“Harley-Davidson’s Harley-Davidson Fleet Sales Policy…prohibits generally sales to rental operators unless they are bona fide and previously authorized or specifically approved, and also unless the motorcycle is supplied to the dealer from the Rentals Fleet Pool and is properly set up, inspected, tested, sold and delivered directly at the dealership facility,” the termination letter stated.
Laidlaw’s countered that the fleet sales policy and NRSP are not part of the dealer agreement.
“The non-retail sales policy does not amend or modify the dealer agreement nor are its specific terms incorporated into the dealer agreement,” the protest stated. “However, the dealer agreement does provide that dealers shall comply with the policies and position statements issued by [Harley-Davidson] regarding the requirement that sales not be “for resale.”
Attorneys for the dealer argued that Harley-Davidson revises the policies frequently – almost annually -- without seeking dealers’ agreement, and that less severe sanctions, such as limiting shipments, had been levied on other dealers before the Motor Co. sought termination in those cases.
Laidlaw attorneys argued that the same consequences Harley-Davidson feared – the lack of a custom fit when the bike is delivered, possible disassembly for overseas shipping to reduce taxes, and that shipping vehicles out of state complicates Harley’s allocation system – could all come about from used motorcycle sales, which the NRSP does not cover.
The bottom line, attorneys argued, was that Harley-Davidson did not suffer any loss or injury as a result of Laidlaw’s conduct, and that Laidlaw’s had offered reimbursement if the company could show it had.
Finally, they argued that Laidlaw’s hired an independent auditing and compliance company in May 2011 to train staff and monitor compliance with the NRSP.
In the end, Judge Merilyn Wong took the middle road, ordering that the dealership remain open under Laidlaw management with periodic training and audit results to be turned over to Harley-Davidson, which Laidlaw's said it had suggested.