The protracted challenge to
New Hampshire Senate Bill 126, which amended New
Hampshire's Motor Vehicle Franchise Act to include farm,
industrial, construction, forestry, and yard and garden equipment,
has finally come to an end. On October 3, 2016, the U.S. Supreme
Court denied the equipment manufacturers' petition for
certiorari without comment and, in doing so, dealt the final blow
to any hope that SB 126 would be struck down as a violation of the
In support of the petition for certiorari, the equipment
manufacturers argued that the New Hampshire Supreme Court erred by
declining to accept the manufacturers' arguments that (1) SB
126 violates the contracts clause of the U.S. Constitution insofar
as it impairs existing equipment dealership contracts by subjecting
them to New Hampshire's protectionist motor vehicle statutory
scheme, and (2) protectionist legislation like SB 126 does not
safeguard the general welfare of New Hampshire's citizens, nor
does its retroactive application to existing equipment dealer
contracts serve any legitimate and substantial public purpose.
Instead, according to the manufacturers, SB 126 is geared simply to
protect certain special interest groups (e.g., industrial equipment
In opposition to the equipment manufacturers' petition for
certiorari, New Hampshire and several equipment dealers argued that
the New Hampshire Supreme Court applied the correct level of
scrutiny in its contracts clause analysis and thus properly
concluded that SB 126 served a "significant and legitimate
public purpose" — protecting dealers from allegedly
abusive and oppressive manufacturers — and was a
"reasonable" and "appropriate" way to achieve
that public purpose.
Although the U.S. Supreme Court denied the equipment
manufacturers' petition without comment, it is possible that
the court declined to review the challenge to SB 126 because New
Hampshire's statutory scheme governing automobile manufacturers
had long been a part of New Hampshire's regulatory regime, and
equipment manufacturers should have reasonably expected that they,
too, could be regulated in similar fashion.
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An increasingly important responsibility of the general counsel is to advise the corporation, and its officers and directors, on the application and extent of insurance/advancement and indemnification protections.
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