Legal Memorandum: ADDCA Claims in VI

Issue: Under the law of the Virgin Islands, what must a plaintiff establish to prevail on a claim brought under the Automobile Dealer’s Day in Court Act (ADDCA)?

Area of Law: Business Organizations & Contracts, Litigation & Procedure
Keywords: Automobile Dealer's Day in Court Act (ADDCA); Automobile dealer; Automobile manufacturer
Jurisdiction: Federal, Virgin Islands
Cited Cases: 227 F.3d 78; 389 U.S. 832; 37 F.3d 908; 781 F.2d 1520; 567 F.2d 901; 375 F.2d 932; 434 F.2d 556; 517 F.2d 567
Cited Statutes: 15 U.S.C. § 1222; 15 U.S.C. § 1221(e)
Date: 04/01/2015

The Automobile Dealer’s Day in Court Act (ADDCA) authorizes an automobile dealer to bring suit against an automobile manufacturer engaged in commerce, where the manufacturer resides, is found or has an agent, regardless of the amount in controversy.  15 U.S.C. § 1222.  The dealer “shall recover the damages” it sustained and “the cost of the suit by reason of the failure” of the manufacturer “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: Provided, That in any such suit the manufacturer shall not be barred from asserting in defense of any such action the failure of the dealer to act in good faith.”  Id.  “The ADDCA is a remedial statute enacted to redress the economic imbalance and unequal bargaining power between large automobile manufacturers and local dealerships, protecting dealers from unfair termination and other retaliatory and coercive practices.”  Northview Motors, Inc. v. Chrysler Motors Corp., 227 F.3d 78, 92 (3d Cir. 2000) (citing Maschio v. Prestige Motors, 37 F.3d 908, 910 (3d Cir. 1994)).  Congress intended to counter-balance the leverage manufacturers hold over ostensibly independent dealers.  Id. at 92-93 (quoting H.R. Rep. No. 2850, 84th Cong., 2d Sess. 1, 3 (1956)). 

The ADDCA has four elements for a cause of action: “(1) the plaintiff must be an automobile dealer; (2) the defendant must be an ‘automobile manufacturer’ engaged in commerce; […]

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