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VIDEON CHEVROLET, INC. v. GMC

July 30, 1992

VIDEON CHEVROLET, INC., Plaintiff,
v.
GENERAL MOTORS CORPORATION, Defendant.



The opinion of the court was delivered by: BY THE COURT; JOSEPH L. MCGLYNN, JR.

 In this diversity action, plaintiff Videon Chevrolet, Inc. alleges that defendant General Motors Corporation has violated section 9(a)(3) of the Pennsylvania Board of Vehicles Act, Pa. Stat. Ann. tit. 63, § 818.9(a)(3) (Supp. 1992). Plaintiff seeks damages and injunctive relief pursuant to section 818.20 of the same title. Id. § 818.20 (Supp. 1992). Defendant now moves for summary judgment. For the reasons which follow, defendant's motion will be GRANTED.

 I. FACTUAL BACKGROUND

 Plaintiff Videon Chevrolet, Inc., ("Videon") a Pennsylvania corporation, is a franchised automotive dealer of Chevrolet and GEO vehicles manufactured by defendant General Motors. ("GM"). In September 1988, defendant developed a nationwide program to increase its declining market share for Chevrolet. The program, called the Chevrolet Dealer Association Marketing Initiative ("Initiative"), implements what defendant contends is a one percent (1%) price increase on new motor vehicles sold to Chevrolet dealers like plaintiff, the revenues derived therefrom to be used by defendant to provide financial support for local Chevrolet advertising. By increasing its advertising dollars in a relevant geographic market, defendant hoped to increase its "share of voice" in the marketplace. *fn1" GM raised the revenue for the increased advertising by raising the dealer price of certain motor vehicles by 1% of the manufacturer's suggested retail price. Most of the additional revenues generated are allocated to organized dealer associations for their own advertising. Chevrolet purchases additional advertising in various locales to benefit dealers who are not members of an association. GM alleges that all dealers, whether members of an association or not, benefit from the Initiative and all are eligible to receive up to 25% of the 1% increase on vehicles sold to them for their own advertising efforts. (Def.'s Mot. for Summ. J. at 8).

 The gravamen of plaintiff's complaint is that the Initiative violates section 9(a)(3) of the Pennsylvania Board of Vehicles Act, Pa. Stat. Ann. tit. 63, § 818.9(a)(3) (Supp. 1992). *fn2" It contends that the 1% increase is not a price increase but a masked attempt to force dealers to participate monetarily in an advertising campaign. Plaintiff asserts that the Initiative revenues generated by GM are not included in its "gross receipts or gross revenue tax returns filed anywhere throughout the United States" thereby refuting GM's argument that the increase is one of price. (Pl.'s Mem. in Opp'n to Def.'s Mot. for Summ. J. at 4-5).

 It was the contention of the Commonwealth that GM's separate itemization of the 1% increase on the invoice was in violation of § 9(a)(3). Defendant therefore agreed as of March 1, 1992, to no longer itemize separately the 1% marketing adjustment on all Pennsylvania Chevrolet dealer invoices as it had since the inception of the Initiative. On August 8, 1991, the Commonwealth moved to withdraw the order to show cause. The motion was granted on October 25, 1991. (Def.'s Mot. for Summ. J., Ex. C & D). By including the 1% increase in the price to the dealer, GM asserts it is within the bounds of the Dealer Sales & Service Agreement 1.1.3. The Agreement states: "prices, destination charges and other terms of sale applicable to any Motor Vehicle may be changed at any time." (Def.'s Mot. for Summ. J., Ex. 4).

 The present action was filed in accordance with Pa. Stat. Ann. tit. 63, § 818.20 (Supp. 1992). *fn3"

 II. LEGAL STANDARDS

 A. Motion for Summary Judgment

 Under Federal Rule of Civil Procedure 56(c), the court must enter summary judgment where the record reveals no genuine issue of material fact and the movant is entitled to judgment as a matter of law. See San Filippo v. Bongiovanni, 961 F.2d 1125, 1133 (3d Cir. 1992). If not bearing the burden of proof at trial, the party moving for summary judgment need not negate the other party's case. The moving party may discharge its burden by demonstrating that an essential element of the opponent's case is absent. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 The issue sub judice is whether GM's implementation of the Marketing Initiative violates the Pennsylvania statute. The inferences drawn from the underlying facts are viewed in the light most favorable to the nonmovant. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986); see Anderson v. Liberty Lobby, 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Tigg Corp. v. Dow Corning Corp., 822 F.2d 358, 361 (3d Cir. 1987).

 Plaintiff vigorously opposes defendant's Motion on the ground that there exists a factual issue to be resolved by a trier of fact: whether defendant's 1% marketing adjustment is a price increase or an illegal, coercive advertising assessment in violation of the statute. However, there is no dispute as to the historical facts. The focus is on the legal significance of those undisputed facts. Summary judgment, ...


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