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ACT No. 1043
Regular Session, 2010
HOUSE BILL NO. 1464 (Substitute for House Bill No. 1089 by Representative Ellington)
BY REPRESENTATIVE ELLINGTON
AN ACT1
To enact R.S. 32:1268.3 and to repeal R.S. 32:1268.1(B), relative to repurchase of marine2
products; to provide for the repurchase of marine products by a manufacturer,3
distributor, or wholesaler; to provide for termination agreements; to provide for4
exemptions; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 32:1268.3 is hereby enacted to read as follows: 7
ยง1268.3. Manufacturer, distributor, or wholesaler repurchase; marine dealer;8
products9
A. If any marine dealer enters into a franchise with a manufacturer,10
distributor, or wholesaler wherein the marine dealer agrees to maintain an inventory11
of marine products or repair parts, the manufacturer, distributor, or wholesaler shall12
not terminate or fail to renew such franchise unless there is a breach of the franchise13
by the marine dealer and until ninety days after notice of such intention to terminate,14
including the breach of the franchise, has been sent by certified mail, return receipt15
requested, or commercial delivery service with verification of receipt, to the marine16
dealer and the marine dealer has failed to correct the breach within such period.17
B. If the franchise is terminated as a result of any action by the marine dealer18
and the manufacturer, distributor, or wholesaler has not given due cause, as provided19
in this Section, for termination of such franchise, the manufacturer, distributor, or20
wholesaler shall not be required to repurchase the inventory as provided in this21
Section; however, if the franchise is terminated as a result of any action by the22
marine dealer and the manufacturer, distributor, or wholesaler has given the marine23
dealer due cause, as provided in this Section, to terminate the franchise, the24 ENROLLEDHB NO. 1464
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manufacturer, distributor, or wholesaler shall be required to repurchase that1
inventory previously purchased from them, including any new and unused marines2
products of the current and immediate prior model or program year and new and3
unused parts inventory as provided in this Section.4
C. It shall be unlawful for the manufacturer, wholesaler, or distributor,5
without due cause and pursuant to its own initiating action, to terminate or fail to6
renew a franchise, unless the manufacturer, wholesaler, distributor repurchases the7
new and unused inventory as provided for in this Section.8
D. It shall not be unlawful for the marine dealer with due cause and pursuant9
to the marine dealer's own initiating action to terminate or fail to renew a franchise10
with a manufacturer, wholesaler, or distributor, and the manufacturer, wholesaler,11
or distributor shall repurchase inventory as provided by this Section. To determine12
what constitutes due cause for a marine dealer to terminate or fail to renew a13
franchise, the following factors regarding the manufacturer, wholesaler, distributor14
or representative of one of the so named shall include whether the manufacturer,15
wholesaler, distributor, or one of the so named:16
(1) Has made a material misrepresentation in accepting or acting under the17
franchise.18
(2) Has engaged in an unfair business practice.19
(3) Has engaged in conduct which is injurious or detrimental to public20
welfare.21
(4) Has failed to comply with any applicable Section of this Chapter.22
(5) Has been convicted of a crime, the effect of which would be detrimental23
to the marine dealership or dealer.24
(6) Has violated the Louisiana marine dealers area of responsibility.25
(7) Has failed to operate in the normal course of business for thirty26
consecutive days.27
(8) Has failed to comply with the terms of the franchise with the marine28
dealer.29 ENROLLEDHB NO. 1464
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(9) Has materially misrepresented the performance or fitness for sale or use1
of a product line or products covered by the franchise.2
E. If a manufacturer, distributor, or wholesaler does not intend to renew a3
franchise, the manufacturer, distributor, or wholesaler shall give the marine dealer4
ninety days written notice prior to the effective date by certified mail, return receipt5
requested, or commercial delivery service with verification of receipt.6
F. As required by this Section, the manufacturer, distributor, or wholesaler7
shall repurchase that inventory which can be verified as previously purchased from8
them, including all new and unused marine products of the current and immediate9
prior model or program year and new and unused parts on hand and held by the10
marine dealer on the date of termination of the contract. The manufacturer,11
distributor, or wholesaler shall pay an amount equivalent to the cost actually paid by12
the marine dealer, including discounts given and rebates paid per unit for any new,13
unused, undamaged, and unaltered from original invoice and delivery, and complete14
marine product. The manufacturer, distributor, or wholesaler shall also pay an15
amount equal to the price paid by the marine dealer for any new, unused, and16
undamaged repair parts and accessories which are listed in the manufacturer's,17
distributor's, or wholesaler's prevailing parts list or were delivered in the past forty-18
eight months and are in their original packaging.19
G. The provisions of this Section shall not require the repurchase from a20
marine dealer of:21
(1) Any repair part which has a limited storage life or is otherwise subject22
to deterioration.23
(2) Any single repair part which is priced and packaged as a set of two or24
more items.25
(3) Any repair part which, because of its condition, is not resalable as a new26
part without repackaging or reconditioning.27
(4) Any inventory for which the marine dealer cannot provide good title, free28
and clear of all claims, liens, and encumbrances.29 ENROLLEDHB NO. 1464
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(5) Any inventory which the marine dealer desires to keep, provided that the1
marine dealer has a contractual right to do so.2
(6) Any marine product which is not in new, unused, undamaged, and3
complete condition.4
(7) Any repair parts which are not in new, unused, and undamaged condition.5
(8) Any inventory which was ordered by the marine dealer on or after the6
date of receipt of the notification of termination of the franchise.7
(9) Any inventory which was acquired by the marine dealer from any source8
other than the manufacturer, distributor, or wholesaler, or its immediate predecessor.9
(10) Any marine product that has been altered substantially from original10
delivery.11
H. Upon termination of the franchise, the marine dealer shall submit a final12
inventory of marine products and parts on hand to the manufacturer, distributor, or13
wholesaler by certified mail, return receipt requested, or commercial delivery service14
with verification of receipt. If a manufacturer, distributor, or wholesaler fails or15
refuses to repurchase as required by this Section within thirty days of the receipt of16
the inventory, without just cause, the manufacturer, distributor, or wholesaler shall17
be subjected to a penalty of the marine dealer's reasonable attorney fees, court costs,18
and interest on the inventory value of returnable marine products and parts required19
to be purchased computed at the rate of one and one-half percent per month from the20
thirty-first day, as long as such repurchase is not made.21
I. Notwithstanding any other provision of law to the contrary, it shall be22
unlawful for a manufacturer, distributor, or wholesaler, either by contract or practice,23
to assess repurchase or restocking charges, freight charges except for return charges,24
reimbursement of interest charges paid, and any similar charges to the marine dealer.25
J. If a marine dealer completes a bona fide, orderly, and permanent closure26
of the marine dealership, which does not involve a sale of the dealership, and27
provides at least ninety days notice to the manufacturer, wholesaler, or distributor,28
the marine products and parts inventory shall be repurchased by the manufacturer,29
wholesaler, or distributor in the manner provided for in this Section, when a30 ENROLLEDHB NO. 1464
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franchise is terminated as result of action by the manufacturer, wholesaler, or1
distributor.2
K. In the event of the death or incapacity of the marine dealer or the majority3
owner of a person operating as a marine dealer, the manufacturer, distributor, or4
wholesaler shall, at the option of the heirs if the marine dealer died intestate or the5
legatees or transferees under the terms of the deceased marine dealer's last will and6
testament if the marine dealer died testate, repurchase the inventory from the heirs,7
legatees, or transferees as if the manufacturer, distributor, or wholesaler had8
terminated the contract, and the inventory repurchase provisions of this Section shall9
apply. The heirs or legatees shall have until the end of the contract term or one year10
from the date of the death of the marine dealer or majority owner of a person,11
whichever comes first, to exercise their option pursuant to this Section; provided,12
however, that nothing in this Section shall require the repurchase of inventory if the13
heirs, legatees, or transferees and the manufacturer, distributor, or wholesaler enter14
into a new franchise to operate the marine dealership.15
Section 2. R.S. 32:1268.1(B) is hereby repealed in its entirety.16
Section 3. If House Bill No. 1222 of the 2010 Regular Session is enacted into law,17
the Louisiana State Law Institute is directed to redesignate R.S. 32:1268.3 to R.S. 32:1268.1.18
Section 4. This Act shall become effective on January 1, 2011.19
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: