Riley Prevails Against New Car Dealership Protest Actions in Texas

Riley Prevails Against New Car Dealership Protest Actions in Texas

Francis "Trip" Riley, a partner in Saul Ewing Arnstein & Lehr's Litigation Department, successfully represented long-standing clients Michael Saporito and Jessie Armstead, owners and operators of several automobile dealerships, in prevailing against four existing auto dealers who filed administrative protest actions by which they sought to prevent the Texas Department of Motor Vehicles (DMV) from granting the clients' application for a new Honda dealership in Grapevine, Texas.

After individual mandatory mediations of each protest, two of the four protesting dealerships voluntarily dismissed their protests. The two remaining dealerships refused to dismiss their protest actions and the matters were consolidated by the Texas State Office of Administrative Hearings (SOAH). Due to the protestants' refusal to produce a large amount of the discovery that had been demanded, a motion to strike objections, two motions to compel production of documents and a motion to compel the deposition of corporate designees relative to their discover efforts were filed on behalf of the clients; all of the motions were granted. After four months of discovery and various other discovery motions, one of the two remaining protesting dealerships agreed to a reasonable settlement (primarily addressed by American Honda) and withdrew its protest. After approximately 10 depositions of employees of the final protestant's dealerships, it became clear that the protestant had actually not undertaken the discovery investigation and document location and production required by our discovery request (to which all objections had been overruled), and thus was facing sanctions pursuant to yet another motion for sanctions that had been filed even before learning of the specific discovery failures coming to light at these depositions. Faced with this motion, additional discovery demands resulting from deposition testimony, and the looming depositions of executives and corporate designees, the final dealership withdrew its protest with prejudice.

Our clients are now clear to obtain the necessary state DMV license and local planning board approvals for the construction and operation of their Honda dealership.