A trade association and several individual lawn and garden and ag equipment manufacturers are challenging a North Dakota dealer protection law passed earlier this year.
The Association of Equipment Manufacturers, along with Agco, CNH Industrial, Deere and Kubota have filed suit to block a North Dakota dealer protection law, the Farm Equipment Dealer Bill of Rights, that was scheduled to take effect on Aug. 1.
The legislation addresses several OEM contract issues and was sponsored and supported by the North Dakota Implement Dealers Association. Areas covered included the prohibition of mandatory equipment and parts purchases, minimum order requirements, and “purity” requirements stipulating the separation of facilities/personnel/display space/etc. It also addressed the requirement that manufacturers reimburse dealers for warranty parts, labor and transportation at the respective dealer’s non-warranty customer pay rate.
Other issues addressed by SB 2289 include prohibitions regarding dealership terminations, transparent and reasonable performance requirements, limitations regarding warranty and incentive payment chargebacks, and the establishment of a fair process through which dealers may transfer or sell their dealership.
The OEMs claim that the law “creates arguably the most restrictive dealership law in the entire country” and restricts ability of farm equipment manufacturers to enforce new and existing contracts with dealers, maintain their trademark rights, enforce dealership appearance and performance standards, plus the ability to monitor or prevent warranty and incentive payment fraud.”