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SENATE DOCKET, NO. 1036 FILED ON: 1/18/2023
SENATE . . . . . . . . . . . . . . No. 151
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Brendan P. Crighton
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act further regulating business practices between motor vehicle dealers, manufacturers, and
distributors.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :Brendan P. CrightonThird Essex 1 of 9
SENATE DOCKET, NO. 1036 FILED ON: 1/18/2023
SENATE . . . . . . . . . . . . . . No. 151
By Mr. Crighton, a petition (accompanied by bill, Senate, No. 151) of Brendan P. Crighton for
legislation to further regulate business practices between motor vehicle dealers, manufacturers,
and distributors. Consumer Protection and Professional Licensure.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act further regulating business practices between motor vehicle dealers, manufacturers, and
distributors.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Subsection (c) of said section 4 of said chapter 93B, as appearing in the
22020 Official Edition, is hereby amended by inserting after paragraph (12) the following six
3paragraphs: -
4 (13) to require, coerce, or attempt to coerce any dealer by program, policy, standard, or
5otherwise to: (a) change location of the dealership; (b) construct, renovate, or make any
6substantial changes, alterations, or remodeling to a dealer’s sales or services facilities; or (c) add
7to or replace a dealer’s sales or services facilities; provided, however, that nothing herein shall
8prohibit a manufacturer or distributor from continuing a facility improvement program that is in
9effect as of the effective date of this paragraph with more than one dealer in the commonwealth
10or to renewing or modifying such program, or providing lump sum or regularly-scheduled
11payments to assist a dealer in making a facility improvement, including construction, alteration
12or remodeling, or installing signage or an image element of the manufacturer or distributor; 2 of 9
13provided further, that the provisions of the facility improvement program in which such dealer
14participates be contained in a written agreement voluntarily entered into by the dealer and must
15be made available, on substantially similar terms, to any of the manufacturer’s or distributor’s
16other same line-make dealers in the commonwealth with whom the manufacturer or distributor
17offers to enter into such an agreement; provided further, that, except as necessary to comply with
18a health or safety law or to comply with a technology requirement which is necessary to sell or
19service a motor vehicle that the motor vehicle dealer is authorized or licensed by the
20manufacturer or distributor to sell or service, a manufacturer, distributor, or franchisor
21representative shall not require, coerce, or attempt to coerce a motor vehicle dealer, by program,
22policy, facility guide, standard or otherwise, to change the location of the dealership, replace, or
23construct a new dealer facility or substantially alter or remodel an existing dealer facility before
24the date that is ten years after the date the construction of the new dealer facility or substantial
25alteration or remodeling at that location was completed regardless of whether a successor dealer
26has been appointed; provided further, that such construction, alteration or remodeling
27substantially complied with the manufacturer’s or distributor’s brand image standards or plans
28that the manufacturer or distributor provided at the time the construction, alteration, or
29remodeling was completed.
30 (14) to require a dealer to provide to the franchisor representative, manufacturer or
31distributor its customer lists, service files, or information about a retail customer unless
32necessary: (a) for the sale and delivery of a new motor vehicle to a retail buyer; (b) to validate
33and pay customer or dealer incentives; (c) for reasonable marketing purposes; (d) for warranty
34reimbursement substantiation under this chapter; or (e) to enable the manufacturer to fulfill
35safety, recall, or other legal obligations imposed by state or federal law. A manufacturer or 3 of 9
36distributor shall not share, sell, or transfer to other dealers or third party’s customer information
37obtained from a dealer and not otherwise publicly available unless otherwise agreed to by the
38originating dealer or unless the franchise has been terminated. Notwithstanding any consent,
39authorization, release, franchise agreement or other agreement or contract, a manufacturer or
40distributor, or any third party acting on behalf or through a manufacturer or distributor, having
41electronic access to consumer or customer data or other information in a computer system
42utilized by a dealer, or who has otherwise been provided consumer or customer data or
43information by the dealer, shall fully indemnify and hold harmless the dealer from whom it has
44acquired the consumer or customer data or other information from all claims, demands, damages,
45liabilities, costs, and expenses incurred by the dealer, arising out of any alleged or actual data
46security breaches or other unlawful use of said customer or consumer data or other information
47by said manufacturer, distributor or third party acting on behalf of same, including, but not
48limited to, judgments, settlements, fines, penalties, expenses related to the disclosure of security
49breaches to customers and consumers, and attorneys’ fees and expenses arising out of
50complaints, claims, demands, security breaches, civil or administrative actions, and, to the fullest
51extent allowable under the law, attorneys’ fees and expenses arising from governmental
52investigations and prosecutions relating to the access, storage, maintenance, use, sharing,
53disclosure, or retention of the dealer’s consumer or customer data or other information, or
54maintenance or services provided to any computer system utilized by the dealer, by the
55manufacturer, distributor or third party acting on behalf of or through the manufacturer or
56distributor.
57 (15) to arbitrarily or unreasonably alter the geographic area of responsibility within which
58it measures the dealer’s performance. A manufacturer or distributor shall give advance notice of 4 of 9
59any proposed alteration of a dealer’s so-called area of responsibility at least 60 days before the
60effective date of a proposed alteration. Notice shall include an explanation of the basis for the
61change, and, upon request by such motor vehicle dealer within 30 days of the manufacturers or
62distributor’s notice, the manufacturer or distributor immediately shall provide sufficient
63supporting documentation. At any time prior to the effective date of such alteration, and after
64completion of any internal appeal process provided by a manufacturer or distributor, a dealer
65may protest the proposed alteration pursuant to section 15. Filing of a protest shall mean no
66alteration is effective until an agreement is reached by the parties, or a court makes a final
67determination. The court may affirm, deny, or modify the proposed alteration of the dealer’s area
68of responsibility, may enter any other orders necessary to ensure that an alteration of the dealer’s
69area of responsibility is reasonable in light of all the relevant circumstances, and may assess the
70attorneys’ fees and expenses among the parties to the protest as appropriate. A manufacturer or
71distributor shall not take any adverse action against a dealer as a result of a change to the dealer’s
72area of responsibility for at least 18 months after the effective date of the change.
73 (16) to require a dealer to purchase goods or services from a vendor selected, identified,
74or designated by a manufacturer or distributor by agreement, program, incentive provision, or
75otherwise in connection with a dealer expanding, constructing, or significantly modifying its
76dealership facility without allowing the dealer the option to obtain a good or service of
77substantially similar quality from a vendor chosen by the dealer and approved by the
78manufacturer, which approval may not be unreasonably withheld. For purposes of this
79subdivision, the term "goods" does not include moveable displays, brochures, and promotional
80materials containing material subject to intellectual property rights of, or parts to be used in
81repairs under warranty obligations of, a manufacturer or a distributor, or special tools and 5 of 9
82training as required by the manufacturer or distributor. Nothing under this paragraph shall be
83construed to (i) allow a dealer or vendor to eliminate or impair a manufacturers or distributor’s
84intellectual property rights, including trademarks, or (ii) permit a dealer to erect or maintain signs
85that do not conform to the intellectual property usage guidelines of the manufacturer.
86 (17) to offer, directly or indirectly, vehicles for lease or subscription in the
87commonwealth of the same line make as any of the vehicles manufactured, assembled or
88distributed by the manufacturer, distributor or franchise representative in the commonwealth and
89sold or leased in the commonwealth by a dealer affiliated with such manufacturer, distributor or
90franchisor representative, unless such lease or subscription is offered through, or in partnership
91with, a dealer of the same line make affiliated with said manufacturer, distributor or franchisor
92representative. For purposes of this paragraph, “subscription” means a contract or arrangement
93whereby a person, for a recurring fee, secures the exclusive use of a specific vehicle of the same
94line make for a term exceeding thirty days. This paragraph shall not apply to a rental company or
95rental agreement regulated pursuant to Section 32E ½ of chapter 90 of the General Laws.
96 (18) to require, attempt to require, coerce, or attempt to coerce a motor vehicle dealer to
97sell exclusively an extended service contract, extended maintenance plan or similar products,
98including, but not limited to, guaranteed automobile protection or guaranteed asset protection
99products, offered, endorsed or sponsored by the motor vehicle manufacturer, distributor or
100franchisor representative by any of the following means: (i) a statement made by the motor
101vehicle manufacturer, distributor or franchisor representative that failure to sell exclusively an
102extended service contract, extended maintenance plan or similar products will substantially and
103adversely impact the dealer; (ii) a provision in a franchise agreement that the dealer sell
104exclusively an extended service contract, extended maintenance plan or similar product offered, 6 of 9
105endorsed or sponsored by the motor vehicle manufacturer, distributor or franchisor
106representative; (iii) measuring the dealer’s performance under the franchise based on the sale of
107extended service contracts, extended maintenance plans or similar products offered, endorsed or
108sponsored by the motor vehicle manufacturer, distributor or franchisor representative; or (iv)
109requiring the dealer to exclusively promote the sale of extended service contracts, extended
110maintenance plans or similar products offered, endorsed or sponsored by the motor vehicle
111manufacturer, distributor or franchisor representative; provided, however, that nothing in this
112paragraph shall prohibit a motor vehicle manufacturer, distributor or franchisor representative
113from providing incentives to a dealer that encourages a voluntary decision to sell exclusively an
114extended service contract, extended maintenance plan or similar product, including, but not
115limited to, guaranteed automobile protection or guaranteed asset protection products offered,
116endorsed or sponsored by the manufacturer, distributor or franchisor; provided, further, that
117nothing in this paragraph shall require or prohibit a motor vehicle manufacturer, distributor, or
118franchisor representative from enforcing a requirement that a dealer provide the following notice
119prior to the sale of the service contract if the service contract is not provided or backed by the
120motor vehicle manufacturer and the vehicle is of the franchised line-make: “The service contract
121you are purchasing is not provided or backed by the manufacturer of the vehicle you are
122purchasing. The manufacturer of this vehicle is not responsible for claims or repairs under this
123service contract.”
124 SECTION 2. Subsection (b) of section 9 of said chapter 93B, as so appearing, is hereby
125amended by inserting after paragraph (4) the following paragraph: -
126 (5)(i) A manufacturer or distributor shall not require, influence, or attempt to influence a
127motor vehicle dealer to implement or change the prices for which it sells parts or labor in retail 7 of 9
128customer repairs. A manufacturer or distributor shall not implement or continue a policy,
129procedure, or program with any of its dealers in this state for compensation under this section
130which is inconsistent with this section.
131 (ii) A manufacturer or distributor shall not, pursuant to a surcharge or other assessment
132stated on the vehicle invoice provided to the dealer or through such other charge or means,
133otherwise recover its costs for reimbursing a dealer for parts and labor pursuant to this section;
134provided, however, that a manufacturer or distributor shall not be prohibited from increasing
135prices for vehicles or parts in the normal course of business.
136 SECTION 3. Said section 9 of said chapter 93B, as so appearing, is hereby further
137amended by inserting after subsection (j) the following subsections (k) and (l): -
138 (k) (1) Notwithstanding any provision of a franchise agreement, it shall be a violation of
139this chapter for a manufacturer, distributor, or franchisor representative, when providing a new
140motor vehicle to a dealer for offer or sale to the public, to fail to provide to such dealer a written
141disclosure that may be provided to a potential buyer of the new motor vehicle of each accessory
142or function of the vehicle that may be initiated, updated, changed, or maintained by the
143manufacturer, distributor, or franchisor representative through over the air or remote means, and
144the charge to the customer at the time of sale for such initiation, update, change or maintenance;
145provided, however, that the manufacturer, distributor, or franchisor representative may comply
146with this subsection by notifying the dealer that any such information is available on a website or
147by other digital means.
148 (2) Notwithstanding any provision of a franchise agreement, it shall be a violation of this
149chapter for a manufacturer, distributor, or franchisor representative to fail to provide reasonable 8 of 9
150compensation to a dealer for assistance requested by a customer whose vehicle was subjected to
151an over the air or remote change, repair, or update to any part, system, accessory, or function by
152the manufacturer, distributor, or franchisor representative and performed at the dealer’s
153dealership in order to satisfy the customer.
154 (l) Notwithstanding any provision of a franchise agreement, it shall be a violation of this
155chapter for a manufacturer, distributor, or franchisor representative to charge back or otherwise
156hold liable a franchised motor vehicle dealer for sales incentives or charges, deny vehicle
157allocation, withhold payments or other things of value for which the dealer is eligible, or take or
158threaten to take any other adverse action against the dealer, in connection with or as a result of
159any new motor vehicle sold by the dealer and subsequently exported from the United States;
160provided, however, that such dealer can demonstrate that after exercising due diligence and
161acting in good faith such dealer did not know nor reasonably should have known of the
162purchaser’s intention to export the motor vehicle. A franchised motor vehicle dealer which
163causes a new motor vehicle to be registered in the commonwealth or in a foreign state and causes
164to be collected the appropriate sales and use tax, or that reasonably relied on a franchisor to
165complete a sale shall be presumed to have exercised due diligence and acted in good faith. Prior
166to taking an adverse action against a dealer, including, but not limited to, a chargeback, as a
167result of an export, a manufacturer or distributor shall provide written notice to the franchised
168motor vehicle dealer of the adverse action, and, if a chargeback, the specific amount of the
169chargeback, and the vehicle or vehicles at issue. A dealer shall not be liable under this subsection
170for the delivery of any vehicle sold through a franchisor’s fleet program where the sale or lease
171was not initiated or negotiated by the dealer and dealer’s function was solely to provide delivery
172on behalf of the manufacturer or distributor. 9 of 9
173 SECTION 4. Section 15 of said chapter 93B, as so appearing, is hereby amended by
174striking out subsection (a) and inserting in place thereof the following subsection: -
175 (a) Any manufacturer, distributor or motor vehicle dealer who alleges an unfair method
176of competition or an unfair or deceptive act or practice as defined by this chapter, any act
177prohibited or declared unlawful by this chapter, or any rule or regulation adopted under this
178chapter, may bring an action in the superior court, or if applicable in the federal district court for
179the district of Massachusetts, for damages and equitable relief, including injunctive relief, as
180described in the following sentence: The party filing suit may obtain such equitable relief if it
181can demonstrate a substantial likelihood that the alleged conduct violates the provisions of this
182chapter.