Dealers Prevail in OEM Attempt to Delay Time Guide Litigation

BSM is representing ten (10) New York Volkswagen and Audi dealers in a challenge to Volkswagen of America’s refusal to properly reimburse dealers for warranty labor time.  New York law requires an OEM to reimburse dealers for time spent on a warranty repair consistent with the independent third-party time guide used by the dealership.  

New York law further provides that a claim that an OEM has violated the state motor vehicle franchise laws can be brought before an Administrative Law Judge appointed by the Commissioner of Motor Vehicles.  The challenge to VWoA’s failure to abide by the New York time guide provision was filed with the Commissioner of Motor Vehicles.  However, instead of providing a substantive response to the complaint, VWoA sought to have the case removed to federal court which would increase the cost of the case and delay the outcome.  

After briefing the issue, the federal court judge recently ruled in favor of the dealers and agreed that the case should be heard by the Administrative Law Judge.  The case will now proceed to a final hearing which will be scheduled over the next few weeks.