GM dealership filed the first lawsuit seeking to overturn an arbitration decision

Article by Christian A., on August 27, 2010

Rally Auto Group of Palmdale, Calif., has filed a lawsuit that aims to overturn an arbitration decision -- the first General Motors Co. dealership to do so. The suit claims that the arbitrator exceeded his authority in taking away the franchise for one of his four GM brands and awarding it to a rival's store.

In this petition filed in federal court in Los Angeles, the arbitrator stated that Rally is allowed to still sell Buick, Cadillac and GMC vehicles but had to give up a Chevrolet franchise.

The arbitrator also said, in its June ruling, that Rally has to give the Chevrolet franchise to a terminated Saturn store nearby.

Rally argues that the arbitrator exceeded his authority in deciding on individual brands rather than on the entire dealership. Rally also takes offense at the arbitrator's decision to give the brand to another store.

The petition alleged that under the federal law enacted in December, the arbitrator is limited to deciding whether or not the dealership as a whole should be reinstated. Rally believes that as the covered dealership, it "should have been reinstated for all GM brands, including Chevrolet."

Court documents reveal that Larry Mayle has owned Rally for 20 years. Christopher DeVito, one of Rally's lawyers, said that GM was named as the defendant for procedural reasons. GM has yet to comment on the suit. [via autonews]

Topics: gm, dealer

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