## Facts

- David R. McGeorge Car Co., Inc. operated an automobile dealership in Richmond, Virginia, selling Mercedes-Benz, Triumph, and Toyota vehicles.
- Leyland Motor Sales, Inc. was a regional distributor for British Leyland and the franchisor for Triumph dealers.
- British Leyland implemented a U.S. “rationalization program” intended to increase sales of Rover vehicles by pairing Rover with Triumph distribution.
- Triumph vehicles were in chronic short supply; dealers valued access to allocations of Triumph inventory.
- Leyland conditioned “fair share” Triumph allocations on a dealer’s agreement to accept a Rover franchise.
- McGeorge refused to take Rover, citing direct competition with its Mercedes-Benz line.
- Leyland substantially reduced McGeorge’s Triumph allocations while favoring dealers that accepted Rover.
- Leyland later permitted McGeorge’s Triumph franchise to expire and refused to renew it.
- McGeorge sued under the Dealers Day in Court Act (DDICA) and federal antitrust statutes, including the Robinson-Patman Act, alleging coercion via allocation practices and unlawful nonrenewal.

## Issues

1. Whether manipulating Triumph allocations to pressure McGeorge into accepting a Rover franchise constituted lack of “good faith” (coercion) under the DDICA.
2. Whether refusal to renew McGeorge’s Triumph franchise, after McGeorge declined Rover, constituted lack of “good faith” under the DDICA.
3. Whether the allocation scheme and Triumph-to-Rover linkage supported antitrust liability, including under the Robinson-Patman Act.

## Decision

- The Fourth Circuit affirmed the finding that Leyland’s targeted reduction of Triumph allocations to force acceptance of Rover constituted coercion and violated the DDICA.
- The Fourth Circuit affirmed the denial of DDICA relief based solely on the refusal to renew the Triumph franchise.
- The court left undisturbed the district court’s antitrust disposition, including Robinson-Patman relief tied to the discriminatory allocation practices, and declined to expand antitrust liability beyond the lower court’s findings.

## Legal Principles

- DDICA “good faith” is not a general commercial-reasonableness test; it is defined by whether conduct involves coercion, intimidation, or threats of either.
- Persuasion or business argument to add product lines is not actionable under the DDICA; using control over essential inventory as leverage to compel dealer compliance may constitute coercion.
- A manufacturer/distributor’s refusal to renew a franchise is actionable under the DDICA only if supported by proof of coercion or intimidation connected to the nonrenewal decision, not merely a business dispute or strained relationship.
- Discriminatory allocation practices may support Robinson-Patman liability when used to disadvantage disfavored dealers and favor others in comparable competitive positions.

## Conclusion

The Fourth Circuit held that a distributor violates the DDICA when it deliberately withholds or skews scarce vehicle allocations to pressure a dealer into taking an additional franchise line, but affirmed that the nonrenewal of the dealer’s franchise was not independently actionable absent coercion or intimidation tied to the nonrenewal itself.


David R. McGeorge Car Co. v. Leyland Motor Sales, Inc., 504 F.2d 52 (4th Cir. 1974), cert. denied, 420 U.S. 992 (1975)