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Hyundia Motor America v. Tennessee Motor Vehicle Commission

Court of Appeals of Tennessee, Nashville

December 30, 2016

HYUNDAI MOTOR AMERICA
v.
TENNESSEE MOTOR VEHICLE COMMISSION, ET AL.

          Session, May 3, 2016

         Appeal from the Chancery Court for Davidson County No. 15441III Ellen H. Lyle, Chancellor

         This appeal arises from a proceeding initiated by two automobile dealers who challenged the location of a proposed dealership in a contested case proceeding before the Tennessee Motor Vehicle Commission (the "Commission"); the manufacturer contended that the dealers were not located in the "relevant market area, " as required by statute and moved to dismiss the proceeding for lack of standing. The administrative law judge overruled the manufacturer's motion, and the manufacturer filed a petition in Chancery Court seeking interlocutory review. The trial court dismissed the petition, holding that the court lacked jurisdiction to review the administrative judge's ruling on the motion. The motor vehicle manufacturer appeals the dismissal of its petition for judicial review of the denial of its motion to dismiss the contested case proceeding. Concluding that the manufacturer did not meet the threshold requirement for immediate judicial review as set forth in the Administrative Procedures Act, we affirm the judgment of the trial court.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

          Jon D. Ross and Gerald D. Neenan, Nashville, Tennessee, for the appellant, Hyundai Motor America.

          Herbert H. Slatery, III, Attorney General and Reporter; Andrée Sophia Blumstein, Solicitor General; and Mary Ellen Knack, Senior Counsel, for the appellee, Tennessee Motor Vehicle Commission.

          James W. Cameron, III, and Patrick W. Merkel, Brentwood, Tennessee, for the appellees, Grayson Hyundai, LLC and Twin City Hyundai, Inc.

          Richard H. Dinkins, J., delivered the opinion of the court, in which Frank G. Clement, Jr., P.J., M.S., and Thomas R. Frierson, II, J., joined.

          OPINION

          RICHARD H. DINKINS, JUDGE

         I. Factual and Procedural History

         Hyundai Motor America ("Hyundai") is a manufacturer and distributor of Hyundai motor vehicles. On June 2, 2014, Hyundai sent written notice to Grayson Hyundai, LLC and Twin City Hyundai, Inc., Hyundai dealers in the Knoxville, Tennessee area, of its intent to appoint a new dealership in that area. The letter read, in pertinent part, as follows:

In accordance with the provisions of Tenn. Code Ann. 55-17-114(c) 20, this letter shall serve as formal notice of Hyundai Motor America's intent to appoint a new dealer in the North Knoxville, TN market area. The new dealership facilities shall be located on adjacent parcels planned to be combined and located at 505, 509, and 513 Callahan Dr. NW, Knoxville, TN 37912.

         On June 27, 2014, Grayson and Twin City filed a notice of protest with the Tennessee Motor Vehicle Commission (the "Commission") pursuant to Tennessee Code Annotated section 55-17-114(c)(20), objecting to the appointment of the new Hyundai dealer and requesting that the Commission deny Hyundai's appointment and location of the new dealer.[1] On August 21, 2014, based on Grayson's and Twin City's notice of protest, the Commission issued a Notice of Contested Case Hearing stating, inter alia, that a hearing would be conducted in accordance with the Uniform Administrative Procedures Act.[2]

         Hyundai filed a motion to dismiss the proceeding on February 3, 2015, asserting that the petition failed to state acts or omissions upon which the Commission could proceed and that the Commission did not have jurisdiction to conduct a contested case proceeding because the dealers did not have standing to pursue the protest because they are not in the "relevant market area" as required by Tennessee Code Annotated section 55-17-114(c)(20). An administrative law judge entered an order on April 8, 2015, denying the motion.

         Hyundai filed a Petition for Judicial Review and Injunctive Relief pursuant to Tennessee Code Annotated section 4-5-322(a)(1) in Davidson County Chancery Court, asserting that the protesting dealers did not have standing to protest because the proposed dealership would not be located in the relevant market area, as defined in section 55-17-114(c)(20), and, accordingly, the Commission had no jurisdiction to proceed with the hearing. Hyundai requested that the court: (1) grant its petition for interlocutory judicial review, reverse the order denying its motion to dismiss, and dismiss the administrative proceeding with prejudice; (2) grant a stay of the administrative proceeding; (3) enter an order vacating the Commission's Notice of Contested Case Hearing; (4) award appropriate injunctive relief to prevent further proceedings; and (5) grant "other relief as may be proper."[3]

         The Commission moved to dismiss Hyundai's petition for lack of subject matter jurisdiction pursuant to Tenn. R. Civ. P. 12.02(1) and for failure to state a claim upon which relief could be granted pursuant to Rule 12.02 (6), asserting that Tennessee Code Annotated section 4-5-322(a)(1) did not authorize immediate judicial review of the administrative judge's preliminary ruling and that the Uniform Administrative Procedures Act ("UAPA") did not authorize injunctive relief against the Commission.

         In a Memorandum and Order entered on July 7, 2015, the trial court held that Hyundai failed to qualify under Tennessee Code Annotated section 4-5-322(a)(1) for immediate review and dismissed the petition. Hyundai appeals, articulating the following issues:

1. Whether the Commission is barred by Tennessee Code Annotated § 4-5-301(b) from deciding standing because it is a procedural question of law.
2. Whether the Administrative Proceeding is void ab initio because the Commission did not have jurisdiction to initiate or proceed with it.
3. Whether exhaustion of administrative remedies is required on a purely legal issue governed by an unambiguous statute when the facts are undisputed and the agency has no expertise regarding the issue.

         II. Discussion

         This is an appeal of the chancellor's dismissal of Hyundai's petition for lack of subject matter jurisdiction. Hyundai contends that judicial review pursuant to Tennessee Code Annotated section 4-5-322 is necessary because review of the ...


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