STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
BMW OF NORTH AMERICA, LLC and | ) | |
HOLMAN AUTOMOTIVE, INC., | ) | |
) | ||
Petitioners, | ) | |
) | ||
vs. | ) ) | Case Nos. 08-1160 08-1295 |
POMPANO IMPORTS, INC., d/b/a | ) | 08-1296 |
VISTA MOTOR COMPANY, | ) | 08-1321 |
) | ||
Respondent. | ) | |
| ) | |
BMW OF NORTH AMERICA, LLC, MINI | ) | |
DIVISION and HOLMAN AUTOMOTIVE, | ) | |
INC., d/b/a LAUDERDALE MINI, | ) ) | |
Petitioners, | ) ) | Case No. 08-1161 |
vs. | ) ) | |
POMPANO IMPORTS, INC., d/b/a | ) | |
VISTA MINI, | ) ) | |
Respondent. | ) | |
| ) |
RECOMMENDED ORDER
Pursuant to notice, a hearing was conducted in this case pursuant to Sections 120.569 and 120.57(1), Florida Statutes,1 before Stuart M. Lerner, a duly-designated administrative law judge of the Division of Administrative Hearings (DOAH), on October 27 through 31, 2008, November 3 through 7, 2008, and
December 17, 2008, in Tallahassee, Florida.
APPEARANCES
For Petitioner BMW of North America:
Dean Bunch, Esquire
Melissa Fletcher Allaman, Esquire
J. Andrew Bertron, Jr., Esquire
Nelson Mullins Riley and Scarborough LLP 3600 Maclay Boulevard South, Suite 202
Tallahassee, Florida 32309 For Petitioner Holman Automotive, Inc.:
Kathy Mullin, General Counsel Holman Enterprises
7411 Maple Avenue
Pennsauken, New Jersey 08109 For Respondent Pompano Imports, Inc.:
John W. Forehand, Esquire Lewis, Longman and Walker, P.A. 2600 Centennial Place, Suite 100
Tallahassee, Florida 32308-0572
Barry Richard, Esquire John K. Londot, Esquire Greenberg Traurig, P.A.
101 East College Avenue Post Office Box 1838 Tallahassee, Florida 32302
STATEMENT OF THE ISSUE
Whether the proposed relocations of the existing Fort Lauderdale sales and service operations of Petitioner Holman Automotive, Inc. (Holman) for BMW passenger cars, BMW light trucks, and MINI passenger cars, as more particularly described in the notices of intent published by BMW of North America, LLC (BMW NA) in the Florida Administrative Weekly, should be permitted.
PRELIMINARY STATEMENT
On February 15, 2008, notice was published in the Florida Administrative Weekly announcing BMW NA's intent to allow Holman to relocate its Fort Lauderdale BMW passenger car, BMW light truck, and MINI sales and service operations from their existing locations to a 10-acre site in Fort Lauderdale located on the south side of East Sunrise Boulevard, approximately 1,550 feet west of where it intersects with Northeast 14th Avenue (Proposed Location). Protests to the proposed relocations were filed with the Department of Highway Safety and Motor Vehicles (Department) by Pompano Imports, Inc. (Vista), on behalf of its BMW passenger car and light truck dealership locations in Coconut Creek and Pompano Beach, as well as its MINI dealership location in Coconut Creek. The Department subsequently referred these protests to DOAH, where they were docketed as DOAH Case Nos.
08-1160, 08-1161, 08-1295, 08-1296, and 08-1321. By order
issued March 20, 2008, the cases were consolidated at the request of the parties.
On October 20, 2008, the parties filed a Pre-Hearing Stipulation, in which they stipulated to the following:
Stipulated Facts
BMW NA is a "distributor" and "licensee" as defined respectively by Section 320.60(5) and (8), Fla. Stat., and is authorized to
sell BMW passenger cars, BMW light trucks, and MINI passenger cars to its respective authorized dealers in Florida.
Holman and Vista are "motor vehicle dealers" as defined by Section 320.60(11)(a)(1), Fla. Stat., and both are existing BMW passenger car dealers, BMW light truck dealers, and MINI passenger car dealers.
The Proposed Location was properly noticed by publication in the Florida Administrative Weekly, Volume 34, Number 7, on February 15, 2008.
The Proposed Location is located in Broward County, Florida, which has more than 300,000 persons.
The parties stipulate to the authenticity of all exhibits set forth on Composite A, and that said exhibits require no further authentication as a condition precedent to admissibility, except as noted on Composite Exhibit A, with all other objections reserved.
7. Stipulated Legal Conclusions
The Division of Administrative Hearings has jurisdiction in this proceeding pursuant to Section 120.569, 120.57(1), and 320.699, Fla. Stat. (2008).
The provisions of Chapter 320, Fla. Stat. (2008), including the eleven criteria set forth in Section 320.642(2)([b]), Fla. Stat., govern this proceeding.
Pursuant to Section 320.642(2)(a)(2), Fla. Stat., BMW NA has the burden of proof.
The final hearing in the instant cases was held, as noted above, on October 27 through 31, 2008, November 3 through 7,
2008, and December 17, 2008. The following witnesses testified at the hearing: James Anderson, Wayne Orchowski, James McDowell, Dan Creed, John Ciontea, Glenn Gardner, Joseph Holman, Daniel Villani, Charles Phillips, Andrew Dolkart, Michael Perrault, Jonathan Chariff, Joseph F. Roesner, and Dr. Henry Fishkind. In addition to these witnesses' testimony, the following exhibits were offered and received into evidence: Petitioners' Exhibits 1 through 13, 19, 31, 42, 46, 50 (except
pages R48 through 582) through 53, 60 through 63, 80, 81, 86
through 89, 93, 96, 100, 101, 104, 109, and 111 through 113; and
Respondent's Exhibits 2, 29, 38, 41, 44, 45, 64 through 76, and
78 through 85. These exhibits included the depositions of the following individuals: Howard Mosher, William Stoeckel, Robert Goodheart, and Linda L. Raymond.
The deadline for the filing of proposed final orders was initially set at 60 days from the date of the filing of the complete transcript of the final hearing.
The complete Transcript of the final hearing (consisting of
20 volumes) was filed with DOAH on December 31, 2008.
At the request of Vista, the proposed recommended order filing deadline was extended until March 16, 2009. On that date, the parties filed their Proposed Recommended Orders.
FINDINGS OF FACT
Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement the factual stipulations set forth in the parties' Pre-hearing Stipulation:
BMW NA is a Florida-licensed importer and distributor of BMW passenger cars and BMW light trucks (hereinafter referred to collectively as "BMW Vehicles"), as well as MINI passenger cars (MINIs).
BMW passenger cars, BMW light trucks, and MINIs constitute three separate line-makes.
In 2007, BMW Vehicles competed in the following luxury passenger and light truck segments: entry compact (against Acura, Audi, Saab, and Volvo models); compact wagon (against Audi, Jaguar, Saab, and Volvo models); compact sedan (against Acura, Audi, Infiniti, Jaguar, Lexus, Mercedes, Saab, and Volvo models); compact coupe (against Infiniti and Mercedes models); compact performance (against Audi models); compact convertible (against Audi, Mercedes, Saab, and Volvo models); midsize sedan (against Acura, Audi, Infiniti, Jaguar, Lexus, Mercedes, Saab, and Volvo models); midsize super performance (against Audi, Jaguar, and Mercedes models); midsize performance (against Audi, Infiniti, Jaguar, Lexus, Mercedes, and Volvo models); midsize wagon (against Audi, Mercedes, Saab, and Volvo models);
specialty roadster/coupe (against Audi, Mercedes, and Porsche models); prestige sedan (against Audi, Jaguar, Lexus, and Mercedes models); prestige convertible coupe (against Jaguar, Lexus, and Mercedes models); super convertible/coupe (against Audi, Mercedes, and Porsche models); and prestige SUV (against Acura, Cadillac, Infiniti, Land Rover, Lexus, Mercedes, Porsche, Saab, Volkswagen, and Volvo models).
In 2007, the MINI Cooper competed against Smart and Volkswagen models; the MINI Cooper S competed against Chevrolet, Honda, Mitsubishi, Scion, Subaru, Volkswagen and Volvo models; the MINI Cooper convertible competed against Chrysler, Pontiac, Saturn, Smart, and Volkswagen models; and the Cooper Convertible S competed against Mazda, Pontiac, Saturn, and Volkswagen models.
BMW NA distributes vehicles in the United States and Puerto Rico through a network of franchised dealers.
Its dealers not only sell new vehicles, they service them as well. BMW NA's free maintenance program brings customers back to the dealership for service on a regular basis.
BMW NA maintains a policy of limiting the supply of vehicles available to its dealers in order to maintain pricing power.
Allocation of product to each dealer is based, in part, on the Sales Planning Guide (SPG) BMW NA assigns the dealer.
The higher the SPG, the greater the supply of product the dealer will be able to receive.
Each dealer is assigned a "Primary Market Area" (PMA) for which it is responsible pursuant to the terms of its franchise agreement with BMW NA. The dealer's PMA is the geographic "area [comprised of aggregated zip codes] designated by BMW NA in which [the] [d]ealer is expected to focus its activities under [its] [d]ealer [a]greement [with BMW NA]. Evaluation of [the] [d]ealer's performance [under its agreement is] primarily based upon [the] [d]ealer's activities in its [PMA]." Another factor, among others, that BMW NA considers in evaluating its dealers is the "feedback from [the] [d]ealers' customers measured by the results of customer satisfaction surveys provided to [the] dealer by BMW NA." From these survey results, a Customer Satisfaction Index (CSI) is constructed in various categories for each dealer.
Some dealers have more than one dealership location in the PMA for which they are responsible. These dealers exercise their discretion to determine how the product they receive from BMW NA (for their PMAs) should be divided.
In 2007, in the United States and Puerto Rico, there were approximately 340 PMAs represented by BMW Vehicle dealers and 83 PMAs represented by MINI dealers.
The BMW Vehicle PMAs, collectively, cover virtually the entire United States and Puerto Rico.
Contrastingly, there are significant land areas in the United States and Puerto Rico that are not included in the 83 MINI PMAs. These are referred to as "unrepresented" areas.
Florida has 21 BMW Vehicle PMAs (in which there are 26 dealership locations) and 8 MINI PMAs (half of which are in two counties, Broward and Miami-Dade).
Holman and Vista are each Florida BMW Vehicle and MINI dealers with operations in Broward County. There are no other BMW Vehicle or MINI dealers located in Broward County.
Holman's BMW Vehicle PMA covers the southern portion of Broward County and extends just over the border (to the south) into northeastern Miami-Dade County. Vista's BMW Vehicle PMA covers the northern portion of Broward County and extends just over the border (to the north) into southern Palm Beach County. The two PMAs cover Broward County in its entirety.
Holman's MINI PMA covers the southeastern portion of Broward County and extends just over the border into northeastern Miami-Dade County. Vista's MINI PMA covers the northern portion of Broward County and extends just over the border into southern Palm Beach County. The southwestern portion of Broward County is unrepresented by any dealer.
There are two BMW Vehicle dealers and two MINI dealers located south of Broward County in Miami-Dade County. Braman Miami operates a BMW Vehicle dealership (Braman Miami BMW) and a MINI dealership (Braman Miami MINI) from a location on Biscayne Boulevard (U.S. Route 1/Federal Highway) in the area of downtown Miami. (At this location, Braman Miami is building a "five- story parking deck with service on two floors," which will "significant[ly] expan[d]" its service capability.) To the south, there is another BMW Vehicle dealership and another MINI dealership, both run by South Motors3 (South Motors BMW and South Motors MINI, respectively). These are the only BMW Vehicle and MINI dealership locations in Miami-Dade County.
Braman Miami's BMW Vehicle PMA and its MINI PMA cover most of northern Miami-Dade County. South Motors' BMW Vehicle PMA covers the southern portion of Miami-Dade County and all of Monroe County (which has no BMW Vehicle dealerships). South Motors' MINI PMA covers the remaining represented portions of Miami-Dade County (that is, those represented areas not represented by Holman's MINI PMA or Braman Miami's MINI PMA). (Monroe County has no MINI representation.)
In Palm Beach County, immediately to the north of Broward County, there is one BMW Vehicle dealership location and one MINI dealership location. Both dealerships (Braman West
Palm Beach BMW and Braman West Palm Beach MINI) are run by the Braman organization.
Compared to Miami-Dade County and Palm Beach County, Broward County has two and four times, respectively, as many BMW Vehicle dealership locations. It has the same number of MINI dealership locations as Miami-Dade County and twice as many as Palm Beach County.
Holman has two BMW Vehicle dealership locations in Broward County, a "primary" location in the downtown Fort Lauderdale area (Holman BMW Fort Lauderdale) and a "satellite" location in Pembroke Pines (Holman BMW Pembroke Pines).
Holman BMW Fort Lauderdale's sales facility is located at 1400 South Federal Highway, 21.5 miles (by air) north of Braman Miami BMW (22.3 miles, if driving). This location puts it on a well traveled north-south pathway to downtown Fort Lauderdale.
Holman BMW Fort Lauderdale's sales facility is staffed by 16 new BMW Vehicle sales consultants, the maximum amount the facility can accommodate. Saturdays are particularly busy days at the facility. To decrease the amount of time customers have to wait to be helped, Holman has "ma[d]e it mandatory for every sales consultant to work every Saturday," a move that was not well received by the sales consultants, but one that Holman believed "from a business perspective [it had to make] so that
[it] had enough people on hand to handle the volume of customers that were coming through the door."
The sales facility's air-conditioned showroom has enough space to display no more than seven BMW Vehicles, less than what is necessary to "have a representative sample of every [vehicle] that [Holman] sell[s]." Customers must go outside and deal with the sometimes uncomfortable south Florida weather to view other display vehicles.
Customer parking at the sales facility is limited.
Holman BMW Fort Lauderdale's service facility is located at 1812 South Andrews Avenue, several blocks away from its sales facility. Holman BMW Fort Lauderdale has had these separate sales and service locations since the 1980s. Having sales and service facilities at different locations makes it more difficult for the sales staff to take advantage of the marketing opportunities that exist when customers come in to have their vehicles serviced, but this has not prevented Holman BMW Fort Lauderdale from being a successful and profitable dealership. (In 2007, for example, Holman BMW Fort Lauderdale's business operations generated a net profit of $15 million for Holman.)
Holman BMW Pembroke Pines' sales and service facilities are located at 14800 Sheridan Street in Pembroke Pines, 18.8 miles (by air) north of Braman Miami BMW (23.5
miles, if driving) and 14 miles (by air) from Holman BMW Fort Lauderdale's sales facility (18.3 miles, if driving). These facilities occupy 11 acres of a 17.5 acre parcel. The remainder of the parcel is occupied by a Lincoln-Mercury dealership owned by Holman.
Holman BMW Pembroke Pines' service facility has 45 service stalls.
Holman has a single MINI dealership location in Broward County (Holman MINI).
Holman MINI's sales facility is located at 1440 South Federal Highway in Fort Lauderdale. It sits on the same 1.5 acre parcel that Holman BMW Fort Lauderdale's sales facility and pre-owned vehicle operation also occupy (Holman Fort Lauderdale Parcel).
There is room on the Holman Fort Lauderdale Parcel for
40 new BMW Vehicles and MINIs. Holman BMW Fort Lauderdale and Holman MINI typically have a combined new vehicle inventory of
225 vehicles. Those new vehicles for which there is no room on the Holman Fort Lauderdale Parcel are stored off-site at a location about three miles away, near where Holman operates a Honda dealership.
Also located off-site, at 1777 South Andrews Avenue in Fort Lauderdale, is Holman's in-house accounting department. Sales consultants "need[ing] to pull a deal file to get
information [about] a previous customer" or needing other documents held by the accounting department are not able to retrieve them as quickly and reliably as they would if the accounting department were housed on-site.
The customer parking at Holman MINI's sales facility is even more limited than it is at Holman BMW Fort Lauderdale's sales facility (where most MINI customers wind up having to park).
There is room to display no more than three vehicles in Holman MINI's showroom. The display area is located right next to where the sales consultants sit down and talk to customers, resulting in the possibility that conversations concerning personal financial information and other private matters may be overheard by those looking at vehicles in the display area.
Holman MINI shares the service facility used by Holman BMW Fort Lauderdale (Holman Fort Lauderdale Service Facility).
The Holman Fort Lauderdale Service Facility has a small, four-lane combined service drive for BMW Vehicles and MINIs, which often gets "back[ed] up" in the morning when customers drop off their vehicles, as well as at the end of the day when vehicles are picked up.
The facility has 37 service stalls for the BMW Vehicles and MINIs that are brought in to be serviced.
In the interest of "[c]ustomer convenience," Holman has given Enterprise Rent-A-Car space in the facility to conduct rental car operations.
There is a parts department located at the facility, but the space it occupies is not "big enough to store all the parts" it needs to be fully operational. As a result, parts are also kept in a "remote warehouse" located where the new vehicle inventory is stored (near the Holman Honda dealership), as well as at a body shop that Holman operates in Hollywood, Florida, near the corner of U.S. Route 1/Federal Highway and Sheridan Street.
There are a total of 150 spaces available for parking vehicles at or around the Holman Fort Lauderdale Service Facility, 79 of which are across the street from the facility (on the west side of Andrews Avenue) and are used for employee parking and to "stage the [vehicles] waiting to be [serviced]." These 79 spaces are leased on a month-to-month basis. Under the terms of the lease, no overnight parking is allowed, so any vehicles in these spaces must be moved to the service facility before closing time.
As a general rule, customers can get same day appointments to have their vehicles serviced at the Holman Fort Lauderdale Service Facility. There are "always . . . enough slots to handle emergencies," but "from time to time," during
busy periods, it may take as long as two weeks to get an appointment for a regularly scheduled maintenance visit.
Vista, like Holman, has two BMW Vehicle dealership locations in Broward County, a "primary" location in Coconut Creek (Vista BMW Coconut Creek) and a "satellite" location in the downtown Pompano Beach area (Vista BMW Pompano Beach). (Although they each have two BMW Vehicle dealership locations in Broward County, Vista and Holman are assigned only one PMA each.)
Vista BMW Coconut Creek's sales and service facilities are located at 4401 Sample Road in Coconut Creek, which is 33 miles (by air) from Braman Miami BMW (34.7 miles, if driving);
12.1 miles (by air) from Holman BMW Fort Lauderdale's sales facility (14.5 miles, if driving); and 19.7 miles (by air) from Holman BMW Pembroke Pines (25.8 miles, if driving).
Vista BMW Pompano Beach's sales and services facilities are located at 744 North Federal Highway in Pompano Beach, which is 31 miles (by air) from Braman Miami BMW (32.8 miles, if driving); 9.5 miles (by air) from Holman BMW Fort Lauderdale's sales facility (10.5 miles, if driving); 21 miles (by air) from Holman BMW Pembroke Pines (26.8 miles, if driving); and 5.6 miles (by air) from Vista BMW Coconut Creek (8 miles, if driving).
The service facility at this location has 34 service stalls.
Vista has a single MINI dealership location in Broward County (Vista MINI).
Vista MINI and Holman MINI are currently the two closest MINI dealerships in the State of Florida.
Vista MINI's sales and service facilities are located at 4401 Sample Road in Coconut Creek (on the same campus as Vista BMW Coconut Creek).
Vista has a total of 51 service stalls on its Coconut Creek campus.
Prior to 2002, in Broward County, there were only two BMW Vehicle dealership locations and no MINI dealership locations. The two BMW Vehicle dealership locations were both east of I-95. One was Holman BMW Forth Lauderdale. The other was a Vista dealership operation at 700 North Federal Highway in Pompano Beach.
Holman MINI and Vista MINI were opened in March 2002 and October 2003, respectively.
Holman's decision to house its MINI operations at its existing BMW Vehicle facility in the downtown Fort Lauderdale area resulted in a reduction in the amount of space it had available there for BMW sales and service operations.
BMW NA prefers (but does not require) that its MINI dealerships with sales volumes similar to that of Holman MINI be located in exclusive facilities and not co-located with BMW operations.
In October 2003, Vista also moved its BMW Vehicle dealership (which at the time had only one location) from 700 North Federal Highway in Pompano Beach to newly-constructed facilities at 4401 Sample Road in Coconut Creek (the present site of Vista BMW Coconut Creek).
Vista spent $21 million to build the Coconut Creek campus that houses its BMW Vehicle and MINI dealerships.
In December 2003, a third BMW Vehicle dealership location, Holman BMW Pembroke Pines, was opened in Broward County.
In November 2004, the Department entered a Final Order authorizing Vista to establish an additional dealership location at 744 North Federal Highway in Pompano Beach, which was "next door" to, and just north of, the site it had vacated when it had moved its BMW Vehicle dealership to Coconut Creek in October 2003.
An "old Daewoo facility" had been located at 744 Federal Highway. Vista purchased and subsequently renovated the site, at a cost of $5.5 million.
In April 2006, Vista opened Vista BMW Pompano Beach (the authorized additional dealership location), bringing to four the total number of BMW dealership locations in Broward County, two east of I-95 (Holman BMW Fort Lauderdale and Vista BMW Pompano Beach) housed in smaller, older facilities typical of urban dealerships and two in the faster-growing area west of I-95 (Holman BMW Pembroke Pines and Vista BMW Coconut Creek) housed in large, modern, state-of-the-art facilities.
Although it opened the Pompano Beach dealership location, Vista still had "additional plans for expansion and renovation" for which it needed local governmental approval. Vista has only recently obtained this approval, and it has not yet begun this planned expansion and renovation project.
Since returning to the Pompano Beach area in April 2006, after a two-and-a-half-year absence, Vista has attempted to build back up its business in that part of the county. These efforts, which are ongoing, have included making substantial expenditures for advertising.
In reconfiguring and expanding the BMW Vehicle dealer network in Broward County to make its products and services more conveniently accessible to customers in the area, and in adding MINI representation in the county, BMW NA worked with its existing dealers, Vista and Holman, in an effort to allow them to grow with the market.
Calendar year 2007 was the first complete calendar year that Broward County had as many BMW Vehicle dealership locations as it presently has.4 It was also the most recent period for which a full, calendar year's worth of sales data was available at the time of the final hearing.
In 2007, there were 3,664 new BMW passenger cars registered in Holman's BMW Vehicle PMA, 2,126 of them sold by Holman, 801 of them sold by Vista, 356 of them sold by Braman Miami, 108 of them sold by South Motors, and 89 of them sold by Braman West Palm Beach.
In 2007, there were 3,388 new BMW passenger cars registered in Vista's BMW Vehicle PMA, 2,101 of them sold by Vista, 563 of them sold by Braman West Palm Beach, 402 of them sold by Holman, 61 of them sold by Braman Miami, and 24 of them sold by South Motors.
In 2007, there were 4,008 new BMW passenger cars registered in Braman Miami's BMW Vehicle PMA, 1,792 of them sold by Braman Miami BMW, 939 of them sold by South Motors, 595 of them sold by Holman, 382 of them sold by Vista, and 70 of them sold by Braman West Palm Beach.
In 2007, there were 2,587 new BMW passenger cars registered in South Motors' BMW Vehicle PMA, 1,548 of them sold by South Motors, 636 of them sold by Braman Miami, 144 of them
sold by Holman, 111 of them sold by Vista, and 36 of them sold by Braman West Palm Beach.
In 2007, there were 2,048 new BMW passenger cars registered in Braman West Palm Beach's BMW Vehicle PMA, 1,457 of them sold by Braman West Palm Beach, 261 of them sold by Vista,
49 of them sold by Holman, 23 of them sold by Braman Miami, and
13 of them sold by South Motors.
In 2007, Holman sold a total of 3,392 new Florida- registered BMW passenger cars. Of this number, 62.68% were registered in its BMW Vehicle PMA; 17.54% were registered in Braman Miami's BMW Vehicle PMA; 11.85% were registered in Vista's BMW Vehicle PMA; 4.25% were registered in South Motors' BMW Vehicle PMA; and 1.44% were registered in Braman West Palm Beach's BMW Vehicle PMA.
In 2007, of the consumers in Holman's BMW Vehicle PMA purchasing new BMW passenger cars, 58.02% did so from Holman; 21.86% did so from Vista; 9.80% did so from Braman Miami; 2.95% did so from South Motors; and 2.43% did so from Braman West Palm Beach.
In 2007, Vista sold a total of 3,726 new Florida- registered BMW passenger cars.5 Of this number, 56.39% were registered in its BMW Vehicle PMA; 21.50% were registered in Holman's BMW Vehicle PMA; 10.25% were registered in Braman Miami's BMW Vehicle PMA; 7% were registered in Braman West Palm
Beach's BMW Vehicle PMA; and 2.98% were registered in South Motors' BMW Vehicle PMA.
In 2007, of the consumers in Vista's BMW Vehicle PMA purchasing new BMW passenger cars, 62.01% did so from Vista; 16.62% did so from Braman West Palm Beach; 11.87% did so from Holman; 1.80% did so from Braman Miami; and 0.71% did so from South Motors.
In 2007, Braman Miami sold a total of 2,917 new Florida-registered BMW passenger cars. Of this number, 61.43% were registered in its BMW Vehicle PMA; 21.80% were registered in South Motors' BMW Vehicle PMA; 12.31% were registered in Holman's BMW Vehicle PMA; 2.09% were registered in Vista's BMW Vehicle PMA; and 0.79% were registered in Braman West Palm Beach's BMW Vehicle PMA.
In 2007, of the consumers in Braman Miami's BMW Vehicle PMA purchasing new BMW passenger cars, 44.71% did so from Braman Miami; 23.43% did so from South Motors; 14.85% did so from Holman; 9.53% did so from Vista; and 1.75% did so from Braman West Palm Beach.
In 2007, South Motors sold a total of 2,681 new Florida-registered BMW passenger cars. Of this number, 57.74% were registered in its BMW Vehicle PMA; 35.02% were registered in Braman Miami's BMW Vehicle PMA; 4.03% were registered in Holman's BMW Vehicle PMA; 0.90% were registered in Vista's BMW
Vehicle PMA; and 0.48% were registered in Braman West Palm Beach's BMW Vehicle PMA.
In 2007, of the consumers in South Motors' BMW Vehicle PMA purchasing new BMW passenger cars, 59.84% did so from South Motors; 24.58% did so from Braman Miami; 5.57% did so from Holman; 4.29% did so from Vista; and 1.39% did so from Braman West Palm Beach.
In 2007, Braman West Palm Beach sold a total of 2,389 new Florida-registered BMW passenger cars. Of this number, 60.99% were registered in its BMW Vehicle PMA; 23.57% were registered in Vista's BMW Vehicle PMA; 3.73% were registered in Holman's BMW Vehicle PMA; 2.93% were registered in Braman Miami's BMW Vehicle PMA; and 1.51% were registered in South Motors' BMW Vehicle PMA.
In 2007, of the consumers in Braman West Palm Beach's BMW Vehicle PMA purchasing new BMW passenger cars, 71.14% did so from Braman West Palm Beach; 12.74% did so from Vista; 2.39% did so from Holman; 1.12% did so from Braman Miami; and 0.63% did so from South Motors.
In 2007, in terms of total sales of new BMW passenger cars, Vista, Holman, Braman Miami, South Motors, and Braman West Palm Beach were the number one, two, three, six, and eight dealers, respectively, in the United States. (In 2006, Vista was number one, Holman was number two, Braman West Palm Beach
was number four, Braman Miami was number five, and South Motors was number seven. In 2008, as of October 9, 2008, Vista was number one, Holman was number two, Braman Miami was number three, South Motors was number six, and Braman West Palm Beach was number nine.)
In 2007, there were 848 new BMW light trucks registered in Holman's BMW Vehicle PMA, 494 of them sold by Holman, 202 of them sold by Vista, 70 of them sold by Braman Miami, 21 of them sold by South Motors, and 20 of them sold by Braman West Palm Beach.
In 2007, there were 672 new BMW light trucks registered in Vista's BMW Vehicle PMA, 430 of them sold by Vista, 95 of them sold by Braman West Palm Beach, 78 of them sold by Holman, 17 of them sold by Braman Miami, and 4 of them sold by South Motors.
In 2007, there were 1,103 new BMW light trucks registered in Braman Miami's BMW Vehicle PMA, 510 of them sold by Braman Miami, 256 of them sold by South Motors, 147 of them sold by Holman, 86 of them sold by Vista, and 18 of them sold by Braman West Palm Beach.
In 2007, there were 567 new BMW light trucks registered in South Motors' BMW Vehicle PMA, 363 of them sold by South Motors, 96 of them sold by Braman Miami, 37 of them sold
by Vista, 34 of them sold by Holman, and 10 of them sold by Braman West Palm Beach.
In 2007, there were 445 new BMW light trucks registered in Braman West Palm Beach's BMW Vehicle PMA, 342 of them sold by Braman West Palm Beach, 50 of them sold by Vista, 6 of them sold by Holman, 4 of them sold by Braman Miami, and 1 of them sold by South Motors.
In 2007, Holman sold a total of 772 new Florida- registered BMW light trucks. Of this number, 63.99% were registered in its BMW Vehicle PMA; 19.04% were registered in Braman Miami's BMW Vehicle PMA; 10.10% were registered in Vista's BMW Vehicle PMA; 4.40% were registered in South Motors' BMW Vehicle PMA; and 0.78% were registered in Braman West Palm Beach's BMW Vehicle PMA.
In 2007, of the consumers in Holman's BMW Vehicle PMA purchasing new BMW light trucks, 58.25% did so from Holman; 23.82% did so from Vista; 8.25% did so from Braman Miami; 2.48% did so from South Motors; and 2.36% did so from Braman West Palm Beach.
In 2007, Vista sold a total of 824 new Florida- registered BMW light trucks. Of this number, 52.18% were registered in its BMW Vehicle PMA; 24.51% were registered in Holman's BMW Vehicle PMA; 10.44% were registered in Braman Miami's BMW Vehicle PMA; 6.07% were registered in Braman West
Palm Beach's BMW Vehicle PMA; and 4.49% were registered in South Motors' BMW Vehicle PMA.
In 2007, of the consumers in Vista's BMW Vehicle PMA purchasing new BMW light trucks, 63.99% did so from Vista; 14.14% did so from Braman West Palm Beach; 11.61% did so from Holman; 2.53% did so from Braman Miami; and 0.60% did so from South Motors.
In 2007, Braman Miami sold a total of 706 new Florida- registered BMW light trucks. Of this number, 72.24% were registered in its BMW Vehicle PMA; 13.60% were registered in South Motors' BMW Vehicle PMA; 9.92% were registered in Holman's BMW Vehicle PMA; 2.41% were registered in Vista's BMW Vehicle PMA; and 0.57% were registered in Braman West Palm Beach's BMW Vehicle PMA.
In 2007, of the consumers in Braman Miami's BMW Vehicle PMA purchasing new BMW light trucks, 46.24% did so from Braman Miami; 23.21% did so from South Motors; 13.33% did so from Holman; 7.80% did so from Vista; and 1.63% did so from Braman West Palm Beach.
In 2007, South Motors sold a total of 648 new Florida- registered BMW light trucks. Of this number, 56.02% were registered in its BMW Vehicle PMA; 39.51% were registered in Braman Miami's BMW Vehicle PMA; 3.24% were registered in Holman's BMW Vehicle PMA; 0.62% were registered in Vista's BMW
Vehicle PMA; and 0.15% were registered in Braman West Palm Beach's BMW Vehicle PMA.
In 2007, of the consumers in South Motors' BMW Vehicle PMA purchasing new BMW light trucks, 64.02% did so from South Motors; 16.93% did so from Braman Miami; 6.53% did so from Vista; 6.00% did so from Holman; and 1.76% did so from Braman West Palm Beach.
In 2007, Braman West Palm Beach sold a total of 516 new Florida-registered BMW light trucks. Of this number, 66.28% were registered in its BMW Vehicle PMA; 18.41% were registered in Vista's BMW Vehicle PMA; 3.86% were registered in Holman's BMW Vehicle PMA; 3.49% were registered in Braman Miami's BMW Vehicle PMA; and 1.94% were registered in South Motors' BMW Vehicle PMA.
In 2007, of the consumers in Braman West Palm Beach's BMW Vehicle PMA purchasing new BMW light trucks, 76.85% did so from Braman West Palm Beach; 11.24% did so from Vista; 1.35% did so from Holman; 0.90% did so from Braman Miami; and 0.22% did so from South Motors.
In 2007, in terms of total sales of new BMW light trucks, Vista, Braman Miami, Holman, and South Motors, were the number one, three, four, and five dealers, respectively, in the United States, with Braman West Palm Beach not making the top ten. (In 2006, Holman was number one, Vista was number two,
South Motors was number three, and Braman Miami was number four, with Braman West Palm Beach again not making the top ten. In 2008, as of October 9, 2008, Vista was number one, Holman was number two, Braman Miami was number three, South Motors was number six, and Braman West Palm Beach was number nine.)
Broward County is also home to the number one (in total sales volume) Lexus, Infiniti, Porsche, and Volkswagen dealership locations in the United States.
In 2007, there were 346 new MINIs registered in Holman's MINI PMA, 182 of them sold by Holman, 67 of them sold by Braman Miami, 66 of them sold by Vista, 11 of them sold by South Motors, and 8 of them sold by Braman West Palm Beach.
In 2007, there were 309 new MINIs registered in Vista's MINI PMA, 197 of them sold by Vista, 45 of them sold by Holman, 43 of them sold by Braman West Palm Beach, 10 of them sold by Braman Miami, and 3 of them sold by South Motors.
In 2007, there were 804 new MINIs registered in Braman Miami's MINI PMA, 523 of them sold by Braman Miami, 180 of them sold by South Motors, 55 of them sold by Holman, 27 of them sold by Vista, and 6 of them sold by Braman West Palm Beach.
In 2007, there were 370 new MINIs registered in South Motors' MINI PMA, 231 of them sold by South Motors, 99 of them
sold by Braman Miami, 19 of them sold by Holman, 16 of them sold by Vista, and 3 of them sold by Braman West Palm Beach.
In 2007, there were 247 new MINIs registered in Braman West Palm Beach's MINI PMA, 179 of them sold by Braman West Palm Beach, 40 of them sold by Vista, 11 of them sold by Holman, and 7 of them sold by Braman Miami. South Motors sold none of these new MINIs.
In 2007, Holman sold a total of 457 new Florida- registered MINIs.6 Of this number, 39.82% were registered in its MINI PMA; 12.04% were registered in Braman Miami's MINI PMA; 9.85% were registered in Vista's MINI PMA; 4.16% were registered in South Motors' MINI PMA; and 2.41% were registered in Braman West Palm Beach's MINI PMA.
In 2007, of the consumers in Holman's MINI PMA purchasing new MINIs, 52.60% did so from Holman; 19.36% did so from Braman Miami; 19.08% did so from Vista; 3.18% did so from South Motors; and 2.31% did so from Braman West Palm Beach.
In 2007, Vista sold a total of 419 new Florida- registered MINIs. Of this number, 47.02% were registered in its MINI PMA; 15.75% were registered in Holman's MINI PMA; 9.55% were registered in Braman West Palm Beach's MINI PMA; 6.44% were registered in Braman Miami's MINI PMA; and 3.82% were registered in South Motors' MINI PMA..
In 2007, of the consumers in Vista's MINI PMA purchasing new MINIs, 63.75% did so from Vista; 14.56% did so from Holman; 13.92% did so from Braman West Palm Beach; 3.24% did so from Braman Miami; and 0.97% did so from South Motors.
In 2007, Braman Miami sold a total of 789 new Florida-registered MINIs. Of this number, 66.29% were registered in its MINI PMA; 12.55% were registered in South Motors' MINI PMA; 8.49% were registered in Holman's MINI PMA; 1.27% were registered in Vista's MINI PMA; and 0.89% were registered in Braman West Palm Beach's MINI PMA.
In 2007, of the consumers in Braman Miami's MINI PMA purchasing new MINIs, 65.05% did so from Braman Miami; 22.39% did so from South Motors; 6.84% did so from Holman; 3.36% did so from Vista; and 0.75% did so from Braman West Palm Beach.
In 2007, South Motors sold a total of 467 new Florida-registered MINIs. Of this number, 49.46% were registered in its MINI PMA; 38.54% were registered in Braman Miami's MINI PMA; 2.36% were registered in Holman's MINI PMA; and 0.64% were registered in Vista's MINI PMA. There were no registrations in Braman West Palm Beach's MINI PMA.
In 2007, of the consumers in South Motors' MINI PMA purchasing new MINIs, 62.43% did so from South Motors; 26.76% did so from Braman Miami; 5.14% did so from Holman; 4.32% did so from Vista; and 0.81% did so from Braman West Palm Beach.
In 2007, Braman West Palm Beach sold a total of 357 new Florida-registered MINIs. Of this number, 50.14% were registered in its MINI PMA; 12.04% were registered in Vista's MINI PMA; 2.24% were registered in Holman's MINI PMA; 1.68% were registered in Braman Miami's MINI PMA; and 0.84% were registered in South Motors' MINI PMA..
In 2007, of the consumers in Braman West Palm Beach's MINI PMA purchasing new MINIs, 72.47% did so from Braman West Palm Beach; 16.19% did so from Vista; 4.45% did so from Holman; and 2.83% did so from Braman Miami. No purchases were made from South Motors.
For purposes of the instant consolidated cases, and solely for the purposes of these cases, BMW NA, through its expert witness, James Anderson, created, as alternatives to the PMAs that BMW NA is contractually obligated to use in its dealings with its dealers, what Mr. Anderson termed, "Areas of Geographic Advantage" (AGAs). An AGA, as described by
Mr. Anderson, is a geographic area in which each dealer or dealership location (in those PMAs having more than one dealership location) has a competitive advantage over other dealers or locations of the same line-make due solely to its geographic proximity to customers. Mr. Anderson created AGAs for Holman BMW Fort Lauderdale, Holman BMW Pembroke Pines, Vista BMW Coconut Creek, Vista BMW Pompano Beach, Braman Miami BMW,
South Motors BMW, Holman MINI, Vista MINI, Braman Miami MINI, and South Motors MINI. The Holman BMW Fort Lauderdale AGA consists of southeastern Broward County. The Holman BMW Pembroke Pines AGA consists of southwestern Broward County and extends just over the border into northwestern Miami-Dade County. The Vista BMW Coconut Creek AGA consists of northwestern Broward County and extends just over the border into southwestern Palm Beach County. The Vista BMW Pompano Beach AGA consists of northeastern Broward County and extends just over the border into southeastern Palm Beach County. The Vista MINI AGA is very similar to its PMA. The Holman MINI AGA is larger than its PMA, covering almost all of southern Broward County.
In 2007, there were 1,326 new BMW passenger cars registered in Holman BMW Fort Lauderdale's AGA, 507 of them sold at Holman BMW Fort Lauderdale, 255 of them sold at Vista BMW Coconut Creek, 181 of them sold at Holman BMW Pembroke Pines, and 141 of them sold at Vista BMW Pompano Beach.
In 2007, there were 2,335 new BMW passenger cars registered in Holman BMW Pembroke Pines' AGA, 1,203 of them sold at Holman BMW Pembroke Pines, 312 of them sold at Vista BMW Coconut Creek, 219 of them sold at Holman BMW Fort Lauderdale, and 60 of them sold at Vista BMW Pompano Beach.
In 2007, there were 2,297 new BMW passenger cars
registered in Vista BMW Coconut Creek's AGA, 1,266 of them sold at Vista BMW Coconut Creek, 174 of them sold at Vista BMW Pompano Beach, 146 of them sold at Holman BMW Fort Lauderdale, and 122 of them sold at Holman BMW Pembroke Pines.
In 2007, there were 996 new BMW new passenger cars registered in Vista BMW Pompano Beach's AGA, 399 of them sold at Vista BMW Coconut Creek, 222 of them sold at Vista BMW Pompano Beach, 101 of them sold at Holman BMW Fort Lauderdale, and 22 of them sold at Holman BMW Pembroke Pines.
In 2007, there were a total of 1,431 new BMW passenger cars sold at Holman BMW Fort Lauderdale. Of this number, 35.43% were registered in its AGA; 15.30% were registered in Holman BMW Pembroke Pines' AGA; 10.20% were registered in Vista BMW Coconut Creek's AGA; and 7.06% were registered in Vista BMW Pompano Beach's AGA.
In 2007, of the consumers in Holman BMW Fort Lauderdale's AGA purchasing new BMW passenger cars, 38.24% did so from Holman BMW Fort Lauderdale; 19.23% did so from Vista BMW Coconut Creek; 13.65% did so from Holman BMW Pembroke Pines; and 10.63% did so from Vista BMW Pompano Beach.
In 2007, there were a total of 1,961 new BMW passenger cars sold at Holman BMW Pembroke Pines. Of this number, 61.35% were registered in its AGA; 9.23% were registered in Holman BMW Fort Lauderdale's AGA; 6.22% were registered in
Vista BMW Coconut Creek's AGA; and 1.12% were registered in Vista BMW Pompano Beach's AGA.
In 2007, of the consumers in Holman BMW Pembroke Pines' AGA purchasing new BMW passenger cars, 51.52% did so from Holman BMW Pembroke Pines; 13.36% did so from Vista BMW Coconut Creek; 9.38% did so from Holman BMW Fort Lauderdale; and 2.57% did so from Vista BMW Pompano Beach.
In 2007, there were a total of 2,865 new BMW passenger cars sold at Vista BMW Coconut Creek. Of this number, 44.19% were registered in its AGA; 13.93% were registered in Vista BMW Pompano Beach's AGA; 10.89% were registered in Holman BMW Pembroke Pines' AGA; and 8.90% were registered in Holman BMW Fort Lauderdale's AGA.
In 2007, of the consumers in Vista BMW Coconut Creek's AGA purchasing new BMW passenger cars, 55.12% did so from Vista BMW Coconut Creek; 7.58% did so from Vista BMW Pompano Beach; 6.36% did so from Holman BMW Fort Lauderdale; and 5.31% did so from Holman BMW Pembroke Pines.
In 2007, there were a total of 861 new BMW passenger cars sold at Vista BMW Pompano Beach. Of this number, 25.78% were registered in its AGA; 20.21% were registered in Vista BMW Coconut Creek's AGA; 16.38% were registered in Holman BMW Fort Lauderdale's AGA; and 6.97% were registered in Holman BMW Pembroke Pines' AGA.
In 2007, of the consumers in Vista BMW Pompano Beach's AGA purchasing new BMW passenger cars, 40.06% did so from Vista BMW Coconut Creek; 22.29% did so from Vista BMW Pompano Beach; 10.14% did so from Holman BMW Fort Lauderdale; and 2.21% did so from Holman BMW Pembroke Pines.
In 2007, there were 291 new BMW light trucks registered in Holman BMW Fort Lauderdale's AGA, 106 of them sold at Holman BMW Fort Lauderdale, 62 of them sold at Vista BMW Coconut Creek, 42 of them sold at Holman BMW Pembroke Pines, and
25 of them sold at Vista BMW Pompano Beach.
In 2007, there were 540 new BMW light trucks registered in Holman BMW Pembroke Pines' AGA, 288 of them sold at Holman BMW Pembroke Pines, 77 of them sold at Vista BMW Coconut Creek, 50 of them sold at Holman BMW Fort Lauderdale, and 15 of them sold at Vista BMW Pompano Beach.
In 2007, there were 470 new BMW light trucks registered in Vista BMW Coconut Creek's AGA, 291 of them sold at Vista BMW Coconut Creek, 31 of them sold at Holman BMW Fort Lauderdale, 27 of them sold at Vista BMW Pompano Beach, and 19 of them sold at Holman BMW Pembroke Pines.
In 2007, there were 185 new BMW light trucks registered in Vista BMW Pompano Beach's AGA, 80 of them sold at Vista BMW Coconut Creek, 29 of them sold at Vista BMW Pompano
Beach, 26 of them sold at Holman BMW Fort Lauderdale, and 4 of them sold at Holman BMW Pembroke Pines.
In 2007, there were a total of 317 new BMW light trucks sold at Holman BMW Fort Lauderdale. Of this number, 33.44% were registered in its AGA; 15.77% were registered in Holman BMW Pembroke Pines' AGA; 9.78% were registered in Vista BMW Coconut Creek's AGA; and 8.20% were registered in Vista BMW Pompano Beach's AGA.
In 2007, of the consumers in Holman BMW Fort Lauderdale's AGA purchasing new BMW light trucks, 36.43% did so from Holman BMW Fort Lauderdale; 21.31% did so from Vista BMW Coconut Creek; 14.43% did so from Holman BMW Pembroke Pines; and 8.59% did so from Vista BMW Pompano Beach.
In 2007, there were a total of 455 new BMW light trucks sold at Holman BMW Pembroke Pines. Of this number, 63.30% were registered in its AGA; 9.23% were registered in Holman BMW Fort Lauderdale's AGA; 4.18% were registered in Vista BMW Coconut Creek's AGA; and 0.88% were registered in Vista BMW Pompano Beach's AGA.
In 2007, of the consumers in Holman BMW Pembroke Pines' AGA purchasing new BMW light trucks, 53.33% did so from Holman BMW Pembroke Pines; 14.26% did so from Vista BMW Coconut Creek; 9.26% did so from Holman BMW Fort Lauderdale; and 2.78% did so from Vista BMW Pompano Beach.
In 2007, there were a total of 678 new BMW light trucks sold at Vista BMW Coconut Creek. Of this number, 42.92% were registered in its AGA; 11.80% were registered in Vista BMW Pompano Beach's AGA; 11.36% were registered in Holman BMW Pembroke Pines' AGA; and 9.14% were registered in Holman BMW Fort Lauderdale's AGA.
In 2007, of the consumers in Vista BMW Coconut Creek's AGA purchasing new BMW light trucks, 61.91% did so from Vista BMW Coconut Creek; 6.60% did so from Holman BMW Fort Lauderdale; 5.74% did so from Vista BMW Pompano Beach; and 4.04% did so from Holman BMW Pembroke Pines.
In 2007, there were a total of 146 new BMW light trucks sold at Vista BMW Pompano Beach. Of this number, 19.86% were registered in its AGA; 18.49% were registered in Vista BMW Coconut Creek's AGA; 17.12% were registered in Holman BMW Fort Lauderdale's AGA; and 10.27% were registered in Holman BMW Pembroke Pines' AGA.
In 2007, of the consumers in Vista BMW Pompano Beach's AGA purchasing new BMW light trucks, 43.24% did so from Vista BMW Coconut Creek; 15.68% did so from Vista BMW Pompano Beach; 14.05% did so from Holman BMW Fort Lauderdale; and 2.16% did so from Holman BMW Pembroke Pines.
Holman's and Vista's inability to obtain vehicles hampered their sales performances in 2007 (as well as in 2005
and 2006). They both could have sold more BMW Vehicles and MINIs during this period had BMW NA supplied them with more product.
Subsequent to 2007, with deteriorating macro-economic conditions and slackening nationwide demand, supply constraints affecting Holman and Vista have dissipated, at least with respect to BMW Vehicles.
The United States economy has "officially" been in recession since February 2008. There has been a "substantial contraction of economic activity since then," with the rate accelerating following the Lehman Brothers bankruptcy on September 15, 2008, which resulted in "great distress [to] the financial markets" and the "worst financial panic this country has seen since the Great Depression." Statewide, there has been the "sharpest fall in housing starts in our state's history," a record number of foreclosures, and "a very strong deceleration in population growth." Broward County has not been spared from the economic slowdown, as reflected by the fact that it has lost population and the growth in the number of those employed in the county has almost come to a halt after 16 years of impressive growth.
These less than favorable market conditions resulted in fewer BMW Vehicles being sold in the United States (and by Holman and Vista) the first nine months of 2008 compared to the
same period in 2007.7 In fact, in 2008, Holman even "gave cars back to BMW [NA]." Responding to these conditions, BMW NA, in or around August 2008, announced production cuts of BMW Vehicles for the United States market of approximately 12%. Production volume for 2009 is anticipated to be about the same as it was for 2008.
There no doubt will be an economic recovery, but there is insufficient record evidence upon which to base a finding as to when this recovery will occur, how strong it will be, and whether it will result in the market demand for BMW Vehicles returning to pre-2008 levels.
Nationally, MINI sales have bucked the industry trend and increased over the first nine months of 2008, compared to the same period the previous year, with "[v]irtually all dealers asking for more MINIs" and the "factory . . . operating very close to capacity" to keep up with demand in the United States. BMW NA is working with its existing MINI dealers in the United States to enable them "to continue to grow," and it is also "selectively adding new dealers in white [unrepresented] spots around the country where the drive to a MINI dealer would be far too far for someone to consider."
Market penetration is a measure of the sales performance of a line-make in a particular geographic area relative to that of competing line-makes. To determine whether
a line-make's market penetration in an area has met reasonable expectations, it is necessary to select a reasonable market penetration standard (adjusted using segmentation analysis) against which that performance can be gauged. Comparing the number of actual registrations in the area to the number of expected registrations based on the selected standard yields a registration effectiveness rating (RER), expressed as a percentage. An RER of 100% or above signifies that reasonable expectations in terms of market penetration have been met or exceeded. An RER of less than 100% means that market penetration has been below reasonable expectations.
The parties differ as to the market penetration standards that should be used in the instant consolidated cases.
With respect BMW passenger cars and light trucks, BMW NA and Holman advocate application of a standard consisting of the average market penetration (as adjusted) of these line-makes in the Braman Miami BMW and South Motors BMW AGAs combined (Miami BMW Standard), while Vista contends that the average market penetration (as adjusted) achieved in Florida as a whole (Florida BMW Standard) should be used.
In 2007, only two of the BMW Vehicle PMAs in Florida (those of Sandy Sansing BMW in Pensacola8 and Braman Miami BMW), and less than ten percent of the BMW Vehicle PMAs in the United
States, had an RER of 100% or above applying the Miami BMW Standard.
The Florida BMW Standard is a lower standard than the Miami BMW Standard; however, the average market penetration of BMW Vehicles has historically been higher in Florida than it has been regionally or nationally.
Applying the Florida BMW Standard, in 2005, 2006, and 2007, in the area covering Holman's BMW Vehicle PMA, Vista's BMW Vehicle PMA, and Braman Miami's BMW Vehicle PMA combined, the RERs for new BMW passenger cars were 108.73%, 106.44%, and 110.64%, respectively, and the RERs for new BMW light trucks were 120.55%, 120.08%, and 120.80%, respectively.
Applying the Florida BMW Standard, in 2005, 2006, and 2007, in the area covering Holman's BMW Vehicle PMA and Vista's BMW Vehicle PMA combined, the RERs for new BMW passenger cars were 104.16%, 103.73%, and 105.58%, respectively, and the RERs for new BMW light trucks were 106.97%, 111.01%, and 111.61%, respectively.
Applying the Miami BMW Standard, in 2005, 2006, 2007, and 2008 (through June), in the area covering Holman's BMW Vehicle PMA and Vista's BMW Vehicle PMA combined, the RERs for new BMW passenger cars were 88.9%, 93.9%, 90.4%, and 96.7%, respectively, and the RERs for new BMW light trucks were 77%, 89.5%, 90.4%, and 93.7%, respectively.
Applying the Florida BMW Standard, in 2005, 2006, and 2007, in Holman's BMW Vehicle PMA, the RERs for new BMW passenger cars were 113.15%, 110.20%, and 111.26%, respectively, and the RERs for new BMW light trucks were 111.59%, 114.85%, and 117.15%, respectively.
Applying the Miami BMW Standard, in 2005, 2006, 2007, and 2008 (through June), in Holman's BMW Vehicle PMA, the RERs for new BMW passenger cars were 96.7%, 99.7%, 95.3%, and 101.1%, respectively, and the RERs for new BMW light trucks were 80.4%, 92.6%, 95%, and 99.4%, respectively.
Applying the Florida BMW Standard, in 2005, 2006, and 2007, in Vista's BMW Vehicle PMA, the RERs for new BMW passenger cars were 95.59%, 97.41%, and 100%, respectively, and the RERs for new BMW light trucks were 101.87%, 106.74%, and 105.33%, respectively.
Applying the Miami BMW Standard, in 2005, 2006, 2007, and 2008 (through June), in Vista's BMW Vehicle PMA, the RERs for new BMW passenger cars were 81.5%, 88.3%, 85.5%, and 92.2%, respectively, and the RERs for new BMW light trucks were 73.4%, 86%, 85.3%, and 87%, respectively.
Applying the Florida BMW Standard, in 2005, 2006, and 2007, in the Holman BMW Fort Lauderdale AGA, the RERs for new BMW passenger cars were 110.26%, 110.61%, and 112.65%,
respectively, and the RERs for new BMW light trucks were 109.43%, 119.44%, and 115.08%, respectively.
Applying the Miami BMW Standard, in 2005, 2006, 2007, and 2008 (through June), in the Holman BMW Fort Lauderdale AGA, the RERs for new BMW passenger cars were 94.7%, 74%, 96.7%, and 103.5%, respectively, and the RERs for new BMW light trucks were 78.8%, 96.2%, 93.2%, and 113.2%, respectively.
Applying the Florida BMW Standard, in 2005, 2006, and 2007, in the Holman BMW Pembroke Pines AGA, the RERs for new BMW passenger cars were 118.19%, 112.48%, and 112.15%, respectively, and the RERs for new BMW light trucks were 112.67%, 115.26%, and 116.41%, respectively.
Applying the Miami BMW Standard, in 2005, 2006, 2007, and 2008 (through June), in the Holman BMW Pembroke Pines AGA, the RERs for new BMW passenger cars were 100.8%, 101.7%, 95.9%, and 101.1%, respectively, and the RERs for new BMW light trucks were 81.1%, 93%, 94.4%, and 90.3%, respectively.
Applying the Florida BMW Standard, in 2005, 2006, and 2007, in the Vista BMW Coconut Creek AGA, the RERs for new BMW passenger cars were 92.66%, 94.39%, and 95.95%, respectively, and the RERs for new BMW light trucks were 102.04%, 104.21%, and 105.62%, respectively.
Applying the Miami BMW Standard, in 2005, 2006, 2007, and 2008 (through June), in the Vista BMW Coconut Creek AGA, the
RERs for new BMW passenger cars were 79%, 85.4%, 81.9%, and 86.1%, respectively, and the RERs for new BMW light trucks were 73.5%, 84.2%, 85.6%, and 86.9%, respectively.
Applying the Florida BMW Standard, in 2005, 2006, and 2007, in the Vista BMW Pompano Beach AGA, the RERs for new BMW passenger cars were 97.48%, 104.28%, and 107.56%, respectively, and the RERs for new BMW light trucks were 100%, 114.88%, and 105.11%, respectively.
Applying the Miami BMW Standard, in 2005, 2006, 2007, and 2008 (through June), in the Vista BMW Pompano Beach AGA, the RERs for new BMW passenger cars were 83.2%, 94.6%, 92.3%, and 102.7%, respectively, and the RERs for new BMW light trucks were 72.1%, 92.8%, 85.3%, and 88%, respectively.
The Florida BMW Standard is a reasonable market penetration standard, in contrast to the unreasonably high Miami BMW Standard; and therefore it, not the Miami BMW Standard, should be used to determine the pertinent "reasonably expected market penetration."
With respect MINI, BMW NA and Holman urge use of a market penetration standard reflecting MINI's average market penetration (as adjusted) in the Braman Miami MINI and South Motors MINI AGAs combined (Miami MINI Standard). Vista, on the other hand, asserts that the average market penetration attained by MINI in those portions of Florida where there is MINI
representation (as adjusted) should be the benchmark (Florida Represented MINI Standard).
In 2007, only one MINI PMA in Florida (Braman Miami's MINI PMA) and 16 of the 83 MINI PMAs in the United States had an RER of 100% or above applying the Miami MINI Standard.
The Florida Represented MINI Standard is a lower standard than the Miami BMW Standard; however, the average market penetration of MINI has historically been higher in represented areas of Florida than it has been regionally or nationally.
Applying the Florida Represented MINI Standard, in 2005, 2006, and 2007, in the area covering Holman's MINI PMA, Vista's MINI PMA, Braman Miami's MINI PMA, and the unrepresented portion of southwestern Broward County combined, the RERs for new MINIs were 111.83%, 111.76%, and 107.22%, respectively.
Applying the Florida Represented MINI Standard, in 2005, 2006, and 2007, in the area covering Holman's MINI PMA and Vista's MINI PMA combined, the RERs for new MINIs were 97.12%, 91.67%, and 85.96%, respectively.
Applying the Miami MINI Standard, in 2005, 2006, 2007, and 2008 (through June), in the area covering Holman's MINI PMA and Vista's MINI PMA combined, the RERs for new MINIs were 76.8%, 68.1%, 65.4%, and 71.2%, respectively.
Applying the Florida Represented MINI Standard, in 2005, 2006, and 2007, in the area covering the Holman MINI AGA and Vista MINI AGA combined, the RERs for new MINIs were 96.01%, 88.79%, and 82.34%, respectively.
Applying the Miami MINI Standard, in 2005, 2006, 2007, and 2008 (through June), in the area covering the Holman MINI AGA and Vista MINI AGA combined, the RERs for new MINIs were 75.9%, 66.1%, 62.9%, and 70.9%, respectively.
Applying the Florida Represented MINI Standard, in 2005, 2006, and 2007, in the Holman MINI PMA, the RERs for new MINIs were 104.89%, 97.69%, and 100.87%, respectively.
Applying the Miami MINI Standard, in 2005, 2006, 2007, and 2008 (through June), in the Holman MINI PMA, the RERs for new MINIs were 83.9%, 73%, 77.4%, and 79.9%, respectively.
Applying the Florida Represented MINI Standard, in 2005, 2006, and 2007, in the Holman MINI AGA, the RERs for new MINIs were 102.19%, 93.50%, and 92.21%, respectively.
Applying the Miami MINI Standard, in 2005, 2006, 2007, and 2008 (through June), in the Holman MINI AGA, the RERs for new MINIs were 81%, 69.9%, 71%, and 77.8%, respectively.
Applying the Florida Represented MINI Standard, in 2005, 2006, and 2007, in the Vista MINI PMA, the RERs for new MINIs were 91.47%, 87.36%, and 73.40%, respectively.
Applying the Miami MINI Standard, in 2005, 2006, 2007, and 2008 (through June), in the Vista MINI PMA, the RERs for new MINIs were 71.7%, 64.6%, 55.9%, and 63.9%, respectively.
Applying the Florida Represented MINI Standard, in 2005, 2006, and 2007, in the Vista MINI AGA, the RERs for new MINIs were 90.39%, 84.78%, and 72.24%, respectively.
Applying the Miami MINI Standard, in 2005, 2006, 2007, and 2008 (through June), in the Vista MINI AGA, the RERs for new MINIs were 70.9%, 62.7%, 55%, and 63.6%, respectively.
The Florida Represented MINI Standard is a reasonable market penetration standard, in contrast to the unreasonably high Miami MINI Standard; and therefore it, not the Miami MINI Standard, should be used to determine pertinent "reasonably expected market penetration."
BMW NA believes that the market penetration of new BMW Vehicles and new MINIs in the areas that it has identified as the relevant "communit[ies] or territor[ies]" in these cases can be improved if Holman BMW Fort Lauderdale and Holman MINI are relocated to the Proposed Location. Vista (whose Vista BMW Coconut Creek, Vista BMW Pompano Beach, and Vista MINI dealership locations are within a 12.5 mile radius of the Proposed Location) has protested these proposed relocations, and these protests are the subject of the instant cases.
BMW NA and Holman are dissatisfied with the sales and service facilities at Holman BMW Fort Lauderdale's and Holman MINI's present locations. For each of these dealerships, they would like to have facilities that are larger, and sales and service operations that are adjacent to, not distant from, each other. They also want to avoid having to make MINI customers (who often stay at the dealership and watch their vehicles being serviced) share service facilities (as they do now) with BMW Vehicle customers (with whom they generally do not share similar interests).
BMW NA has established minimum standards that the facilities of its BMW Vehicle and MINI dealers must meet. These standards deal with such things as the "size of [the] showroom," the "size of the new car display area," and the "number of service stalls in the service department," and they are "based on factors such as market potential, units in operation, and potential growth." In PMAs with two dealership locations, in determining whether the dealer has facilities that are in compliance with minimum standards, the facilities at both locations are "combined" and looked at together.
Notwithstanding BMW NA's and Holman's dissatisfaction with the existing facilities at the Holman BMW Fort Lauderdale and Holman MINI dealership locations, Holman's BMW Vehicle and MINI
facilities in Broward County meet the minimum standards required by BMW NA.
Despite the facility-related operational challenges it faces, Holman's CSIs for its BMW Vehicle and MINI franchises are at or slightly above average, with the CSI for Holman BMW Fort Lauderdale being comparable to that for Holman BMW Pembroke Pines. Moreover, Holman is one of the highest volume BMW Vehicle dealers in the United States, and with respect to its new MINI sales, in 2007, these sales exceeded Holman's 400 unit SPG and were greater, by 38, than the new MINI sales of Holman's Broward County intrabrand competitor, Vista, which operated out of newer and more spacious facilities.
According to Daniel Villani, the general manager of Holman BMW Fort Lauderdale, selling 175 new BMW Vehicles per month (2,100 per year) "pushes right up against" the limit of "what th[at] facility can handle" to "maintain an appropriate sales experience for the customers." In 2007, Holman BMW Fort Lauderdale sold a total of "a little less" than 1,800 new BMW Vehicles (1,748 of which were registered in Florida). Its sales declined in 2008.
Holman made an extensive, good faith, but unsuccessful, effort over several years to find a reasonable and feasible way to have the sales and service facilities it wants for Holman BMW Fort Lauderdale and Holman MINI without having to
relocate these dealerships outside a two-mile radius of their present locations. Holman purchased the Proposed Location (for
$27 million) only after having engaged in this exhaustive search.
The Proposed Location is a 10-acre site that is large enough to accommodate the facilities that Holman wants to construct for Holman BMW Fort Lauderdale and Holman MINI. These facilities would be considerably larger and more modern than those that these dealerships now have, potentially making consumers' shopping and service experiences at the dealerships more pleasant and enjoyable and improving the working conditions of the dealerships' employees. Construction of these new facilities would cost, according to Holman's current plans, between $20 and $25 million. There is no reason to believe that, if the Department approved the proposed relocations of Holman BMW Fort Lauderdale and Holman MINI to the Proposed Location (which is already zoned appropriately "for a car dealership"), Holman would not carry through with its construction plans. No evidence was presented of any obstacles, financial or otherwise, that would prevent or deter it from doing so. Accordingly, in assessing the potential impact of these proposed relocations, it is reasonable to assume that, if the proposed relocations are approved by the Department, the planned facilities will be built at the Proposed Location.
Holman will be allocated more BMW Vehicles and MINIs to sell at these larger, new facilities inasmuch as BMW NA has agreed of increase Holman's SPGs if Holman BMW Fort Lauderdale and Holman MINI are relocated, as proposed.
The Proposed Location is situated at the intersection of U.S. Route 1/Federal Highway and East Sunrise Boulevard in Fort Lauderdale, which, in 2007, had an average daily traffic count of 63,500 vehicles, 15,500 more vehicles than passed by the existing sales facilities of Holman BMW Fort Lauderdale and Holman MINI (Existing Sales Facilities). More vehicles going to and coming from downtown Fort Lauderdale, however, travel past the Existing Sales Facilities than the Proposed Location. To state the obvious, for these motorists, the Existing Sales Facilities would be more convenient, whereas the Proposed Location would be more convenient for those who drive by it every day.
The Proposed Location is in an area that the Holman organization knows well as a result of its years of experience operating Honda, Rolls-Royce, and Bentley dealerships a short distance away. There has been new development in the immediate vicinity of the Proposed Location. A new Home Depot was recently constructed and condominium apartment buildings are under construction. To the south and west is Holiday Park, next to which is an established residential neighborhood.
The Proposed Location is 2.23 miles (by air) north of the Existing Sales Facilities (2.5 miles, if driving). Moving Holman BMW Fort Lauderdale and Holman MINI to this location would situate them closer to their Vista intrabrand competitors to the north and further away from their Braman Miami intrabrand competitors to the south. The relocated dealerships would be
7.3 miles (by air) from Vista BMW Pompano Beach (8.2 miles, if driving); 10 miles (by air) from Vista BMW Coconut Creek and Vista MINI (12.4 miles, if driving); and 23.8 miles from Braman Miami BMW and Braman Miami MINI (24.8 miles, if driving), leaving consumers in northeastern Miami-Dade County and southeastern Broward County with slightly farther to travel to comparison shop for BMW and MINI products. The proposed relocations would also result in slight increases in the average distances BMW Vehicle and MINI customers in Holman's BMW Vehicle and MINI PMAs would have to travel to reach the nearest BMW or MINI dealership location. In short, the Proposed Location "is not optimal" and is less convenient "from a distance perspective" than the Existing Sales Facilities.
The proposed relocation of Holman BMW Fort Lauderdale would result in Vista's BMW Vehicle dealerships losing "geographic advantage" to Holman BMW Fort Lauderdale in three zip codes (one zip code in which Vista BMW Coconut Creek currently has geographic advantage and, in 2007, 18 new BMW
passenger vehicles and four new BMW light trucks sold by Vista BMW Coconut Creek were registered; and two zip codes in which Vista BMW Pompano Beach currently has geographic advantage and, in 2007, a total of 23 new BMW passenger vehicles and three new BMW light trucks sold by Vista BMW Pompano Beach were registered).
The proposed relocation of Holman MINI would result in Vista MINI losing "geographic advantage" to Holman MINI in one zip code. In 2007, Vista MINI did not sell any MINIs that were registered in this zip code in which it would losing "geographic advantage."
Any loss of "geographic advantage" to Holman would make it more difficult, but not impossible, for Vista to compete effectively against Holman. Vista is certainly capable of capturing sales in zip codes in which another dealer has "geographic advantage."
Vista would be further disadvantaged as a result of the proposed relocations by having to compete (with respect to both BMW Vehicle and MINI sales and service) against Holman dealerships (Holman BMW Fort Lauderdale and Holman MINI) which would have improved facilities with greater capacity, making these dealerships more formidable competitors than they would be if the status quo were maintained.
The impact of the proposed relocations on Vista, if Vista were to make no changes in its operations or facilities, would likely be negative (in terms of lost sales and service business), but the evidentiary record is insufficient for the undersigned, with any degree of confidence, to quantify, in dollars, what that negative impact would be.
Vista dealership operations are "extremely profitable," and the company has a "strong" balance sheet, enabling it to withstand the changes in its competitive position of the type that the proposed relocations might bring about.
It is possible that Vista could make changes in its operations (such as lowering prices) or to its facilities (such as following through with its "additional plans for expansion and renovation" of Vista BMW Pompano Beach) that would overcome the disadvantages resulting from the proposed relocations and help it to maintain its competitive position. Making these changes, however, could adversely effect Vista's bottom line.
Because of the increase in SPGs Holman has been promised if it relocates its Holman BMW Fort Lauderdale and Holman MINI dealerships, Holman would gain allocation and have more BMW Vehicles and MINIs to sell if these proposed relocations were approved. This would result, were market demand to return to pre-2008 levels, in more BMW Vehicles and MINIs being sold in areas served by these Holman dealerships
than would otherwise be the case, thereby benefiting BMW NA (a goal BMW NA would also be able to accomplish by simply increasing allocations to its dealers serving these areas to meet demand, without requiring any of them to relocate and build new facilities to receive these increased allocations).
The evidentiary record is devoid of any evidence that BMW NA attempted to coerce Vista or any other existing dealer into consenting to the proposed relocations.
Neither does the evidentiary record contain evidence that Vista is not in substantial compliance with its franchise agreements with BMW NA.9
CONCLUSIONS OF LAW
BMW NA is seeking the Department's approval of its proposal to relocate Holman BMW Fort Lauderdale and Holman MINI to the Proposed Location. It is seeking such approval pursuant to Section 320.642, Florida Statutes, which is among the statutory provisions included in a portion of Chapter 320, Florida Statutes (Sections 320.61 through 320.70, Florida Statutes, which hereinafter will be referred to as the "Act"), that was intended by the Legislature "to protect the public health, safety, and welfare of the citizens of the state by regulating the licensing of motor vehicle dealers and manufacturers, maintaining competition, providing consumer protection and fair trade and providing minorities with
opportunities for full participation as motor vehicle dealers."
§ 320.605, Fla. Stat.
Section 320.642, Florida Statutes, provides, in pertinent part, as follows:
Any licensee who proposes to establish an additional motor vehicle dealership or permit the relocation of an existing dealer to a location within a community or territory where the same line-make vehicle is presently represented by a franchised motor vehicle dealer or dealers shall give written notice of its intention to the department. Such notice shall state:
The specific location at which the additional or relocated motor vehicle dealership will be established.
The date on or after which the licensee intends to be engaged in business with the additional or relocated motor vehicle dealer at the proposed location.
The identity of all motor vehicle dealers who are franchised to sell the same line-make vehicle with licensed locations in the county or any contiguous county to the county where the additional or relocated motor vehicle dealer is proposed to be located.
The names and addresses of the dealer- operator and principal investors in the proposed additional or relocated motor vehicle dealership.
Immediately upon receipt of such notice the department shall cause a notice to be published in the Florida Administrative Weekly. The published notice shall state that a petition or complaint by any dealer with standing to protest pursuant to subsection (3) must be filed not more than
30 days from the date of publication of the notice in the Florida Administrative Weekly. The published notice shall describe and identify the proposed dealership sought to be licensed, and the department shall cause a copy of the notice to be mailed to those dealers identified in the licensee's notice under paragraph (c).
(2)(a) An application for a motor vehicle dealer license in any community or territory shall be denied when:
A timely protest is filed by a presently existing franchised motor vehicle dealer with standing to protest as defined in subsection (3); and
The licensee fails to show that the existing franchised dealer or dealers who register new motor vehicle retail sales or retail leases of the same line-make in the community or territory of the proposed dealership are not providing adequate representation of such line-make motor vehicles in such community or territory. The burden of proof in establishing inadequate representation shall be on the licensee.
(b) In determining whether the existing franchised motor vehicle dealer or dealers are providing adequate representation in the community or territory for the line-make, the department may consider evidence which may include, but is not limited to:
The impact of the establishment of the proposed or relocated dealer on the consumers, public interest, existing dealers, and the licensee; provided, however, that financial impact may only be considered with respect to the protesting dealer or dealers.
The size and permanency of investment reasonably made and reasonable obligations
incurred by the existing dealer or dealers to perform their obligations under the dealer agreement.
The reasonably expected market penetration of the line-make motor vehicle for the community or territory involved, after consideration of all factors which may affect said penetration, including, but not limited to, demographic factors such as age, income, education, size class preference, product popularity, retail lease transactions, or other factors affecting sales to consumers of the community or territory.
Any actions by the licensees in denying its existing dealer or dealers of the same line-make the opportunity for reasonable growth, market expansion, or relocation, including the availability of line-make vehicles in keeping with the reasonable expectations of the licensee in providing an adequate number of dealers in the community or territory.
Any attempts by the licensee to coerce the existing dealer or dealers into consenting to additional or relocated franchises of the same line-make in the community or territory.
Distance, travel time, traffic patterns, and accessibility between the existing dealer or dealers of the same line-make and the location of the proposed additional or relocated dealer.
Whether benefits to consumers will likely occur from the establishment or relocation of the dealership which cannot be obtained by other geographic or demographic changes or expected changes in the community or territory.
Whether the protesting dealer or dealers are in substantial compliance with their dealer agreement.
Whether there is adequate interbrand and intrabrand competition with respect to said line-make in the community or territory and adequately convenient consumer care for the motor vehicles of the line-make, including the adequacy of sales and service facilities.
Whether the establishment or relocation of the proposed dealership appears to be warranted and justified based on economic and marketing conditions pertinent to dealers competing in the community or territory, including anticipated future changes.
The volume of registrations and service business transacted by the existing dealer or dealers of the same line-make in the relevant community or territory of the proposed dealership.
An existing franchised motor vehicle dealer or dealers shall have standing to protest a proposed additional or relocated motor vehicle dealer where the existing motor vehicle dealer or dealers have a franchise agreement for the same line-make vehicle to be sold or serviced by the proposed additional or relocated motor vehicle dealer and are physically located so as to meet or satisfy any of the following requirements or conditions:
* * *
(b) If the proposed additional or relocated motor vehicle dealer is to be located in a county with a population of more than 300,000 according to the most recent data of the United States Census Bureau or the data of the Bureau of Economic and Business Research of the University of Florida:
Any existing motor vehicle dealer or dealers of the same line-make have a licensed franchise location within a radius of 12.5 miles of the location of the proposed additional or relocated motor vehicle dealer; or
Any existing motor vehicle dealer or dealers of the same line-make can establish that during any 12-month period of the 36- month period preceding the filing of the licensee's application for the proposed dealership, such dealer or its predecessor made 25 percent of its retail sales of new motor vehicles to persons whose registered household addresses were located within a radius of 12.5 miles of the location of the proposed additional or relocated motor vehicle dealer; provided such existing dealer is located in the same county or any county contiguous to the county where the additional or relocated dealer is proposed to be located.
The department's decision to deny issuance of a license under this section shall remain in effect for a period of 12 months. The department shall not issue a license for the proposed additional or relocated motor vehicle dealer until a final decision by the department is rendered determining that the application for the motor vehicle dealer's license should be granted.
* * *
Section 320.60, Florida Statutes, contains definitions of various "words and terms" used in the Act. It provides, in pertinent part, as follows:
Whenever used in ss. 320.61-320.70, unless the context otherwise requires, the
following words and terms have the following meanings:
"Agreement" or "franchise agreement" means a contract, franchise, new motor vehicle franchise, sales and service agreement, or dealer agreement or any other terminology used to describe the contractual relationship between a manufacturer, factory branch, distributor, or importer, and a motor vehicle dealer, pursuant to which the motor vehicle dealer is authorized to transact business pertaining to motor vehicles of a particular line-make.
* * *
"Department" means the Department of Highway Safety and Motor Vehicles.
"Distributor" means a person, resident or nonresident, who, in whole or in part, sells or distributes motor vehicles to motor vehicle dealers or who maintains distributor representatives.
* * *
"Importer" means any person who imports vehicles from a foreign country into the United States or into this state for the purpose of sale or lease.
"Licensee" means any person licensed or required to be licensed under s. 320.61.
"Manufacturer" means any person, whether a resident or nonresident of this state, who manufactures or assembles motor vehicles or who manufactures or installs on previously assembled truck chassis special bodies or equipment which, when installed, form an integral part of the motor vehicle and which constitute a major manufacturing alteration. The term "manufacturer" includes a central or principal sales corporation or other entity through which,
by contractual agreement or otherwise, it distributes its products.
"Motor vehicle" means any new automobile, motorcycle, or truck, including all trucks, regardless of weight, including "heavy truck" as defined in s. 320.01(10) and "truck" as defined in s. 320.01(9), the equitable or legal title to which has never been transferred by a manufacturer, distributor, importer, or dealer to an ultimate purchaser; . . . .
(11)(a) "Motor vehicle dealer" means any person, firm, company, corporation, or other entity, who,
Is licensed pursuant to s. 320.27 as a "franchised motor vehicle dealer" and, for commission, money, or other things of value, repairs or services motor vehicles or used motor vehicles pursuant to an agreement as defined in subsection (1), or
Who sells, exchanges, buys, leases or rents, or offers, or attempts to negotiate a sale or exchange of any interest in, motor vehicles, or
Who is engaged wholly or in part in the business of selling motor vehicles, whether or not such motor vehicles are owned by such person, firm, company, or corporation.
(b) Any person who repairs or services three or more motor vehicles or used motor vehicles as set forth in paragraph (a), or who buys, sells, or deals in three or more motor vehicles in any 12-month period or who offers or displays for sale three or more motor vehicles in any 12-month period shall be prima facie presumed to be a motor vehicle dealer. The terms "selling" and "sale" include lease-purchase transactions.
* * *
(12) "Person" means any natural person, partnership, firm, corporation, association, joint venture, trust, or other legal entity.
* * *
(14) "Line-make vehicles" are those motor vehicles which are offered for sale, lease, or distribution under a common name, trademark, service mark, or brand name of the manufacturer of same.
* * *
BMW NA is a "distributor" and "importer," as those terms are defined in Section 320.60(5) and (7), Florida Statutes, and, as such, it is also a "licensee," as that term is defined in Section 320.60(8), Florida Statutes. It distributes "line-make vehicles," as that term is defined in Section 320.60(14), Florida Statutes, produced by its parent corporation.
Holman, Vista, Braman Miami, South Motors, and Braman West Palm Beach are "motor vehicle dealers," as that term is defined in Section 320.60(11), Florida Statutes. They each operate under an "agreement" or "franchise agreement" (as those terms are defined in Section 320.60(1), Florida Statutes) with BMW NA pursuant to which they sell and repair BMW and MINI-brand vehicles imported and distributed by BMW NA.
Vista has standing, pursuant to Section 320.642(3)(b)1., Florida Statutes, to protest the proposed relocations, and its protests were timely filed.
The timely filing of these protests triggered BMW NA's burden of proving, by a preponderance of the evidence, that BMW Vehicle and MINI dealers "who register new motor vehicle retail sales or retail leases of [these] line-make[s] in the communit[ies] or territor[ies] of the proposed [relocated] dealership[s] are not providing adequate representation of such line-make motor vehicles in such communit[ies] or territor[ies]." See Florida Department of Health and Rehabilitative Services v. Career Service Commission, 289 So. 2d. 412, 415 (Fla. 4th DCA 1974)(generally, burden of proof before an administrative agency is by a preponderance of the evidence).
Before it can be determined whether or not BMW NA met its burden of proving "inadequate representation" in the "communit[ies] or territor[ies] of the proposed [relocated] dealership[s]," these "communit[ies] or "territor[ies]" (Com/Ters) must be identified. The PMAs assigned Holman pursuant to the terms of its BMW passenger car, BMW light truck, and MINI franchise agreements with BMW NA are "entitled to great weight in determining the relevant [Com/Ters] under Section 320.642, Florida Statutes," but they are "not conclusive of the question." Larry Dimmitt Cadillac, Inc. v. Seacrest Cadillac, Inc., 558 So. 2d 136, 138 (Fla. 1st DCA 1990).
The parties all agree that these PMAs are too small in size to constitute the relevant Com/Ters in these cases.
They advocate the identification of more expansive Com/Ters, but differ as to what the boundaries of these larger Com/Ters should be. According to BMW NA and Holman, the following are the relevant Com/Ters in these cases (Petitioners' Proposed Com/Ters): for BMW Vehicles, either the combination of Holman's BMW Vehicle and Vista's BMW Vehicle PMAs, or, alternatively, the AGAs for Holman BMW Fort Lauderdale, Holman BMW Pembroke Pines, Vista BMW Coconut Creek, and Vista BMW Pompano Beach combined; and for MINI, either the combination of Holman's MINI and Vista's MINI PMAs, or, alternatively, the AGAs for Holman MINI and Vista MINI combined. Vista, on the other hand, proposes the following relevant Com/Ters (Vista's Proposed Com/Ters): for BMW Vehicles, the combination of Holman's BMW Vehicle, Vista's BMW Vehicle, and Braman Miami's BMW Vehicle PMAs; and for MINI, the AGAs for Holman MINI, Vista MINI, and Braman Miami MINI combined. In urging the rejection of Petitioners' Proposed Com/Ters, Vista argues:
[T]he Com/Ters proposed by BMW NA for BMW passenger car, BMW light truck, and MINI must be rejected as too restrictive. Each of these proposed Com/Ters is broader than the Holman BMW Com/Ter [consisting of Holman's BMW Vehicle PMA alone] or Holman MINI Com/Ter [consisting only of Holman's MINI PMA], in that the BMW NA[-]proposed Com/Ters contain, more or less, both the
Holman [BMW Vehicle] PMA and Vista [BMW Vehicle] PMA (in the case of BMW) or Holman MINI PMA and Vista MINI PMA (in the case of MINI). However, Holman [the would-be relocating dealer] conducts more BMW [Vehicle] business in the Braman Miami [BMW Vehicle] PMA, an area excluded by BMW NA in its proposed Com/Ters, than in the Vista [BMW Vehicle] PMA, an area included by BMW NA. The same is true with respect to Holman MINI, which conducts more MINI business in the Braman Miami MINI PMA than in the Vista MINI PMA.
Vista then goes on to assert that, "[i]ncluding the Vista [BMW Vehicle] and Vista MINI PMAs in the relevant community or territory definition, but excluding the Braman Miami [BMW Vehicle] and Braman Miami MINI PMAs, is unsupportable and unreasonable." The argument is a persuasive one, and it has convinced the undersigned to find Vista's Proposed Com/Ters, rather than Petitioners' Proposed Com/Ters, to be the relevant Com/Ters (Relevant Com/Ters) in these cases.
Petitioners acknowledge in their Proposed Recommended Order that Holman "seeks to relocate [Holman BMW Fort Lauderdale and Holman MINI] for the sole purpose of improving its facilities in order to better serve its existing and future customers." There is no question that, with respect to Holman's existing facilities, there is room for improvement.
Nonetheless, these facilities are adequate, when measured against the minimum facility standards BMW NA has established for its dealers. Furthermore, Holman's having to operate out of
these facilities has not prevented Holman BMW Fort Lauderdale's and Holman MINI's CSIs (which BMW NA uses to evaluate dealer performance and which reflect customer satisfaction) from reaching average or slightly above-average levels. Neither has it prevented the market penetration of BMW Vehicles and MINIs in the Relevant Com/Ters from meeting reasonable expectations. Nor has it prevented Holman from being among the highest volume BMW Vehicle dealers in the nation and outselling both its 400 unit MINI SPG and its Broward County MINI competitor, Vista MINI.
Despite the punishing economic and market conditions that presently exist and the difficulty in predicting the timing and intensity of a rebound, Holman has determined that it would be in its best interest to make a substantial investment in relocating Holman BMW Fort Lauderdale and Holman MINI and building bigger and upgraded facilities for these dealerships. BMW NA believes that it would benefit from Holman taking such action, while Vista (which has made substantial expenditures to enable it to serve the Com/Ters through its dealerships) feels that it would be disadvantaged. These self-assessments of the impact of the proposed relocations (positive for Holman and for BMW NA and negative for Vista) appear to be reasonable and sound, and they have been accepted by the undersigned. Insofar as consumers are concerned, the effects of the proposed relocations would likely be mixed, but marginally net positive.
"[F]rom a distance [or travel] perspective," Holman BMW Fort Lauderdale and Holman MINI would be slightly less conveniently located; however, from a "facilities perspective," there likely would be an improvement in customer comfort and service.
That the proposed relocations (and ensuing facility improvements) would result in Holman's being able to "better serve its existing and future customers" and, consequently, BMW NA's being better represented in the Com/Ters is not dispositive of the issue of whether these proposed relocations should be approved. As was stated in General Motors Corporation v. Roger Whitely Chevrolet, Inc., Nos. 03-4083 and 03-4084, 2005 Fla. Div. Adm. Hear. LEXIS 746 *26-27 (Fla. DOAH February 16, 2005), adopted, No. HSMV-05-285-FOF-DMV (Fla. HSMV May 9, 2005):
In making the determination that a manufacturer is not being adequately represented in a market, it is not enough to simply conclude that the existing dealers could do a better job, or that the proposed dealer network change will improve the manufacturer's performance in the market.
Hess Marine, Inc. v. Calvin, 296 So. 2d 114,
115 (Fla. 1st DCA 1974).[10] While, however, one must not forget the famous words of Louise Heath Leber that "[t]here's always room for improvement, you know-it's the biggest room in the house," that sentiment does not equate to inadequate representation. The real focus of proceedings brought under Section 320.642 is whether the existing dealers are doing enough.
Cf. Manasota-88, Inc., v. Department of Health and Rehabilitative Services, No. 85-2813R, 1985 Fla. ENV LEXIS 124
*28 (Fla. DOAH December 20, 1985)(Final Order)("That provision only mandates that 'adequate provision shall be made by law for the abatement of air . . . pollution . . . .' Webster's New World Dictionary defines 'adequate' to include the following: '1. equal to a requirement or occasion; sufficient; suitable.
barely satisfactory; acceptable but not remarkable.' The Hearing Officer rejects the definition proposed by the Petitioner that adequate must mean 'fully sufficient.' In common usage, adequacy is used to mean 'acceptable but not remarkable.' The proposed rules surely are at least 'acceptable but not remarkable.'"); United States v. Messino, 181 F.3d 826, 830-831 (7th Cir. 1999)("The Sixth Amendment guarantees Martin adequate counsel, not the best possible counsel."); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1027 (9th Cir. 1998)("Of course it is possible, as many of the objectors' affidavits imply, that the settlement could have been better. But this possibility does not mean the settlement presented was not fair, reasonable or adequate."); J. S. K. v. Hendry County School Board, 941 F.2d 1563, 1573 (11th Cir. 1991)("If the educational benefits are adequate based on surrounding and supporting facts, EAHCA requirements have been satisfied. While a trifle might not represent 'adequate' benefits, maximum improvement is never
required.")(citation omitted); Union National Bank v. Mosbacher, 933 F.2d 1440, 1444 (8th Cir. 1991)("[I]t requires only that the plaintiff show that the fraud inflicted a loss that can be monetized with adequate (which does not mean a high degree of) precision by the methods of litigation."); and United Steelworkers of America v. Marshall, 647 F.2d 1189, 1251 (D.C. Cir. 1980)("'Adequately,' both in normal use and as a contemporary legal cliché, means 'suitably' or 'passably' or 'just barely.'").
Having considered, weighed, and balanced the factors enumerated in Section 320.642(2)(b), Florida Statutes, in light of the facts found herein, the undersigned concludes that BMW NA has failed to meet its burden of proving by a preponderance of the evidence that it is not receiving "adequate representation" in the Relevant Com/Ters in these cases.
BMW NA and Holman argue in their Proposed Recommended Order that, even if it is determined that BMW NA failed to show a lack of "adequate representation" in the relevant Com/Ters (and they implore the undersigned not to make such a determination), the proposed relocations should still be approved "because there remain two identifiable plots within all of the proposed [Com/Ters] that are not adequately represented – specifically, the Vista [BMW] Coconut Creek AGA [and the Vista MINI AGA]– regardless of which expert's expected penetration
standard is used." In making this argument, they rely on the following language in Bill Kelley Chevrolet, Inc. v. Calvin, 322 So. 2d 50, 52 (Fla. 1st DCA 1975):
We agree with the Director, General Motors and Berwick that § 320.642 does not foreclose additional Chevrolet dealer representation in the "community or territory" - the Miami multiple dealer area
- simply because each existing dealer now tends his own garden well and that the product of all twelve, taken together, is adequate by territorial standards. If within the territory described in the nonexclusive franchise agreements there remains an identifiable plot not yet cultivated, which could be expected to flourish if given the attention which the others in their turns received, we think the Director is justified in concluding that the cultivation of the territory is not adequate. We agree with the Director that it would be unreasonable and arbitrary to deny General Motors and its chosen applicant the right to proceed under these circumstances.
To the extent that this holding suggests that, under Section 320.642, Florida Statutes, a lack of "adequate representation" may be shown even if no inadequacy exists when representation is measured on a Com/Ter-wide basis, it stretches the language of the statute right up to its breaking point. Therefore, the holding should not be extended beyond the specific facts that were before the court.
The facts of the instant cases are distinguishable from those in Bill Kelley Chevrolet in two key respects.
Firstly, in Bill Kelley Chevrolet, there was no existing dealer located close enough to the population in the "identifiable plot not yet cultivated" (described in the opinion as "the Hollywood area") "to exploit a geographic advantage there." Id. at 51.
In the instant cases, in contrast, there is already a dealer (Vista) located in both the Vista BMW Coconut Creek AGA and the Vista MINI AGA (which, by definition, are both areas in which Vista has "geographic advantage"). Secondly, and perhaps more importantly, in Bill Kelley Chevrolet, the proposal before the Department was to locate a dealership within the "identifiable plot not yet cultivated." Id. Contrastingly, in the instant cases, the Proposed Location is outside the Vista BMW Coconut Creek AGA and the Vista MINI AGA. For these reasons, the undersigned finds that the holding in Bill Kelley Chevrolet is inapposite to the instant cases, and he rejects the argument that the Vista BMW Coconut Creek AGA and the Vista MINI AGA are "identifiable plot[s] not yet cultivated," as that term was used in that case.
RECOMMENDATION
Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby
RECOMMENDED that the Department of Highway Safety and Motor Vehicles issue a final order denying approval of the proposed relocations of Holman BMW Fort Lauderdale and Holman MINI to the
Proposed Location inasmuch as BMW NA has failed to meet its burden of proving a lack of "adequate representation" of the BMW passenger car, BMW light truck, and MINI line-makes in the Relevant Com/Ters.
DONE AND ENTERED this 27th day of April, 2009, in Tallahassee, Leon County, Florida.
S
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675 SUNCOM 278-9675
Fax Filing (850) 921-6847
Filed with the Clerk of the Division of Administrative Hearings this 27th day of April, 2009.
1 Unless otherwise noted, all references in this Recommended Order to Florida Statutes are to Florida Statutes (2008).
2 The undersigned reserved ruling on the admissibility of pages R48 through R58 of Petitioner's Exhibit 50. He has since determined that these pages of the exhibit, along with the related testimony of Mr. Anderson, should be rejected as having no bearing on the issues being litigated in these cases.
3 Vista and South Motors have common ownership.
4 In 2005, and for part of 2006, Broward County only had three BMW Vehicle dealership locations, compared to the four it now has.
5 Like other South Florida dealers, Vista relies heavily on leasing. "Historically about 70% of [Vista's] business is lease[-based]."
6 Holman's "current SPG for MINI passenger cars is 400."
7 Further hampering sales was a decision made in April or May 2008, by BMW Financial Services (BMW FS), which provides financing to BMW Vehicle dealers. BMW FS "lowered the residual" values on [leased] vehicles." This resulted in higher monthly lease payments, thus making leasing a BMW Vehicle less attractive than it had previously been. In addition, the tightening of the credit market rendered traditional purchase financing more difficult.
8 For Sandy Sansing's BMW Vehicle PMA to have had an RER of 100% or above in 2007 applying the Miami BMW Standard, at least 244 new BMW passenger cars and 64 new BMW light trucks needed to be registered. The number of actual registrations of new BMW passenger cars for the year in the PMA was 271. The number of actual registrations of new BMW light trucks for the year in the PMA was 80.
9 The undersigned has considered, and rejected, BMW NA's and Holman's argument that comments made by Vista's Chairman of the Board and majority owner to a BMW NA representative at a meeting held in February 2008 (that the BMW NA representative
"took . . . as a threat" and considered unethical) constituted a substantial breach of Vista's franchise agreements.
10 In Hess Marine, the court held that a finding that a manufacturer could be "more adequately served" was not the same as a finding of a lack of "adequate representation." Id.
COPIES FURNISHED:
Dean Bunch, Esquire
Melissa Fletcher Allaman, Esquire
J. Andrew Bertron, Jr., Esquire
Nelson Mullins Riley & Scarborough LLP 3600 Maclay Boulevard South, Suite 202
Tallahassee, Florida 32309
Kathy Mullin, General Counsel Holman Enterprises
7411 Maple Avenue
Pennsauken, New Jersey 08109
John W. Forehand, Esquire Lewis, Longman & Walker, P.A.
2600 Centennial Place, Suite 100
Tallahassee, Florida 32308-0572
Barry Richard, Esquire John K. Londot, Esquire Greenberg Traurig, P.A.
101 East College Avenue Post Office Box 1838 Tallahassee, Florida 32302
Carl A. Ford, Director Division of Motor Vehicles
Department of Highway Safety and Motor Vehicles
Neil Kirkman Building, Room B-439 2900 Apalachee Parkway
Tallahassee, Florida 32399-0500
Robin Lotane, General Counsel Department of Highway Safety and
Motor Vehicles
Neil Kirkman Building 2900 Apalachee Parkway
Tallahassee, Florida 32399-0500
Michael J. Alderman, Esquire Department of Highway Safety and
Motor Vehicles
Neil Kirkman Building, Room A432 2900 Apalachee Parkway
Tallahassee, Florida 32344
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days from the date of this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| Jun. 18, 2009 | Agency Final Order | |
| Apr. 27, 2009 | Recommended Order | Recommended that approval of proposed dealership relocations be denied where licensee failed to meet its burden of showing inadequate representation in the relevant "communities" or "territories." |
