Senators want public to help pay for legal battle between car dealers and makers

The dispute is over a 2008 Florida law which allows dealers to charge a higher retail rate for repairs in warranty and recall work.

04/18/2014 7:39 PM

04/18/2014 8:11 PM

Taxpayers may help foot the bill for a bitter legal battle between a consortium of the nation’s largest auto manufacturers and Florida’s local car dealerships.

The dispute is over a 2008 Florida law which allows dealers to charge a higher retail rate for repairs in warranty and recall work. The Alliance of Automobile Manufacturers argues the law steers undue profits to local dealerships at the expense of car producers and consumers. The group is trying to overturn the law in federal court.

Although the lawsuit initially named the state as the defendant, the Florida Automobile Dealers Association intervened in 2009 and took the lead in defending the law as necessary to help dealers negotiate fair prices from car makers like Ford, General Motors, Chrysler, Toyota, and BMW.

Now state lawmakers want taxpayers to cover part of the tab. In its proposed budget for next year, the Florida Senate seeks to spend $750,000 for “litigation expenditures” on the case.

If approved, it would be a small slice of the state’s $75-billion spending plan, but questions surrounding the line item underscore how murky the budget process can be.

“It’s using public resources to defend legislation that protects car dealer profits,” said Dan Gage, spokesman for the Alliance of Automobile Manufacturers in Washington, D.C.

Neither the legislators supporting the expenditure nor representatives of the car dealers would answer questions from the Times/Herald about the fees.

The state is being represented in the case — which likely won’t be resolved until at least next year — by the attorney general’s office, which did not request the money, said spokeswoman Jenn Meale.

Florida’s Department of Highway Safety and Motor Vehicles Department, which is named along with the auto dealers as a defendant in the lawsuit, didn’t ask for the money either, said agency spokesman John Lucas.

Incoming Senate President Andy Gardiner, R-Orlando, filed an amendment last month to have the public pay the fees. During a March 27 Senate Appropriations meeting, Gardiner barely described his amendment, which was approved unanimously without discussion.

Gardiner didn’t return phone calls Thursday and Friday. In a Friday e-mail, the spokeswoman for Senate President Don Gaetz, R-Niceville, said Gardiner couldn’t be reached because of the Good Friday holiday.

“He asked me to follow up on his behalf,” said spokeswoman Katie Betta. “This funding would enable the state to have resources to defend itself in this litigation.”

Betta wrote that the Senate often makes requests that aren’t made by state agencies.

After the Times/Herald made a fourth request for documents to explain exactly what the money was for, Betta provided a one-page memo.

The 2008 law maintains competition, between whom the memo didn’t say, while “providing consumer protection and fair trade and providing minorities with opportunities for full participation as motor vehicle dealers.”

But no author is listed on the memo, and Betta didn’t reply when asked twice who wrote it. Aside from an email from a Senate legislative staffer describing the bill and the lawsuit, no other information justifying the expense was disclosed.

Gaetz didn’t respond to questions about the money or whether it was requested on behalf of the car dealers, who are represented by Gray Robinson, a politically connected Tallahassee firm, and Bressler Amery & Ross, a New Jersey firm.

The chairman of the Florida Automobile Dealers Association is Bob Lee. For years Lee has contributed to the campaigns of his hometown lawmakers — Sen. Gaetz and Rep. Matt Gaetz, R-Fort Walton Beach. Lee is the father-in-law of Okaloosa County Sheriff Larry Ashley, a key Gaetz political ally.

Lee did not return phone calls asking about the request. Association president Ted Smith initially said he couldn’t talk because he was on an elevator. Asked if the association asked Gaetz to include the fees so it could cover its legal bills, Smith replied he couldn’t talk because he was having hip surgery and hung up the phone.

Calls to Gray Robinson weren’t returned. Eric Chase, an attorney for Bressler Amery & Ross, said he couldn’t talk without permission from the association.

The line-item’s future is not clear, because it does not exist in the House budget. Still, it could be added when the two chambers haggle next week over the budget, which lawmakers will vote on May 2 before it goes to Gov. Rick Scott.

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