Chrysler sues 4 states over dealer laws

[RAM MAN]

Legal changes interfere with closings, violate bankruptcy code, Constitution, carmaker says

Bloomberg News

Chrysler LLC sued the Oregon Attorney General and officials in Maine, North Carolina and Illinois, saying recent changes to those states' dealerlaws violate the bankruptcy code and the U.S. Constitution.

Chrysler says the new laws interfere with the car company's rejection of 789 dealers as part of its sale to Italy's Fiat SpA.

The lawsuit was filed in Manhattan bankruptcy court by reorganized Chrysler as well as its bankrupt estate.

It seeks a court order declaring the laws unconstitutional and in conflict with a bankruptcy judges orders.

"The laws unduly burden New Chrysler with the obligation to provide the rejected dealers with rights that this court determined that the rejected dealers do not have," lawyers for Chrysler wrote.

The four states would have power under the new laws to block new Chrysler from granting a franchise to a new dealer in that state or relocate a dealer into a rejected dealers market, lawyers for Chrysler wrote.

U.S. Bankruptcy Judge Arthur Gonzalez approved Chrysler's plan to reject 789 dealer agreements before most of the Auburn Hills-based company's assets were sold in June to a group led by Fiat, creating the world's sixth-largest automaker.

The suit names eight defendants, including Oregon Attorney General John Kroger, the secretaries of state in Maine and Illinois, and transportation officials in all four states.

Chrysler has also faced at least four lawsuits in state courts related to the rejections, from Boucher Imports Inc. in Wisconsin, Crain CDJ in Arkansas, Spitzer Autoworld Sheffield LLC in Ohio and Sun Country Chrysler Inc. in Utah.

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