permits dealers to file an administra- tive protest or a lawsuit. The issue in any litigation over incentive denials or chargebacks will be whether the dealer’s incentive “claim was materially false or fraud- ulent or [whether] the dealer failed to reasonably substantiate the claim in accordance with the manufacturer’s reasonable procedures.”

American Honda Motor Co., Inc. (“AHM”) has been strictly enforcing its marketing guidelines, resulting in suspensions and steep penalties against Honda and Acura dealers. AHM has suspended dealers from its marketing allowance programs due to alleged violations of AHM’s poli- cies (e.g., advertising prices that are below invoice or using pictures showing a different trim than what is advertised). The marketing allowance program guidelines call for a suspension upon the “third Type A violation within any twelve-month period” or the

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • October 2014 3

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