August 27, 2019
Glaser Weil is pleased to announce that its client the California New Car Dealers Association (CNCDA) achieved an important milestone in CNCDA’s request for an investigation into Volvo’s subscription program known as Care by Volvo (CbV).
On behalf of CNCDA, which represents more than 1,200 new car dealerships in California, the firm filed a petition earlier this year with the California New Motor Vehicle Board (NMVB) alleging that Volvo’s CbV program is violating California law by competing directly with Volvo dealers and several other violations of the California Vehicle Code.
Described as “Volvo’s all-inclusive subscription service,” CbV allows consumers to sign up for the program and make a deposit directly to Volvo through Volvo’s website. CNCDA’s petition alleges that the program offers the same product as its dealers yet undercuts the dealerships on price. Additionally, the petition alleges that CbV illegally modifies dealer franchise agreements by not providing notice or an opportunity for dealers to protest to the NMVB.
In an unanimous 5-0 decision, the public members of the NMVB found that there is a sufficient basis to refer CNCDA’s petition to the California DMV for investigation. The investigation will review each of the four violations of California Vehicle Code alleged in CNCDA’s petition. According to the NMVB order, the DMV is requested to assign an investigator and issue a written report on the results within 180 days.
The Glaser Weil team is led by Litigation Partner Michael Cypers, an experienced trial lawyer who focuses on complex financial cases, including civil securities, corporate, partnership, financing, and fiduciary duty. Mr. Cypers has previously represented CNCDA in a civil lawsuit against TrueCar. The successful outcome of the previous matter resulted in TrueCar adopting a new billing model in California.
Litigation Partner Julie R. F. Gerchik assisted with the matter – her experience includes handling all types of complex commercial matters including financial institution matters, securities litigation and regulatory matters. Litigation Associate Cynthia E. Organ rounds out the team – she has represented clients in state and federal litigation and arbitration in a wide variety of matters, including breach of contract, breach of fiduciary duty, trade secret, labor and employment, products liability, probate, and real estate actions.
“Transactions that are designed to disrupt the existing order are fine--as long as they follow the law. We allege in the Petition that Care By Volvo fails to comply with multiple aspects of governing California law. Volvo argued vehemently that Care By Volvo does not violate the law and that the petition should be dismissed. We are gratified that, after a two hour plus hearing including public testimony, the Board voted 5-0 to refer all four of the claims to the DMV for investigation,” said Michael Cypers.