In Re Detroit Auto Dealers Association, Inc. Thompson-Chrysler-Plymouth, Inc. Joseph P. Thompson Crestwood Dodge, Inc. Bob Borst Lincoln-Mercury Sales, Inc., Robert C. Borst Bob Dusseau Lincoln-Mercury Robert F. Dusseau Bob Maxey Lincoln-Mercury Sales, Inc. Robert Maxey Crest Lincoln-Mercury Sales, Inc. William R. Ritchie Stewart Chevrolet, Inc. Gordon Stewart Woody Pontiac Sales, Inc. Woodrow W. Woody Jack Demmer Ford Jack E. Demmer Al Long Ford, Inc. Ed Schmid Ford, Inc. Edward Schmid Ray Whitfield Ford, Inc. Ray Whitfield v. Federal Trade Commission
Docket: 95-3932
Court: Court of Appeals for the Sixth Circuit; May 24, 1996; Federal Appellate Court
In re Detroit Auto Dealers Association involves a legal dispute stemming from an agreement among numerous automobile dealerships in Detroit to close their showrooms on Saturdays and reduce operating hours, initially made in response to employee demands and union organization efforts. In 1984, the Federal Trade Commission (FTC) filed a complaint against these dealerships, claiming the agreement violated Section 5 of the Federal Trade Commission Act. An Administrative Law Judge dismissed the complaint, citing a nonstatutory labor exemption. However, the FTC reversed this decision, issuing a remedial order that mandated the dealerships to operate a minimum of sixty-four hours per week and prohibited discussions about showroom hours among members. The court upheld the FTC's order but remanded the case for further consideration of potential exemptions for individual dealers based on collective bargaining or union-related coercion. Following the court's ruling, the FTC reaffirmed its order on June 20, 1995. As a result, only eleven dealerships and nine individuals remained in the appeal process after many reached consent decrees with the FTC.
Remaining dealers argue that they were coerced by union violence into reducing their operating hours, necessitating the application of the nonstatutory labor exemption by the Commission. The principle that equitable remedies should be enforced only as long as necessary is well-established in common law, allowing courts to modify or terminate injunctions as circumstances evolve. In Sweeton v. Brown, it was emphasized that injunctions are powerful tools that should be dissolved when they no longer serve equity. Changes in law or facts since the injunction was imposed may justify such modifications, as noted in Rufo v. Inmates of the Suffolk County Jail, which acknowledged that both legal and factual changes can render compliance with an injunction burdensome.
Significant developments over the past twelve years since the Commission’s complaint indicate that a modification is warranted. Most dealers have extended their hours, and the previous climate of violence that pressured dealers to limit their hours has dissipated. Counsel for the petitioners confirmed there is no current agreement dictating dealership hours in Detroit. The text underscores that if the case were reviewed today, the prior injunction would not be applicable. Consequently, the case is REMANDED to the Commission for a hearing aimed at modifying the existing remedial order, allowing all parties to present relevant evidence regarding the current conditions in the Detroit automobile market. Additionally, while Thompson Chrysler-Plymouth, Inc. and Joseph P. Thompson were initially respondents, the Commission stated they are no longer part of the proceedings. The original case involved about 90 dealerships, 18 dealer associations, and 78 individual owners or operators.
