The Motor Vehicle Franchise Contract Arbitration Fairness Act was NADA's "top legislative priority" from the time it was introduced in a slightly different form in 1999 through its passage in 2002, according to a contemporary article in the American Bar Association's Franchise Law Journal, written by New York attorneys Carl Chiappa and David Stoelting.
"The Act appeared stalled, however, until automobile dealers nationwide, at NADA's urging, began contacting their legislators directly," the article said.
For decades, dealers had sought to counter the money and legal firepower the factories controlled, Huizenga said. "The OEMs could bring a lot of judicial muscle to bear," he said in a phone interview.
To level the playing field, dealers went to state legislatures, in part because federal antitrust laws precluded dealers from collectively bargaining with the automakers, said Andy Koblenz, NADA executive vice president of legal and regulatory affairs.
"State franchise laws came about as a result of overreaches by the manufacturers," he said.
Huizenga said dealers thought they won a big legal victory decades earlier, when NADA helped get the so-called Dealer's Day in Court Act passed. The 1956 law was supposed to protect dealers from what dealers considered arbitrary terminations.
However, the legal standard in the Day in Court act was too imprecise -- the dealer had to prove the factory failed to act in "good faith" when it canceled or failed to renew the dealer's franchise, Huizenga said.
"It was comparable to having to prove they acted with malice," he said. "Bad faith was virtually impossible to prove."