The Automobile Dealer Day in Court Act
A federal law that lets an automobile dealer sue a manufacturer for failing to act in good faith, including in terminating or not renewing the franchise.
The Automobile Dealer Day in Court Act is a federal statute for car dealers. It sits in 15 U.S.C. 1221 and 1222. It is not a general franchise termination law, and it does not help a restaurant or service franchisee. If you are a franchised car, truck or station wagon dealer, it may be relevant to a termination or non-renewal by the manufacturer.
Who it covers
Section 1221 defines an automobile dealer as a business operating under a franchise and engaged in the sale or distribution of passenger cars, trucks or station wagons. The Act applies between dealers and automobile manufacturers. Other kinds of franchise are outside it.
What section 1222 allows
Under section 1222, an automobile dealer may sue the manufacturer in a federal district court and recover damages and costs for the manufacturer's failure "to act in good faith in performing or complying with any of the terms or provisions of the franchise, or in terminating, canceling, or not renewing the franchise with said dealer."
So the Act is framed around good faith, not around a list of permitted termination grounds. That differs from the Petroleum Marketing Practices Act, which lists the grounds on which a motor fuel franchisor may terminate.
What good faith means in the Act
Section 1221(e) defines good faith as the duty of the parties "to act in a fair and equitable manner toward each other so as to guarantee the one party freedom from coercion, intimidation, or threats of coercion or intimidation." That is the statutory definition. How courts have applied it to particular terminations was not researched for this page, so no case outcomes are described.
What this page leaves out
The Act's text on who may sue, where, and for what is in sections 1221 and 1222, and the quotes above come from them. Remedies beyond section 1222 were not read, so nothing is stated about time limits for a suit, defences or other provisions of the Act. Many states also regulate dealer terminations separately; that is outside this page. A lawyer licensed in your state, with experience in dealer matters, can say which laws apply and read the manufacturer's notice against them. If you hold a dealer agreement with a manufacturer, collect the agreement, every amendment and every letter from the manufacturer before that conversation; the documents to gather page has a fuller list.
For the wider picture, see the FTC Franchise Rule and termination, which explains that the federal disclosure rule does not itself restrict termination, and state franchise relationship laws. If you want to know whether a franchisor can end an agreement in general, read can a franchisor terminate my franchise. Your notice and your dealer agreement control your own dates.