STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

YAMAHA MOTOR CORPORATION, U.S.A, )

)

Petitioner, )

)

vs. ) CASE NO. 81-1619RX

) STATE OF FLORIDA, DEPARTMENT OF ) HIGHWAY SAFETY AND MOTOR ) VEHICLES, DIVISION OF MOTOR ) VEHICLES, )

)

Respondent. )

)

FINAL ORDER

On July 15, 1981, a hearing was held before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings. This hearing took place in a hearing room provided by the Division of Administrative Hearings in its offices at 2009 Apalachee Parkway, Tallahassee, Florida.

APPEARANCES

For Petitioner: Haywood M. Ball, Esquire

Post Office Box 479 Jacksonville, Florida 32201

and

Dean Bunch, Esquire Post Office Drawer 1170

Tallahassee, Florida 32302

For Respondent: Enoch J. Whitney, Esquire

Michael J. Alderman, Esquire Department of Highway Safety

and Motor Vehicles

The Neil Kirkman Building Tallahassee, Florida 32301

ISSUES

The matters presented here concern rules challenges against the Rule 15C- 1.08, Florida Administrative Code, and certain other policies of the Respondent which the Petitioner claims to be rules within the meaning of Subsection 120.52(14), Florida Statutes.

The initial challenge in this Petition deals with the aforementioned Rule 15C-1.08, Florida Administrative Code, and the Petitioner, by this attack, argues that the rules provision in question is an invalid exercise of delegated legislative authority within the meaning of Section 120.56, Florida Statutes, due to an alleged impermissible expansion of the statutory scheme for the

licensure of new motor vehicle dealers in the State of Florida as contemplated by Section 320.642, Florida Statutes.

The Petitioner, by this action, also takes issue with the alleged policy of the Respondent dealing with the acceptance of protests from previously licensed motor vehicle dealers selling motor vehicles of the same manufacturer as the proposed licensee, filed in opposition to the grant of a license to the proposed licensee which protests are filed prior to the time of application on the part of the proposed dealer. The Petitioner, in addition, challenges the alleged policy of the Respondent which would cause the Respondent to accept protests by existing dealers directed against the licensure of a proposed dealer, without reference to whether the protestant is located in the same "community or territory," based upon the fact that the existing dealership is located in a county adjacent to the county of the proposed dealership. Both of the described policies, according to the Petitioner, are invalid for reason that they fail to meet the requirements for rule adoption as set forth in Section 120.54, Florida Statutes, and for reason that they are an invalid exercise of delegated legislative authority within the meaning of Section 120.56, Florida Statutes, in that the policies are contrary to the enabling legislation found in Section 320.642, Florida Statutes.

FINDINGS OF FACT 1/

1. This cause comes on for consideration based upon the Petition for determination of the invalidity of rules filed on June 16, 1981, by Petitioners Yamaha Motor Corporation, U.S.A. (Yamaha) and Daniel P. Schmitt d/b/a Gulfview Yamaha (Gulfview), as received by the State of Florida, Division of Administrative Hearings. The jurisdictional theory for filing this case was that provision Section 120.56, Florida Statutes. Subsequent to the receipt of the Petition, the Director of the Division of Administrative Hearings reviewed the Petition, and following case assignment on June 25, 1981, the case was heard by the undersigned on July 15, 1981.

   
   

2. The Petitioner, Daniel P. Schmitt d/b/a Gulfview Yamaha, dismissed his rules challenge on August 7, 1981. This Notice of Voluntary Dismissal was acknowledged by an order of the undersigned dated August 10, 1981. The Notice of Voluntary Dismissal and attending order followed the closure of the case of Yamaha Motor Corporation, U.S.A. and Daniel R. Schmitt d/b/a Gulfview Yamaha, Petitioners, vs. The State of Florida, Department of Highway Safety and Motor Vehicles, Division of Motor Vehicles and Mike Thweatt d/b/a Mike's Yamaha, et al., Respondents DOAH Case No. 81-1104. The dismissal and closure of that Division of Administrative Hearings' case pertained to protests before the Division of Motor Vehicles, filed by existing Yamaha motorcycle dealers and the efforts on the part of the Co-Petitioners in DOAH Case No. 81-1104, to gain a Florida motor vehicle dealer's license for Daniel R. Schmitt. The Schmitt dealership is to be located in Pasco County, Florida. The four (4) protesting dealers located in counties adjacent to Pasco County had filed advance protests to the grant of the new license to Daniel R. Schmitt and had done so three (3) weeks prior to Schmitt's filing for licensure.

   
   

3. One of the parties to that action, namely Barney's Motorcycle Sales, Inc., withdrew its protest and the remaining private parties stipulated to a settlement. This now allows Daniel R. Schmitt to be licensed as a Florida motor vehicle dealer, that Petitioner having fulfilled other requirements for licensure.

4. There remains for consideration the claim of Yamaha Motor Corporation, U.S.A., for determination of rules invalidity.

   
   

5. Petitioner Yamaha is an importer and distributor of motorcycles manufactured in Japan and the Petitioner controls the marketing of that merchandise in the United States and the grant of franchise agreements to independent dealers in this country, to include those dealers who must be licensed by the Respondent in order to sell motorcycles in the State of Florida.

   
   

6. The Respondent, State of Florida, Department of Highway Safety and Motor Vehicles, Division of Motor Vehicles, is the agency assigned the ask of licensing meter vehicle dealerships in the State of Florida, as required by the terms and conditions of Chapter 320, Florida Statutes. In particular, this determination must be made in keeping with Section 320.642, Florida Statutes. 2/

   
   

7. In carrying out its responsibilities under Chapter 320, Florida Statutes, the Respondent has promulgated Rule 15C-1.08, Florida Administrative Code, dealing with the filing of a license application by a new motor vehicle dealer and the protest rights of existing licensed motor vehicle dealers of the same make. Rule 15C-1.08 states:

   
   

   Preliminary filing of an application for a motor vehicle dealer's license; procedure.

   Any person who contemplates the establishment of a motor vehicle business for the purpose of selling new motor vehicles, for which a franchise from the manufacturer, distributor or importer thereof is required, shall, in advance of acquiring building and facilities necessary for such an establishment, notify the Director of the Division of Motor Vehicles of his intention to establish such motor vehicle business. Such notice shall

   be in the form of a preliminary filing of his application for license and shall be accompanied by a copy of any proposed franchise agreement with, or letter of

   intent to grant a franchise from, the manufacturer, distributor or importer, showing the make of vehicle or vehicles included in the franchise; location of the proposed business; the name or names of any other dealer or dealers in the surrounding trade areas, community or territory who are presently franchised to sell the same make or makes of motor vehicles.

   
   

   Upon receipt of such notice the Director shall be authorized to proceed with making the determination required by Section 320.642, Florida Statutes, and shall cause a notice to be sent to tone presently licensed franchised dealers for the same make or makes of vehicles in the territory or community in which the new dealership proposed to locate, advising such dealers of

   the provisions of Section 320.642, Florida Statutes, and giving them and all real parties in interest an opportunity to be heard on such matters specified in that Section. Such notice need not be given to any presently licensed franchised dealer who has stated in writing that he will not protest the establishment of a new dealership which will deal in the make or makes of vehicles to be included in the proposed franchise in the territory or community in which the new dealership proposes to locate. Any such statements or letters of no protest shall have been issued not more than three months before the date of filing of the preliminary application. The Director may make such further investigation and hold

   such hearing as he deems necessary to determine the question specified under Section 320.642. A determination so made by the Director shall be effective as to such license for a period of twelve (12) months from the date of the Director's Order, or date of final judicial determination in the event of an appeal, unless for good cause a different period is set by the Director in his order of determination.

   
   

8. On the subject of protests by existing dealers, Paragraph 5.A. of the Petitioner's Exhibit No. 5, admitted into evidence, a policy memorandum by the Respondent, contains language which states:

   
   

9. Definition for community or territory:

   
   

   1. All licensed dealers of like franchise in the county in which a new point is being considered.

      
      

   2. Any geographical distance where the new point would be in a joining county of the same marketing area as an area previously served. (Example - northern boundary of county A and southern boundary of county B.)

      
      

   3. Surrounding counties where a new point is being considered in a county having no licensed dealers of like franchise.

      
      

      Inspectors are NOT REQUIRED to secure letters of no-protest or protest and DO NOT indicate to the new applicant that a license will be issued at District office level.

      
      

10. Dealers in adjoining counties to the county of the new dealer of similar make, where there is no existing dealer in the proposed dealer's county, may file protests in advance of the new dealer's application. The Respondent will not accept protests in advance from dealerships in other counties in this

    State which are not adjacent to the county of the proposed dealership. A protest in advance accepted by the Department may form the basis for a Section 120.57, Florida Statutes, hearing on the question of new dealer license.

    
    

11. Letters of advance protest are valid for one or two months. Nonetheless, they remain in the permanent file of the Department and if an application is received more than one to two months after the advance protest, the protestant will be contacted to ask him to state whether he still would be in opposition to the grant of a new license. The existing dealer must respond within a time certain.

    
    

12. The Department will accept license protests claims from any dealer in the same county as the proposed dealership on those occasions when an application for new dealership has been filed for location in a county where there is an existing dealer of the same manufacture. Under those facts, the Department will also accept protests from any dealer outside of the county where the proposed dealership is to be located, if the existing dealer of similar make has a "geographical conflict" with the applicant, meaning the protestant is just across the county line in the same "general marketing or trade area." The criteria for determining the "geographical conflict" between an existing and proposed dealership are premised upon an examination of map distances.

    
    

13. Any protest filed by a similar make dealer in an adjacent county to the proposed dealer, where there is no dealership in the county in which the proposed dealership would be located, will always be accepted by the Respondent.

    
    

14. In addition to the participatory rights of existing dealers previously discussed, when an application is received for a new dealer license, those existing dealers who sell the same make of motor vehicle, who are located in the county of the proposed new dealership are notified of their rights to protest the grant of the new dealer license pursuant to Section 320.642, Florida Statutes. If there are no dealers in the county where the proposed dealership would be located, then a determination is made by the Department on the question of whether there exists other dealerships in the same "trade or marketing area" or "territory or community" of the applicant and if such dealers exist who sell the same make of motor vehicle, they are notified of their right to protest under the above-referenced provision of law. Should the determination be made that there are no existing dealers in the same county, or "territory or community," as that of the proposed dealership, then no existing dealers of similar make of motor vehicle are notified of their right to protest the proposed dealership.

    
    

15. In making determinations in the notification process, after receipt of the application of the proposed dealer, the Department uses the term "territory or community" and the term "surrounding trade area" interchangeably; however, at times, "surrounding trade area" is considered to be smaller than "territory or community" and at other times larger.

    
    

16. The ultimate determination of the rights of protesting dealers to participate in the de novo hearing, held pursuant to Section 120.57, Florida Statutes, to consider the propriety of granting a new dealer license under the terms and conditions of Section 320.642, Florida Statutes, are determined through that hearing process; notwithstanding the fact that they have been allowed to file protests in advance of or subsequent to the filing of an application for a new license and have received further notification of the pendency of a request for a new dealer license by the methods as stated before.

17. In considering those motor vehicle dealers who sell motorcycles, their greatest sales success occurs during a limited number of months within the year, and it is important that the motorcycle dealer be in business during that season.

    
    

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction in this cause.

    
    

19. In the course of the hearing in this matter, ruling was reserved on the question of the admission of the Petitioner's Exhibits Nos. 2 and 3. Having considered their admissibility, those exhibits are now admitted.

    
    

20. During the course of the hearing, testimony by the witness Woody Harris concerning the mileage distance from the dealer location of Daniel R. Schmitt and these dealer locations of the protesting dealers was allowed as a proffer and ruling was reserved on the admissibility of those facts. Having considered that question, the proffered testimony is hereby admitted.

    
    

21. Before the Petitioner, Yamaha motor Corporation, U.S.A., may have the merits of its rules challenge considered, it must first demonstrate standing to promote that challenge. On this occasion, the Petitioner Yamaha has failed to demonstrate the necessary standing to challenge Rule 15C-1.08, Florida Administrative Code; that policy of the Respondent dealing with acceptance of protests from previously licensed dealers selling motor vehicles for the same manufacturer, which protests are filed prior to the time of the application on the part of the proposed dealer and that policy of the Respondent in which the Respondent accepts protests by exist dealers directed against the licensure of a proposed dealer, based upon the fact that the existing dealership is located in a county adjacent to the county of the proposed dealership or related to any other claim made by the Petitioner against policies of the Respondent not set forth in the Florida Administrative Code.

    
    

22. In keeping with the rationale expressed in Florida Department of Offender Rehabilitation v. Jerry, 353 So.2d 1230 (Fla. 1st DCA 1978), the Petitioner did not show that it is substantially affected by Rule 15C-1.08, Florida Administrative Code, and the aforementioned policies. It has failed to demonstrate that Yamaha has sustained injury or is in immediate danger of sustaining some direct injury, which results from the imposition of the terms of the challenged rule and policies.

    
    

23. The injury that the proposed dealer Daniel R. Schmitt might have sustained due to the utilization of an allegedly invalid rule and allegedly invalid policies of the Respondent, is now moot. Daniel R. Schmitt no longer must face the challenge of existing Yamaha motorcycle dealers and stands to receive his license, which was his ultimate goal. In recognition of the mootness of Schmitt's claim, he in the person of the same counsel who now represents Yamaha Motor Corporation withdrew the challenge to the rule and policies. The settlement of the dispute between Schmitt and the protesting dealers sounded the end of any injury which might have been sustained by Schmitt, and likewise, concluded any claims by the manufacturer Yamaha. This is particularly true in view of the fact that the regulatory scheme as set forth in Rule 15C-1.08, Florida Administrative Code, and the policies under challenge, and the underlying substantive law for consideration of the licensing question as set out in Section 320.642, Florida Statutes, primarily involves the rights and responsibilities of proposed dealers and existing dealers, and the rights

    and responsibilities afforded to the manufacturer are those gained by indirection.

    
    

24. While the manufacturer may elect to assist the proposed dealer in complying with the terms and conditions of Rule 15C-1.08, Florida Administrative Code; the questioned policies and the terms of Section 320.642, Florida Statutes the responsibility in law for dealing with these requirements resides with the proposed new dealer. It is the proposed dealer who must demonstrate an entitlement to be licensed and comply with the preliminary requirements in the license application process. This is not the responsibility of the manufacturer.

    
    

25. Yamaha is no more successful in an attempt to demonstrate the immediate danger of sustaining some direct injury due to the imposition of the terms and conditions of Rule 15C-1.08, Florida Administrative Code, and the stated policies. (Although, in the course of the hearing, it was stipulated to between counsel for the parties that there does not exist a Yamaha motorcycle dealer in Manatee County, Florida, and the further suggestion in argument under the heading of ANALYSIS found in the memorandum in support of the Petitioner's position to the effect that there are advance protests by existing Yamaha dealers now on file with the Respondent related to Manatee County, the present action does not involve challenge by a proposed dealer who would sell Yamaha motorcycles in Manatee County, Florida. A subsequent rules challenge to the given rule and policies now subject to attack in this Petition, filed by a proposed Yamaha dealer in Manatee County must be reserved for another day. Until a proposed dealer attempts to locate in Manatee County, Florida to sell

    Yamaha motorcycle products, there is absent the requisite injury or immediacy of danger of sustaining some direct injury, which would allow that proposed dealer in Manatee County to demonstrate the necessary substantial interests to gain standing to promote a similar rules challenge.)

    
    

26. The decisions of Fla. Dept. of Ed. v. Fla. Ed. Ass'n./United, etc.,

    378 So.2d 893 (Fla. 1st DCA 1979), and Dept. of Labor, etc. v. Fla. Home Builders, 392 So.2d 21 (Fla. 1st DCA 1980), also put at issue the propriety of the manufacturer promoting rules challenge claims in lieu of a claim brought by a proposed Yamaha motorcycle dealer.

    
    

27. The Court in Fla. Dept. of Ed., supra, did not feel that the FEA United had the necessary standing to challenge a rule which would allow the Professional Practices Commission to hold suspension or revocation hearings involving the certificates of the teacher members of FEA United, in lieu of rules challenges fashioned by the individual union members who held such certificates.

    
    

28. The Court in Dept. of Labor, supra, did not feel that the Builders' Association had the requisite standing to challenge rules dealing with the rights of individual builders who were members of that association, in lieu of challenges by the individual builders.

    
    

29. The manufacturer is in a position which is analogous to that of the teacher union and builders' association, in that the rule and policies which are under challenge in this cause do not directly relate to the manufacturer. They relate to the proposed dealer, and while it is recognized that the financial stake and arrangement between a manufacturer and his proposed motor vehicle franchisee is not the same as a relationship between members of a union and the union and builders within the builders' association and that association, the analogies are sufficiently similar to impose the reasoning set forth in the

    Court opinions. Following that reasoning, the manufacturer pursuing a rules challenge alone would not have the necessary standing to prosecute those claims.

    
    

30. Therefore, it is determined that Yamaha Motor Corporation is lacking the sufficient standing to challenge Rule 15C-1.08, Florida Administrative Code, and the policies of the Respondent related to advance protests filed by previously licensed dealers and the act of allowing motor vehicle dealers in adjacent counties to that of a proposed new dealership to protest the grant of a new license, and the other claims as fashioned by this Petition against the policy action by the Respondent are DISMISSED.

CHARLES C. ADAMS

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of August, 1981.

ENDNOTES

1/ The parties to this action in the person of their counsel have submitted proposed findings of fact, conclusions of law and a recommended disposition in this cause. These matters have been reviewed prior to the entry of this final order and to the extent that the proposals, conclusions and recommendations are consistent with this final order, they have been utilized. To the extent that the proposals, conclusions and recommendations are inconsistent with this final order, they are rejected.

2/ Dealer licenses in areas previously served. The department shall deny an application for a motor vehicle dealer license in any community or territory where the licensee's presently licensed franchised motor vehicle dealer or dealers have complied with licensee's agreements and are providing adequate representation in the community or territory for such licensee. The burden of proof in showing inadequate representation shall be on the licensee.

COPIES FURNISHED:

Haywood M. Ball, Esquire Post Office Box 479 Jacksonville, Florida 32201

Dean Bunch, Esquire Post Office Drawer 1170

Tallahassee, Florida 32302

Enoch J. Whitney, Esquire Michael J. Alderman, Esquire Department of Highway Safety

and Motor Vehicles

The Neil Kirkman Building Tallahassee, Florida 32301

Carroll Webb, Executive Director Administrative Procedures Committee Room 120, Holland Building Tallahassee, Florida 32301

Liz Cloud, Chief

Bureau of Administrative Codes The Capitol, Room 1802 Tallahassee, Florida 32301

Docket for Case No: 81-001619RX

Orders for Case No: 81-001619RX