As posted to CBT News on 7/25/25

(Click Image to View Clip – Run Time: 18 min, 07 sec)

A recent letter from the Alliance for Automotive Innovation to the U.S. Department of Justice (DOJ) has sparked a firestorm in the automotive retail world. The letter, urging the DOJ to scrutinize state dealership, franchise, and warranty laws, has been called a “declaration of war” by dealers. To dive into the implications, Jim Fitzpatrick spoke with Len Bellavia, Esq., founding partner at DealerLaw.com, on the latest episode of CBT Now.

A Misguided Move by Automakers

Bellavia didn’t mince words, calling the Alliance’s letter both inflammatory and strategically flawed. He pointed out that the letter misuses an executive order signed by President Trump, originally intended to support small business startups, to challenge decades-old state franchise protections. This move, he argues, is a direct attack on the safeguards that ensure dealers’ viability.

The Battle Over Market Protections

At the heart of the Alliance’s push is a call to eliminate revealable market area protections—laws that prevent manufacturers from opening new dealerships too close to existing ones. These protections, common across franchise industries, are critical for safeguarding dealer investments. Bellavia warns that dismantling them could allow manufacturers to oversaturate markets, effectively pushing dealers out of business.

He sees this as a potential stepping stone to a bigger goal: direct-to-consumer sales. By weakening dealer protections, manufacturers may be laying the groundwork for new, potentially monopolistic sales models, using the letter as both a legal and PR maneuver.

Dealers Fight Back

Despite the threat, Bellavia remains confident in the dealer community’s response. He commended the National Automobile Dealer Association (NADA) for its thorough rebuttal and urged dealers to read the Alliance’s letter to grasp the stakes. Bellavia believes the controversy could ultimately strengthen dealers’ resolve and position.

The letter might even become a legal weapon for dealers. Bellavia suggests it could help them push back against burdensome manufacturer mandates, like costly facility upgrades, forced inventory acceptance, or unfair warranty compensation practices.

Legal and Legislative Hurdles

The Alliance faces significant obstacles. Bellavia noted that the Supremacy Clause allows federal law to override state law, but no federal legislation currently governs dealer franchise frameworks. For 70–80 years, bipartisan state laws have built these protections, and manufacturers have consistently failed to dismantle them.

What’s Next?

Bellavia predicts internal fallout for the Alliance, as its aggressive stance may create rifts among its members. Meanwhile, dealers are rallying, armed with legal arguments and a renewed sense of purpose. This clash could reshape manufacturer-dealer relationships for years to come.

(This is Blog Post #1800)

Leonard Bellavia is Founding Partner of the law firm of Bellavia Blatt, PC,  Len has spent his life in the automotive industry, having represented thousands of dealerships across the country. He has also commenced mass legal action on behalf of hundreds of franchise dealers in the United States District Courts against Daimler Chrysler, Ford, GM, Snap-On Tools, and the Tribune Company.

CBT News is a leading multimedia platform dedicated to the automotive retail industry, offering daily newscasts, in-depth interviews with industry leaders, and exclusive content to help dealership professionals stay informed and improve their business operations.

Jaelyn Campbell is a staff writer/reporter for CBT News. She is known to cover the latest developments impacting automotive retailers, manufacturers, and industry professionals.