Super-Size That Lawyer
By Lorelei Laird Ward's Dealer Business, Feb 1, 2006 12:00 PM

Attorneys Wayne Mack and Manly Parks laugh when asked if they are giant-killers. Not exactly the self-image for the partners at Duane Morris, one of the country's largest law firms.

But Mack and Parks are trailblazers, leading their firm's efforts to increase its legal work among dealership clientele.

In most dealer-vs.-manufacturer lawsuits, the factories have been represented by titans of the legal profession. On the dealers' side tend to be small, local law firms. Mack, Parks and their dealer-services group at Philadelphia-based Duane Morris are breaking the mold.

That's how they ended up representing a Mitsubishi dealer from Vineland, N.J. The former owner of Vineland Mitsubishi says the North American and Japanese parent companies overstated the potential profit to be made by a dealership, then forced him into insolvency by mandating a bad marketing program, forcing the dealership to buy unwanted cars and requiring it to move to an expensive new location that now sits empty.

Other Mitsubishi dealers may be piling on with similar claims.

“Our phone has been ringing regularly with Mitsubishi dealers that are calling with the same story,” Mack says.

He says the growing size and sophistication of car dealerships make them attractive clients to his firm.

“Dealers were becoming larger and more substantial — the typical dealer owns several dealerships,” says Mack. “We now have in the United States a number of car dealerships that are publicly traded corporations, so there are big companies out there that own car or truck dealerships.”

Duane Morris weighed in on the dealers' side in the 1990s, representing several dealers in a class-action case alleging racketeering and corruption by Honda executives.

The case was a natural outgrowth of Mack's and Parks' practice in franchise law, which focused in particular on automotive-related clients such as franchisees of AAMCO Transmissions Inc. and Meineke Discount Muffler Shops Inc. Through that work and the Honda litigation, Parks says he and Mack got more inquiries from dealers, “and that caused us to look at the situation more carefully.”

Since then, Duane Morris has staked out a niche as the only big law firm Mack knows of that provides a full range of legal services to dealers. “The practice has really taken off in the last three or four years,” he says.

The dealer-services group's highest-profile work still is litigation. It's keeping them busy. Parks estimates the Mitsubishi suit could be in court for years.

Mack recently submitted a brief on behalf of heavy-equipment dealers to the U.S. Supreme Court in Volvo Trucks North America, Inc. versus Reeder-Simco GMC Inc., accusing Volvo of discriminatory pricing.

In related work against engine manufacturer Detroit Diesel Corp., Mack and Parks filed a federal suit on behalf of hundreds of International and Volvo Truck dealers. The class action alleges that Detroit Diesel and 17 of its distributors violated federal antitrust law, driving up engine and parts prices for the dealers.

In similar suits, three truck dealers allege that Mack Trucks Inc. undermined their business and violated state law by selling directly to the dealerships' potential customers and failing to reimburse them for repairs.

If the growth in this kind legal representation reflects auto-industry trends, Mack says perhaps it's the consolidation and resulting growth in business savvy among car and truck dealers in a highly competitive business.

He says that many dealerships have “gotten to the point where they're much more sophisticated than they were 20 or 30 years ago,” he says.