When is a tractor like a car or a pickup? (UPDATED)
on Mar 3, 2016 at 6:56 pm
UPDATE Friday 4:05 p.m. Justice Breyer on Friday denied the companies’ request to block the New Hampshire law regulating motor vehicle dealers as it applied to makers of farm and construction equipment. The Justice acted without asking the state for a response to the application, thus hinting that he saw little merit in it
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Arguing that tractors, earth movers, and harvesters are not sold the same way as cars and pickups, three of the largest farm and construction equipment companies asked the Supreme Court on Thursday to stop the state of New Hampshire from treating them the same way as auto dealers in their sales. In a rather rare case claiming interference with contract rights protected by the Constitution, the three big companies contended that the new state law nullified nearly all of the terms of the pacts they now have with their dealer outlets.
The application (Deere & Co. v. New Hampshire, 15A910) was filed with Justice Stephen G. Breyer, who handles emergency legal matters from the geographic area that is the First Circuit, which includes New Hampshire. He has the option of acting alone or sharing the issue with his colleagues — the more common practice.
The three companies sell well-known equipment in farm country and to construction companies across the nation — Deere & Co. does so under the John Deere trade name, CNH America sells under the Case and New Holland brands, and AGCO Corp. sells under one of the oldest brands known in agriculture — Massey Ferguson – among several others. The shares of each company are traded on the New York Stock Exchange.
Their legal protest is over a New Hampshire law that repealed an earlier law written especially to regulate the way such companies sell, dealing with distributors, and replaced it with a requirement that requires those firms to operate under the state’s Automobile Dealer Bill of Rights. It did so, the application said, by expanding the definition of “motor vehicle” to reach farm and construction machinery.
Under this change, the companies asserted, the law treats any written or oral agreement now existing between an equipment maker and a dealer “void as against public policy.” The application had the effect of nullifying “nearly every material provision of their existing contracts.” The New Hampshire Supreme Court upheld the law, the companies complained, using a lenient standard of review that makes the federal Contract Clause “a nullity.”
Under the Constitution’s Article I, Section 10, the state governments are forbidden from passing any law “impairing the obligation of contracts.” New Hampshire, the equipment companies argued, has done just that, on a theory that it is using state powers only to “level the playing field” among those selling vehicles in the state.
The law, the application said, is nothing more than “special-interest legislation” designed to protect auto dealers. “Cases from every level of our federal court system, from this Court on down, instruct that special-interest laws designed to protect certain entities’ private business interests possess no significant and legitimate public purpose sufficient to survive federal Contract Clause scrutiny,” the companies said.
Justice Breyer is expected to seek a response from the state before he or the full Court acts on this dispute.
