L Beck Chevrolet v. General Motors UNITED STATES COURT OF APPEALS 1 FOR THE SECOND CIRCUIT 2 August…

13‐4066(L)
Beck Chevrolet v. General Motors
UNITED STATES COURT OF APPEALS 1
FOR THE SECOND CIRCUIT 2
August Term, 2014 3
(Argued: October 6, 2014 Decided: May 19, 2015) 4
Docket Nos. 13‐4066, 13‐4310 5
6
Beck Chevrolet Co., Inc., 7
Plaintiff–Appellant‐Cross‐Appellee, 8
v. 9
General Motors LLC, 10
Defendant–Appellee‐Cross‐Appellant. 11
12
Before: S ACK, L IVINGSTON, and L OHIER, Circuit Judges. 13
The plaintiff, a motor vehicle dealer, appeals from a July 13, 2012, order 14
granting summary judgment to the defendant, a motor vehicle manufacturer, 15
and a September 30, 2013, final judgment denying the plaintiffʹs two remaining 16
claims for injunctive relief, entered in the United States District Court for the 17
Southern District of New York (Alvin K. Hellerstein, Judge). The plaintiffʹs 18
contract and New York Dealer Act claims arise principally out of a dispute over 19
the defendantʹs performance standards, vehicle allocation system, and alleged 20
unlawful modification of its franchise agreement with the plaintiff. We conclude 21
that New York state law is insufficiently developed for us to ascertain its proper 22

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interpretation in the context of several issues raised on this appeal, and that 1
questions as to what the applicable laws require should therefore be certified to 2
the New York Court of Appeals. We further conclude that the district court did 3
not err in dismissing the plaintiffʹs vehicle allocation claim, denying the 4
plaintiffʹs request for attorneyʹs fees, or dismissing the defendantʹs counterclaim 5
for rescission. 6
We therefore AFFIRM in part and CERTIFY the remaining questions to the 7
New York Court of Appeals. 8
RUSSELL P. MCRORY, Arent Fox LLP, 9
New York, NY, for Plaintiff–Appellant‐Cross‐ 10
Appellee. 11
JAMES C. MCGRATH, Seyfarth Shaw LLP, 12
(Christina Chan, Bingham McCutchen LLP, 13
on the brief), Boston, MA, for Defendant– 14
Appellee‐Cross‐Appellant. 15
S ACK, Circuit Judge: 16
This appeal requires us to address, apparently for the first time, several 17
provisions contained in New Yorkʹs Franchised Motor Vehicle Dealer Act (the 18
ʺDealer Actʺ), codified at New York Vehicle and Traffic Law sections 460 – 473. 19
The plaintiff, Beck Chevrolet Co., Inc., is the proprietor of a Chevrolet dealership 20
of the same name (the corporation and dealership are referred to hereinafter 21
collectively as ʺBeck.ʺ). Beck brought suit against its franchisor, General Motors, 22

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3
LLC (ʺGMʺ), for claims arising under the Dealer Act, and state contract law 1
claims, for imposition of unfair and unreasonable performance standards, unfair 2
modification of the franchise agreement, and refusal to deliver vehicles. The 3
district court (Alvin K. Hellerstein, Judge), granted GMʹs motion for summary 4
judgment with respect to the claims in Beckʹs first amended complaint, but 5
granted it leave to assert two claims for injunctive and declaratory relief under 6
the Dealer Act, sections 463(2)(c) and (gg). Following a bench trial, the district 7
court dismissed the second amended complaint and GMʹs counterclaim for 8
rescission of the franchise agreement. It also denied each partyʹs application for 9
attorneyʹs fees. 10
Several of the issues we must consider in order to resolve this appeal 11
require that we address unsettled questions of New York law. Beck challenges 12
the district courtʹs rulings that GMʹs performance metrics are neither unfair nor 13
unreasonable and that GMʹs expansion of Beckʹs sales area did not constitute a 14
ʺmodificationʺ of its Franchise Agreement under section 463 of the Dealer Act. 15
We conclude that New York state law is insufficiently developed in these areas to 16
enable us to predict with confidence how the New York Court of Appeals would 17
resolve these questions. We therefore certify to the Court of Appeals two 18

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4
questions concerning the application of the Dealer Act. We affirm the district 1
courtʹs dismissal of Beckʹs claims for attorneyʹs fees and unfair allocation of 2
vehicles, and GMʹs counterclaim for rescission of the Participation Agreement. 3
BACKGROUND 4
Beck, located in Yonkers, New York, is a retail dealer in Chevrolet 5
automobiles. It is operated under a set of franchise agreements entered into with 6
the defendant, GM, which is a limited liability company whose sole member is a 7
citizen of Delaware with its principal place of business in Michigan. 8
In 2009, General Motors Corp. (ʺOld GMʺ) entered into widely reported 9
bankruptcy proceedings in the United States Bankruptcy Court for the Southern 10
District of New York. In the course of those proceedings, Old GM, the defendant 11
GMʹs predecessor corporation, sought to shrink its dealer network in an effort to 12
reduce competition among retail dealers in General Motors automobiles and 13
improve the profitability of the remaining individual franchises. 14
As part of this effort, Old GM offered two types of agreements to its 15
franchisees. Some were offered a Participation Agreement, under which their 16
franchises would continue, while others were offered a Wind‐Down Agreement, 17
under which their franchises would be terminated in exchange for cash 18

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5
payments to them. Beck initially executed a Wind‐Down Agreement in which it 1
agreed to terminate its operations in or before October 2010 in exchange for a 2
payment to Beck of approximately $390,000. 3
Old GM subsequently sold substantially all of its assets and assigned its 4
interest in all its Participation and Wind‐Down Agreements with franchisees to 5
GM, the defendant in this case. Beck asked GM to reconsider Old GMʹs decision 6
to terminate the franchise. GM agreed to offer Beck a Participation Agreement in 7
place of the Wind‐Down Agreement. The parties executed that agreement in 8
September 2009. 9
From that point on, two contracts governed Beckʹs relationship with GM: 10
a Dealer Sales and Services Agreement (the ʺDealer Agreementʺ), which contains 11
standard provisions that set out the basic terms of the relationship between GM 12
and any dealer franchise, and a September 2009 Participation Agreement, which 13
further modified and supplemented the basic Dealer Agreement. Together, these 14
agreements govern several issues central to this dispute, including Beckʹs 15
primary geographic area of responsibility and the performance standards to 16
which it is subject. The terms of these agreements are all subject to the Dealer 17

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Act, which also contains certain mandatory provisions governing the 1
manufacturer‐franchisee relationship. 2
Performance Monitoring Formula 3
The primary issue on appeal relates to GMʹs use of a Retail Sales Index 4
(ʺRSIʺ) to measure its dealersʹ sales performance. In arriving at the RSI value for 5
a particular dealership, GM assigns each dealer an ʺArea of Primary 6
Responsibilityʺ and, in some instances, an ʺArea of Geographic Sales and Service 7
Advantageʺ (ʺAGSSAʺ). An Area of Primary Responsibility is a geographic area 8
in which a dealer is expected to sell GM automobiles and otherwise represent 9
GM. Urban Areas of Primary Responsibility, such as the part of Westchester 10
County, New York, in which Beck is located, are typically served by more than 11
one GM dealer. GM accordingly subdivides those areas into AGSSAs, for each of 12
which a single dealer is responsible. Both the Areas of Primary Responsibility 13
and the AGSSAs are composed of census tracts drawn by the U.S. Census 14
Bureau.1 AGSSAs and Areas of Primary Responsibility are non‐exclusive – 15
1 According to the United States Census Bureau,
Census Tracts are small, relatively permanent statistical subdivisions of a
county or equivalent entity that are updated by local participants prior to
each decennial census as part of the Census Bureauʹs Participant Statistical
Areas Program. The Census Bureau delineates census tracts in situations
where no local participant existed or where state, local, or tribal

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dealers are allowed to sell and market vehicles to consumers outside of their own 1
AGSSAs. The function of these territory markers is not to protect dealers from 2
competition but to provide a benchmark against which GM can measure dealersʹ 3
sales. 4
In determining an RSI for a Chevrolet dealer such as Beck, GM divides the 5
dealerʹs actual retail sales by its expected sales, which are calculated as described 6
below. Expressed as a formula: 7
Dealerʹs Total Sales
x 100 = RSI
Expected Sales Based on
State Average
8
Dealers are required to attain an RSI of at least 100, which GM contends is an 9
ʺaverageʺ score.2 ʺTotal salesʺ measures all of a particular dealerʹs actual sales in 10
governments declined to participate. The primary purpose of census tracts
is to provide a stable set of geographic units for the presentation of
statistical data.
Geographic Terms and Concepts – Census Tract, U.S. Census Bureau,
http://www.census.gov/geo/reference/gtc/gtc_ct.html (last visited Apr. 20, 2015).
2 We refer to this rather imprecisely as an ʺaverageʺ score because it reflects the
requirement that each dealerʹs market share equal GMʹs average statewide market
share. Unless all dealers attain the exact same market share, one would expect a
substantial number of dealers to score higher than average each year. It necessarily

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a particular period of time. The ʺexpected salesʺ metric is based not on the raw 1
state average among dealers, but on an ʺadjustedʺ statewide average market 2
share for Chevrolet products in the dealerʹs AGSSA.3 3
GM calculates each dealerʹs expected sales by first taking into account all 4
new motor vehicle registrations in the United States. It then compiles the 5
registrations by census tract and subdivides them into ʺsegmentsʺ of the motor 6
vehicle market, based on types of automobiles. To choose two examples, small 7
sport utility vehicles are a segment, as are mid‐size sedans. 8
GM adjusts the expected sales figure for statewide and local 9
characteristics. First, it takes into account Chevroletʹs market share within the 10
segments in which it competes on a statewide basis. For example, because 11
Chevrolet does not compete in the luxury sedan segment of the market, that 12
segment is excluded when calculating Chevroletʹs statewide market share. 13
Chevrolet does compete in the markets for mid‐size sedans and pickup trucks, 14
however. If, hypothetically, there are 10,000 mid‐size sedans sold in New York 15
follows that a substantial number will fall short, as well. And as dealer performance
improves, the sales required to achieve an RSI of 100 will increase.
3 GM has used a weighted statewide average since 1999, when it switched from using a
national average. GMʹs method is thus in keeping with the industry standard; the vast
majority of GMʹs competitors use a statewide or regional average, and some still
compare their dealersʹ performance to a national average.

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State and 600 of those are Chevrolets, Chevrolet will have a 6 percent market 1
share in New York State among mid‐size sedans. If there are 20,000 pickup 2
trucks sold in New York State, and 5,000 of those are Chevrolets, Chevrolet will 3
have a 25 percent market share in New York State among pickup trucks. 4
Second, the expected sales figure takes into account the relative popularity 5
of a particular segment in the dealerʹs AGSSA. In other words, the market‐share 6
percentages described above are used to calculate each dealerʹs expected sales. If 7
Chevrolet is a particularly strong statewide competitor in the market for a 8
particular type of car – pickup trucks, for example – but the market for pickup 9
trucks in a particular (likely urban or suburban) AGSSA is relatively small, then 10
the dealershipʹs expected sales targets for pickup trucks would be relatively low. 11
For example, a Chevrolet dealer in an AGSSA in which only four total pickup 12
trucks are purchased in a given year would be expected to sell only one 13
Chevrolet pickup truck, while a dealer in an AGSSA in which 100 pickup trucks 14
are purchased in a given year would be expected to sell twenty‐five. GM asserts 15
that these segment‐based adjustments reduced Beckʹs targets by more than 16
twenty‐five percent from the unadjusted state average. Beck does not contend 17
otherwise. 18

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Local adjustments do not account for local brand popularity, however. 1
For example, dealers like Beck operating in the southern part of the state 2
(ʺdownstateʺ) do not receive a downward adjustment in sales expectations even 3
though Chevrolet, as a brand, is more popular in upstate markets than in 4
Yonkers, Beckʹs location, and elsewhere in Westchester County and some nearby 5
suburban counties. 6
Beckʹs Performance under the Current RSI Formula 7
The Dealer Agreement establishes the basic outlines of GMʹs performance 8
evaluation process. Specifically, it provides that a dealerʹs RSI is ʺsatisfactoryʺ 9
only if it is equal to or greater than 100. If the dealerʹs RSI is above 100 and in the 10
top fifteen percent statewide, it is classified by GM as ʺsuperior.ʺ 11
If performance falls below satisfactory, GM is authorized by the 12
Participation Agreement to take one or more remedial measures set forth in 13
Article 13.2 of the Dealer Agreement. The ultimate step possible in this process is 14
termination of the agreement on ninety daysʹ prior written notice. The 15
Participation Agreement further provides: 16
In addition to the [RSI, GM] will consider any other relevant factors 17
in deciding whether to proceed under the provisions of Article 13.2 18
to address any failure by Dealer to adequately perform its sales 19
responsibilities. [GM] will only pursue its rights under Article 13.2 20

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to address any failure by Dealer to adequately perform its sales 1
responsibilities if [GM] determines that Dealer has materially 2
breached its sales performance obligations under this Dealer 3
Agreement. 4
J.A. 157. According to GM, GM prefers not to terminate dealers who fall below 5
target levels, and has remedial programs to help improve performance at those 6
dealerships. 7
Beckʹs RSI was considerably lower than 100 in the years leading up to 8
GMʹs 2009 bankruptcy reorganization. The Participation Agreement established 9
a roadmap for improving Beckʹs performance in stages, requiring Beck to attain 10
an RSI of 70 in 2010, 85 in 2011, and 100 in 2012. But Beckʹs RSI fell far short of 11
these targets, remaining close to 50 in each year. GM ultimately waived the 12
Participation Agreementʹs performance requirements for the 2010 calendar year, 13
but began enforcing performance targets in 2011. 14
Inventory Issues 15
Beck asserts that many of its performance issues derived from its inability 16
to obtain adequate inventory from GM. GM uses a vehicle allocation system 17
called ʺturn and earn,ʺ through which a dealerʹs allotted inventory is calculated 18
as a function of past sales. While Beck was operating under the Wind‐Down 19
Agreement, it was not permitted to place orders for new vehicle inventory with 20

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Beck Chevrolet v. General Motors
12
GM. According to Beck, Beckʹs depressed inventory caused sales to slow. Beck 1
argues that as a result of this slowdown, it could not order adequate inventory 2
under the ʺturn and earnʺ process even after it entered into the Participation 3
Agreement which permitted it to order vehicles from GM. 4
In an effort to boost sales, GM instituted a ʺspecial vehicle allocation 5
processʺ that was in effect from October 2010 through January 2011. The 6
program was designed to allow dealers to order more vehicles during those four 7
months than the ʺturn and earnʺ program would have permitted. Despite its 8
depressed inventory in the months leading up to the programʹs launch, Beck 9
objected to the program as a ʺpoison pill and recipe for disaster.ʺ Letter from 10
Russell S. Geller, Vice President, Beck Chevrolet Co., Inc., to James W. Bunnell, 11
General Manager—U.S. Sales operations, General Motors LLC (Oct. 11, 2010) 12
(J.A. 185‐86). The program, Beck asserted, would result ʺin the delivery of too 13
many vehicles too quickly,ʺ and would overload Beckʹs facilities, imposing high 14
additional costs. Id. The vehicles would be delivered in winter, an unpopular 15
season for purchasing new cars in New York, and Beck would be unlikely to sell 16
them in a timely fashion. Beck opted not to participate heavily in the allocation 17
program, declining 661, or 87 percent, of the vehicles GM offered to it. GM 18

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urged Beck to reconsider its approach in two letters sent in November 2010, but 1
apparently to no avail. 2
After GM ended the program and resumed its ordinary ʺturn and earnʺ 3
process, Beck started ordering more cars than GM allocated. For example, in 4
January 2011, while the special allocation was in effect, GM offered Beck 177 5
vehicles; Beck ordered only 31. GM resumed its ordinary process in February 6
2011, at which point GM shipped only 18 vehicles. Beck ordered 67. This 7
imbalance continued for the remainder of 2011, with Beck ordering between 22 8
and 84 vehicles each month, and GM shipping between 2 and 49 fewer vehicles 9
than Beck had requested. Although Beck sold fewer cars than it had in its 10
inventory in 2011, Beck contends that it could have sold more had GM honored 11
its requests for an additional 218 vehicles between February and December 2011. 12
Extension of the Participation Agreement 13
As noted, Beck signed a Participation Agreement with GM in 2009. But 14
during 2010, Beck operated under a short‐term Dealer Agreement, which was set 15
to expire on April 30, 2011. The parties anticipated renewing the Dealer 16
Agreement only if Beck attained its 2010 performance target: an RSI of 70. But, 17
because of the allocation issues, GM waived the performance requirements for 18

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14
2010. Attaining an RSI of 70 for 2010 was no longer a prerequisite to gaining an 1
extension. Instead, GM sent Beck a letter on April 6, 2011, offering to extend the 2
Dealer Agreement to April 30, 2012, and conditioning any further extension on 3
Beck meeting specified conditions: 4
If Dealer [Beck] meets its year end 2011 RSI and CSI [ʺCustomer 5
Satisfaction Indexʺ] performance requirements under the 6
Participation Agreement, and if Dealer is otherwise in compliance 7
with its obligations under the Dealer Agreement, GM will then 8
further extend the Dealer Agreement to April 30, 2013 to correspond 9
with Dealerʹs year end 2012 RSI and CSI requirements. 10
However, should Dealer not meet its 2011 Performance 11
Requirements, or should Dealer otherwise not be in compliance with 12
its obligations under the Dealer Agreement, GM shall have no 13
obligation to extend the Dealer Agreement beyond April 30, 2012. 14
Letter from William P. Flook, Jr., Zone Manager, General Motors LLC, to Leon 15
Geller, Dealer Operator, Beck Chevrolet Co., Inc. (Apr. 6, 2011) (J.A. 229). GM 16
noted that Beck would be deemed to have accepted the offer simply by opening 17
for business on May 1, 2011. 18
Beck considered this to be an unlawful modification of the terms of its 19
franchise because it conditioned renewal on accepting new terms. Beck brought 20
suit in Supreme Court, Westchester County in an effort, inter alia, to stop the 21

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modification from going into effect.4 One day later, on April 28, 2011, GM sent a 1
follow‐up letter explaining that the April 6 letter was intended ʺsolely to extend 2
the Chevrolet Dealer Sales and Service Agreement to April 30, 2012,ʺ not to 3
modify the terms of existing agreements, and that the agreements applicable 4
between the parties would remain in full effect according to their terms. Letter 5
from William P. Flook, Jr., Zone Manager, General Motors LLC, to Leon Geller, 6
Dealer Operator, Beck Chevrolet Co., Inc. (Apr. 28, 2011) (J.A. 232). 7
Enlarging Beckʹs Market Area 8
At about the same time, on April 22, 2011, GM informed Beck that based 9
upon its review of its dealer network, GM had concluded that it should make 10
changes to the Areas of Responsibility or AGSSAs for many GM dealerships. 11
The letter, which stated that it was provided ʺpursuant to New York Vehicle & 12
Traffic Law § 463(2)(ff)(1),ʺ notified Beck that its AGSSA would be increased by 13
four census tracts in Westchester and Fairfield Counties and reduced by seven 14
census tracts in Bronx County. Letter from William P. Flook, Jr., Zone Manager, 15
General Motors LLC, to Russell S. Geller and Leon Geller, Dealer Operators, Beck 16
4 GM removed the case to federal court on April 28, 2011. The removed action is the
case before us on appeal.

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Chevrolet Co., Inc. (Apr. 22, 2011) (J.A. 234). The practical effect of this change 1
was to increase Beckʹs expected sales. 2
Procedural History 3
On April 27, 2011, as noted, Beck brought suit against GM in New York 4
State court alleging violations of the New York Dealer Act for, inter alia, 5
modifying the franchise agreement without due cause, applying arbitrary or 6
unfair sales performance standards, refusing to deliver vehicles, and unlawful 7
nonrenewal of the franchise, as well as claims for breach of the Dealer 8
Agreement, and breach of GMʹs fiduciary duties. Based on the diversity of 9
citizenship of the parties, GM removed the case to the United States District 10
Court for the Southern District of New York. Following Beckʹs filing of an 11
amended complaint, GM moved for summary judgment. The district court 12
granted GMʹs motion on July 13, 2012, dismissing Beckʹs first amended 13
complaint in its entirety. Beck subsequently filed a second amended complaint, 14
seeking declaratory and injunctive relief on two of its Dealer Act claims. GM 15
counterclaimed for rescission of the Participation Agreement. 16
Following a September 2013 bench trial, the district court ruled in GMʹs 17
favor on the claims in Beckʹs second amended complaint, denied both partiesʹ 18

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applications for attorneyʹs fees, and dismissed GMʹs counterclaim as moot and 1
legally insufficient. Beck, on appeal, challenges most of the district courtʹs 2
rulings against it, and GM cross‐appeals from the dismissal of its claim for 3
rescission. 4
While this case was pending in the district court, GM sought to terminate 5
Beckʹs franchise agreement. Beck initiated state administrative proceedings 6
challenging the termination. On the same day that we heard oral argument in 7
this appeal, the administrative court ruled that GMʹs statewide RSI standard was 8
unreasonable as to downstate Chevrolet dealers and that GM had therefore 9
failed to demonstrate due cause to terminate Beckʹs franchise agreement. Beck 10
Chevrolet Co., Inc. v. Gen. Motors LLC, No. FMD 2013‐02 (N.Y. Depʹt of Motor Veh. 11
Oct. 6, 2014). 12
DISCUSSION 13
Beck argues that: first, GMʹs method of calculating RSI is not fair or 14
reasonable under Dealer Act section 463(2)(gg) because it does not account for 15
local brand preferences; second, GMʹs expansion of Beckʹs AGSSA constituted a 16
modification of Beckʹs franchise in violation of Dealer Act section 463(2)(ff); third, 17
GM violated Dealer Act section 463(2)(a) by refusing to deliver all of the 18

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inventory Beck ordered; and fourth, Beck was the prevailing party on its price 1
discrimination and unlawful modification claims and therefore is entitled to 2
attorneyʹs fees.5 GM also appeals from the district courtʹs dismissal of its 3
counterclaim for rescission of the Participation Agreement. Finally, both sides 4
challenge some of the district courtʹs evidentiary rulings. 5
I. Standard of Review 6
ʺOn appeal from a bench trial, the district courtʹs findings of fact are 7
reviewed for clear error and its conclusions of law are reviewed de novo.ʺ Mobil 8
Shipping & Transp. Co. v. Wonsild Liquid Carriers Ltd., 190 F.3d 64, 67 (2d Cir. 9
1999). The application of law to undisputed facts is also subject to de novo 10
review, Deegan v. City of Ithaca, 444 F.3d 135, 141 (2d Cir. 2006), as are mixed 11
questions of law and fact, Man Ferrostaal, Inc. v. M/V Akili, 704 F.3d 77, 82 (2d Cir. 12
2012). 13
To the extent that Beck also appeals from the district courtʹs dismissal of its 14
first amended complaint, we review that summary judgment award de novo, 15
ʺconstruing the evidence in the light most favorable to the non‐moving party. 16
5 To the extent that Beck intended to pursue its contract claim against GM for
ʺsabotaging Beckʹs reputation and its ability to increase its sales,ʺ Beck Br. at 2‐3, it has
ʺabandoned . . . [that] claim[] by failing to give [it] more than cursory treatment in its
brief on appeal.ʺ Giuffre Hyundai, Ltd. v. Hyundai Motor Am., 756 F.3d 204, 207 n.2 (2d
Cir. 2014).

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We will affirm . . . only where there is no genuine issue of material fact, and the 1
moving party is entitled to judgment as a matter of law.ʺ Lynch v. City of New 2
York, 737 F.3d 150, 156 (2d Cir. 2013) (citation omitted). 3
II. Reasonableness of GMʹs Performance Metrics 4
Beckʹs primary contention on appeal is that GMʹs performance standards 5
are ʺunreasonable, arbitrary or unfairʺ under Dealer Act section 463(2)(gg). The 6
district court granted GMʹs motion for summary judgment on Beckʹs claim for 7
damages under that section and, following a bench trial, ruled in GMʹs favor on 8
Beckʹs request for injunctive relief. Beck contends that the district court erred in 9
reading an ʺegregiousnessʺ requirement into the Dealer Act, misread relevant 10
case law, and improperly constrained Beckʹs ability to present its case. 11
Insofar as we and the parties can determine, neither the New York Court 12
of Appeals nor the Appellate Division of the New York Supreme Court has 13
interpreted section 463(2)(gg)ʹs prohibition of ʺunreasonable, arbitrary or unfair 14
sales or other performance standard[s].ʺ The parties therefore rely principally on 15
legislative history, administrative decisions, and several out‐of‐state cases 16
interpreting more or less similar state laws. 17

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We look to the Dealer Actʹs legislative history primarily in an effort to 1
understand the scope of judicial involvement in overseeing franchisor/franchisee 2
relationships that the New York State legislature envisioned. Unfortunately, the 3
legislative history is largely inconclusive on this point. There is support for both 4
the position that the state legislature intended the courts to correct unequal 5
bargaining power and cabin franchisorsʹ ability to impose conditions on dealers 6
and the position that it simply intended to protect franchisees against 7
arbitrariness and gross injustice. 8
The Dealer Act was passed in 1983 in order to ʺpromote the public interest 9
and the public welfareʺ by 10
regulat[ing] motor vehicle manufacturers, distributors 11
and factory or distributor representatives and . . . 12
dealers of motor vehicles doing business in this state in 13
order to prevent frauds, impositions and other abuses 14
upon its citizens and to protect and preserve the 15
investments and properties of the citizens of this state. 16
N.Y. Veh. & Traf. Law § 460. Beck argues that the legislature further intended to 17
ʺestablish an equilibrium of bargaining power between the motor vehicle 18
manufacturer and the motor vehicle dealer.ʺ Assembly Mem. in Support, Bill 19
Jacket, L.1983, ch. 815, at 6. Establishing equilibrium was apparently thought 20
necessary in light of the ʺgreat disparity in bargaining power between motor 21

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vehicle manufacturer and motor vehicle dealer.ʺ Id. The bill therefore sought ʺto 1
provide certain basic protections for the dealer in areas where such protection 2
[wa]s deemed necessary.ʺ Id. 3
Section 463(2)(gg), added by amendment in 2008, established new dealer 4
protection, making it unlawful for a franchisor ʺ[t]o use an unreasonable, 5
arbitrary or unfair sales or other performance standard in determining a 6
franchised motor vehicle dealerʹs compliance with a franchise agreement.ʺ The 7
parties disagree about the proper reading of this provision. Beck contends that a 8
performance standard that fails to take into account external forces that affect 9
dealersʹ performances, such as local brand preferences, is unreasonable. GM 10
argues that only unjust, deceptive, irrational, or capricious standards run afoul of 11
section 463ʹs protections, and that its requirements are none of those. 12
More specifically, Beck contends that the district court erroneously read an 13
ʺegregiousnessʺ requirement into section 463(2)(gg), under which a court will 14
reverse only egregious or deceptive decisions of the franchisor. The district court 15
expressed agreement with the First Circuitʹs position in Coady Corp. v. Toyota 16
Motor Distributors, Inc., 361 F.3d 50 (1st Cir. 2004), interpreting the Massachusetts 17
ʺDealerʹs Bill of Rights,ʺ Mass. Gen. Laws ch. 93B, that ʺ[a] distributor acting 18

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honestly is entitled to latitude in making commercial judgments[,] and . . . [i]n 1
this context, it is only the egregious decision that should be labeled ʹarbitraryʹ or 2
ʹunfair.ʹʺ Coady Corp., 361 F.3d at 56. Chapter 93B forbade ʺarbitrary or unfairʺ 3
modifications to franchise agreements. See id. at 55. The court reasoned that the 4
applicable Massachusetts provision did ʺnot demand perfection in allocation or 5
warrant a substitution of judicial for business judgment.ʺ Id. at 56. Instead, the 6
ʺegregiousnessʺ standard imposed by the law is highly deferential to the 7
franchisor. See id. 8
Beck contends that it was inappropriate for the district court to adopt that 9
interpretation of section 463(2)(gg). The New York provision, Beck argues, casts 10
ʺa wide net,ʺ forbidding not only arbitrary standards but also unreasonable ones. 11
Beck Reply Br. at 6. It is possible that the inclusion of ʺunreasonableʺ in section 12
463(2)(gg) is meant to signify a higher bar for franchisorsʹ actions than non‐ 13
arbitrariness review. See, e.g., N.Y. Stat. Law §§ 231‐32 (instructing that each 14
word in a statute should be given distinct effect according to its ordinary 15
meaning). That reading might also comport with the lawʹs general purpose to 16
protect motor vehicle dealers ʺagainst the superior economic power of the 17
franchisors.ʺ Bronx Auto Mall, Inc. v. Am. Honda Motor Co., 934 F. Supp. 596, 608 18

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Beck Chevrolet v. General Motors
23
(S.D.N.Y. 1996), affʹd on the opinion of the district court, 113 F.3d 329, 330 (2d Cir. 1
1997) (per curiam). 2
It is not clear, however, that the 2008 amendment that created section 3
463(2)(gg) was intended to have such a broad effect. Some of the legislative 4
history suggests that the legislature was primarily concerned with performance 5
standards that were too confusing or too poorly communicated to be understood 6
and followed by automobile dealers. See N.Y. Sponsorʹs Mem., Bill Jacket, 2008 7
S.B. 8678, ch. 490, at 13 (emphasizing that the amendment ʺbrings more openness 8
in dealer franchisor communicationsʺ); N.Y. Mem. in Support, Bill Jacket, 2008 9
S.B. 8678, ch. 490, at 42‐44 (Mark Schienberg, President of the Greater New York 10
Automobile Dealers Association, explained that section 463(2)(gg) will ʺprevent 11
misunderstandingsʺ and override performance standards that are too 12
complicated and insufficiently communicated). It may be, then, that the statute 13
was designed only to ensure that franchisorsʹ performance standards are 14
transparent and comprehensible, and that their substantive requirements are not 15
egregious. 16
Assuming arguendo that Beckʹs reading of the statute is correct, we address 17
its core contention that the statewide average GM uses to determine expected 18

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Beck Chevrolet v. General Motors
24
sales is unreasonable for its failure to account for local variations in brand 1
popularity. The relevant facts regarding this performance standard are 2
essentially undisputed. First, GMʹs performance metric is based on a statewide 3
sales average that does not account for depressed brand popularity, i.e., the 4
relative unpopularity of Chevrolet automobiles, in the relevant metro‐area 5
markets. Second, GMʹs metric does account for some local variation based on the 6
popularity of a given vehicle segment, such as pickup trucks, small sport utility 7
vehicles, and mid‐size sedans. Third, under the relevant agreements, a failure to 8
meet an RSI of 100 could result in GMʹs termination of the franchise or other 9
remedial measures. 10
On these facts, the district court decided that the use of a statewide 11
average was administratively convenient, objective, and easily understood, and 12
that GMʹs formula adequately adjusted for local conditions through its 13
segmentation analysis. The court appeared to adopt GMʹs contention that 14
applying a more localized standard would ʺdoom[] the entire make of Chevrolet 15
vehicles to mediocrityʺ because it would not encourage better sales in 16
underperforming areas. Trial Tr. at 669 (Sept. 24, 2013) (Special Appʹx 108). For 17
these reasons, it concluded that the metric was reasonable. 18

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
25
The few reported decisions addressing performance standards have not 1
adopted consistent interpretations of what is reasonable or acceptable. In a 2
related context, the New York Department of Motor Vehicles recently 3
determined that although Hondaʹs use of statewide averages to gauge sales 4
effectiveness was ʺnot a perfect system,ʺ it was also not ʺpatently unreasonable, 5
arbitrary, or unfair.ʺ Hartley Buick GMC Truck, Inc. v. Am. Honda Motor Co., No. 6
FMD 2010‐05 at 5, 8‐9 (N.Y. Depʹt of Motor Veh. Nov. 1, 2011), affʹd, No. 28447 7
(N.Y. Depʹt of Motor Veh. Admin. App. Bd. Feb. 28, 2012). 8
Several other administrative courts have reached the opposite conclusion, 9
however, rejecting statewide performance standards in favor of those that take 10
local variations into account. Most relevant for present purposes, the 11
Administrative Law Judge (ʺALJʺ) who considered Beckʹs challenge to GMʹs 12
notice of termination concluded that ʺ[f]or the New York City metropolitan area, 13
the RSI standard of GM is unreasonableʺ in part because ʺit does not realistically 14
reflect the Chevrolet sales challenges that Beck and other New York metropolitan 15
dealers face.ʺ Beck Chevrolet Co., Inc. v. Gen. Motors LLC, No. FMD 2013‐02, at 9 16
(N.Y. Depʹt of Motor Veh. Oct. 6, 2014). Although Beck has not argued that we 17

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
26
are bound by that decision,6 our desire to avoid potentially inconsistent results in 1
state, federal, and administrative courts in part motivates our decision to certify 2
this issue to the New York Court of Appeals. 3
Beck also relies heavily on North Shore, Inc. v. General Motors Corp., No. 4
MVRB 79‐01 (Ill. Mot. Veh. Rev. Bd. May 28, 2003), affʹd in relevant part sub nom. 5
General Motors Corp. v. Illinois Motor Vehicle Review Board, 361 Ill. App. 3d 271, 836 6
N.E.2d 903 (2005), affʹd, 224 Ill. 2d 1, 862 N.E.2d 209, 308 Ill. Dec. 611 (2007), in 7
which an Illinois ALJ resolved a challenge to GMʹs proposed addition of 8
dealerships in the greater Chicago area. The ALJ concluded that measuring sales 9
performance based on comparisons between similar market areas was preferable 10
to using a statewide or nationwide standard. See Gen. Motors Corp. v. State Motor 11
Vehicle Review Bd., 224 Ill. 2d 1, 21‐22, 862 N.E.2d 209, 223‐24, 308 Ill. Dec. 611, 12
6 Beck notified the court of the Department of Motor Vehiclesʹ decision in a letter filed
pursuant to Federal Rule of Appellate Procedure 28(j). It did not suggest that the
administrative decision did or might have a preclusive effect on any aspect of this
action and we accordingly consider the argument waived. We recognize, however, that
if the issue of whether GMʹs RSI was reasonable was ʺnecessarily raised and decidedʺ
by the Motor Vehicle Department, that determination could have preclusive effect here.
Ryan v. N.Y. Tel. Co., 62 N.Y.2d 494, 499‐500, 467 N.E.2d 487, 489‐90 (1984). Faced with a
similar issue, however, the Department of Motor Vehicles concluded that the Southern
District of New Yorkʹs 2013 decision in this action had no preclusive effect on the
dispute before it. Beck Chevrolet, No. FMD 2013‐02, at 6 (deciding that ʺthe issue of
reasonableness of the RSI is not precluded by the Federal Court decision as the burden
of proof in this proceeding has shifted from Beck to GMʺ and explaining differences in
the evidence put forth and considered in the two actions).

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Beck Chevrolet v. General Motors
27
625‐26 (2007) (discussing the state motor vehicle review boardʹs decision). 1
Although not decided under the New York Dealer Act or a provision similar to 2
its section 463(2)(gg), the Illinois courts expressly decided that a standard that 3
takes local variations, such as import bias, into account is a ʺsuperiorʺ method of 4
determining performance. Id. 5
An administrative court in Texas reached the same conclusion in a similar 6
case, reasoning that it was 7
patently unfair to conclude that a standard is 8
appropriate for comparison with a given market if most 9
of the markets used in creating the standard are 10
fundamentally dissimilar to the market at issue. Stated 11
another way, [an] ALJ cannot endorse a process that 12
characterizes a market as ʺunderperformingʺ simply 13
because it fails to meet a standard so profoundly 14
influenced by markets bearing so little resemblance to 15
the market in question. 16
Landmark Chevrolet Corp. v. Gen. Motors Corp., No. 02‐0002 LIC at 20‐21 (Tex. Mot. 17
Veh. Bd. Sept. 16, 2004), affʹd sub nom. Austin Chevrolet, Inc. v. Motor Vehicle Bd., 18
212 S.W.3d 425 (Tex. App. 2006); see also Halleen Chevrolet v. GMC, No. 03‐ 19
050MVDB‐277‐SS at 5 (Ohio Mot. Veh. Dealers Bd. July 21, 2006) (report and 20
recommendation) (ʺ[I]t is inappropriate to consider the expected Ohio average to 21
an urban multi‐dealer area such as the [designated area] in this case. Because 22

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
28
single market dealers in rural areas tend to achieve about the expected state 1
average and the urban dealers tend to achieve below, it seems that the average is 2
somewhat flawed in a case such as this.ʺ). 3
And the United States District Court for the Southern District of New York 4
recently denied a defendantʹs motion to dismiss a similar claim under the New 5
York Dealer Act. See CMS Volkswagen Holdings, LLC v. Volkswagen Grp. of Am., 6
Inc., 25 F. Supp. 3d 432, 441‐42 (S.D.N.Y.), reconsideration and reargument denied, 7
2014 WL 4961769, 2014 U.S. Dist. LEXIS 141105 (S.D.N.Y. Oct. 3, 2014). 8
These decisions are, of course, not binding on us, but they are instructive. 9
That several ALJs who routinely consider disputes between franchisors and 10
franchisees have concluded that statewide averages are not reasonable 11
performance indicators gives us pause. It seems sensible enough to conclude 12
that car dealers located in different parts of a single state would face different 13
barriers to success, including variations in local brand preferences. By failing to 14
take this into account, the existing performance standards make it likely that that 15
the lowest‐performing dealers will be concentrated in the areas in which GMʹs 16
brands are the weakest. 17

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
29
At the same time, however, section 463(2)(gg) does not mandate that 1
franchisors impose individually tailored or perfectly just performance standards. 2
It prohibits only performance standards that are ʺunreasonable, arbitrary or 3
unfair.ʺ And, as the district court recognized, GMʹs performance standards have 4
significant virtues, including ease of administration, predictability, uniformity, 5
and encouragement of innovation in struggling markets. They give GM greater 6
flexibility to demand changes or shut down unproductive dealerships. And, 7
importantly, they appear to represent the industry standard. 8
Recognizing these competing considerations and the absence of existing 9
guidance from the New York Court of Appeals, we think it best to certify the 10
following question to it for its determination: 11
(1) Is a performance standard that requires ʺaverageʺ performance based 12
on statewide sales data in order for an automobile dealer to retain its 13
dealership ʺunreasonable, arbitrary, or unfairʺ under New York Vehicle 14
& Traffic Law section 463(2)(gg) because it does not account for local 15
variations beyond adjusting for the local popularity of general vehicle 16
types? 17
18
III. Modification of the Dealer Agreement 19
Beck also appeals from the district courtʹs grant of summary judgment 20
against it on its claim that changes to its AGSSA constituted an unfair 21

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
30
ʺmodificationʺ of its Dealer Agreement under section 463(2)(ff)(1)‐(2) of the New 1
York Vehicle & Traffic Law. That subsection provides that it is 2
unlawful for any franchisor, notwithstanding the terms 3
of any franchise contract . . . [t]o modify the franchise of 4
any franchised motor vehicle dealer unless the 5
franchisor notifies the franchised motor vehicle dealer, 6
in writing, of its intention to modify the franchise of 7
such dealer at least ninety days before the effective date 8
thereof, stating the specific grounds for such 9
modification. 10
N.Y. Veh. & Traf. Law § 463(2)(ff)(1). ʺModificationʺ is defined as ʺany change or 11
replacement of any franchise if such change or replacement may substantially 12
and adversely affect the new motor vehicle dealerʹs rights, obligations, 13
investment or return on investment.ʺ Id. § 463(2)(ff)(2). Upon receiving notice of 14
an intended modification, the franchisee may challenge the modification as 15
unfair. A modification is ʺunfair if it is not undertaken in good faith; is not 16
undertaken for good cause; or would adversely and substantially alter the rights, 17
obligations, investment or return on investment of the franchised motor vehicle 18
dealer under an existing franchise agreement.ʺ Id. § 463(2)(ff)(3). 19
The April 22, 2011, letter notifying Beck that GM had increased Beckʹs 20
AGSSA by four census tracts stated that it was provided ʺpursuant to New York 21
Vehicle & Traffic Law § 463(2)(ff)(1).ʺ Letter from William P. Flook, Jr., Zone 22

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Beck Chevrolet v. General Motors
31
Manager, General Motors LLC, to Russell S. Geller and Leon Geller, Dealer 1
Operators, Beck Chevrolet Co., Inc. (Apr. 22, 2011) (J.A. 234). Beck argues that 2
GM thereby acknowledged that the revision constituted a ʺmodificationʺ under 3
the Dealer Act for which GM failed to demonstrate good cause. The Dealer 4
Agreement states, however, that GM ʺretains the right to revise the Dealerʹs Area 5
of Primary Responsibility at General Motors[ʹ] sole discretion consistent with 6
dealer network objectives.ʺ J.A. 143. If the agreement expressly reserves to GM 7
the power to unilaterally revise the Area of Primary Responsibility, such a 8
revision might not constitute a contract modification. 9
The district court concluded that the exercise of contractually conferred 10
discretion generally does not constitute a modification of the contract. See also, 11
e.g., Subaru Distribs. Corp. v. Subaru of Am., Inc., 47 F. Supp. 2d 451, 459 n.3 12
(S.D.N.Y. 1999) (periodic quota amendments contemplated by contract did not 13
constitute amendments to dealer agreement); In re Kerry Ford, Inc., 106 Ohio App. 14
3d 643, 651‐52, 666 N.E.2d 1157, 1162‐63 (1995) (use of service bulletins to provide 15
updated service standards did not modify the contract where they were 16
contemplated by the sales and service agreement). But we are not convinced that 17
the Dealer Act contemplated that result. If the act was designed to protect 18

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
32
franchisees from manufacturersʹ disproportionate bargaining power, we might 1
read section 463(2)(ff)(1) to proscribe contractual provisions that allow 2
manufacturers to circumvent the Actʹs protections by retaining unilateral 3
discretion to revise specified elements of the Dealer Agreement. 4
Moreover, under the Dealer Act, a modification is ʺany change . . . of any 5
franchise if such change or replacement may substantially and adversely affect 6
the new motor vehicle dealerʹs rights, obligations, investment or return on 7
investment.ʺ N.Y. Veh. & Traf. Law § 463(2)(ff)(2). GM argues that the word 8
ʺfranchiseʺ refers to the Dealer Agreement, and because a change to the AGSSA 9
has no impact on the Dealer Agreement, a change to the AGSSA is not a 10
modification. But the statute defines a ʺfranchiseʺ not in terms of a single 11
agreement, but as a ʺwritten arrangement.ʺ N.Y. Veh. & Traf. Law § 462(6). This 12
ʺarrangementʺ might extend beyond the Dealer Agreement to include secondary 13
documents, including those defining Beckʹs AGSSA. Only one New York court 14
has addressed this issue so far as we know, and it concluded that a change to the 15
dealerʹs Area of Primary Responsibility does constitute a modification under 16
section 463(2)(ff). See Van Wie Chevrolet, Inc. v. Gen. Motors LLC, No. 2012‐0284 at 17
2‐3 (N.Y. Sup. Ct. Onondaga Cnty. June 13, 2014). 18

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
33
On the other hand, if the Dealer Act was designed to do no more than 1
ensure clarity in communications and negotiations between franchisor and 2
franchisee, it most likely would not apply to GMʹs express reservation of the 3
right to modify Beckʹs AGSSA. In the absence of any state appellate court 4
decisions indicating how the New York Court of Appeals would rule on this 5
issue, we also certify the following question for its determination: 6
(2) Does a change to a franchiseeʹs Area of Primary Responsibility or 7
AGSSA constitute a prohibited ʺmodificationʺ to the franchise under 8
section 463(2)(ff), even though the standard terms of the Dealer 9
Agreement reserve the franchisorʹs right to alter the Area of Primary 10
Responsibility or AGSSA in its sole discretion? 11
12
IV. Vehicle Allocation 13
Beck next contends that the district court erred in granting summary 14
judgment on its claim that GM wrongly refused to deliver requested vehicles. 15
This claim also arises under the Dealer Act, but unlike the claims discussed 16
above, we are confident that we can correctly resolve this question without 17
certification to the New York Court of Appeals. See Licci ex rel. Licci v. Lebanese 18
Canadian Bank, SAL, 673 F.3d 50, 74 (2d Cir. 2012) (ʺ[W]e need not certify if we are 19
confident that we can correctly resolve the matter at issue ourselves . . . .ʺ). 20

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
34
Under the Dealer Act, it is unlawful to ʺrefuse to deliver in reasonable 1
quantity and within a reasonable time after receipt of a dealerʹs order to any 2
franchised motor vehicle dealer any vehicle covered by such franchise which is 3
publicly advertised by such franchisor to be available for immediate delivery.ʺ 4
N.Y. Veh. & Traf. Law § 463(2)(a). Although ʺ[d]isputes over reasonableness are 5
usually fact questions for juries,ʺ Lennon v. Miller, 66 F.3d 416, 421 (2d Cir. 1995), 6
ʺ[s]ummary judgment . . . is [] appropriate when the non‐moving party has failed 7
to set forth any facts that go to an essential element of the claim,ʺ King v. 8
Crossland Sav. Bank, 111 F.3d 251, 259 (2d Cir. 1997). 9
Beck relies on an affidavit submitted by its vice‐president to support its 10
claim. We conclude that the uncontested facts asserted in it are insufficient to 11
allow Beck to prevail. They establish only the following: Beck had low 12
inventory entering 2010 as a result of having entered into the Wind‐Down 13
Agreement in 2009. Under that agreement, Beck was not allotted any new 14
inventory. GM had a ʺturn and earnʺ vehicle allocation system by which dealers 15
were allocated inventory based on prior sales. Beck argues that low inventory 16
under the Wind‐Down Agreement yielded low sales in 2009, which made it 17
difficult to re‐build its inventory after it signed the 2010 Participation Agreement. 18

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
35
Beck acknowledges, however, that it had sufficient inventory to meet 1
demand at all times in 2010 and 2011 and that it refused cars offered to it. In 2
2010, for example, Beck received 358 vehicles and sold only 289, leaving 69 (plus 3
any remaining inventory from 2009) unsold entering 2011. GM administered its 4
special allocation program from October 2010 through January 2011, which 5
would have enabled Beck to receive additional inventory each month. Beck 6
acknowledges that it refused to take part in the program, arguing that it would 7
have resulted in too much inventory during the low‐sale winter months. But 8
Beck’s own ordering patterns appear to disprove Beckʹs explanation of the basis 9
for its refusal to participate in the special allocation program. GM offered Beck 10
177 vehicles in January 2011. Beck ordered only 31, refusing the other 146. In the 11
next two months, after the special allocation program had ended but still during 12
winter, Beck ordered 151 cars – significantly more than its allocation. Beck offers 13
no explanation for its refusal to take the 146 extra cars offered in January in light 14
of its substantial order in the following two months. Moreover, Beck had more 15
than adequate inventory to satisfy its 2011 sales of 347 cars. 16
On these facts, the district court properly determined that ʺthe admissible 17
evidence [wa]s insufficient to permit a rational juror to find in favor of the 18

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
36
plaintiff.ʺ Amorgianos v. Natʹl R.R. Passenger Corp., 303 F.3d 256, 267 (2d Cir. 1
2002). Even if Beck could have benefited from a different vehicle allocation 2
system, and even if it could have sold additional vehicles had GM allocated 3
them, Beck provides no evidence suggesting that GMʹs system for allocating 4
vehicles was unreasonable or unfair. To the contrary, GM employed an 5
equitable allocation system based on past performance. When it became clear 6
that the system was inadequate for dealers who had entered Wind‐Down 7
Agreements before signing Participation Agreements, GM modified the system 8
to offer additional inventory. Beck refused the vast majority of what GM offered, 9
including 146 of the vehicles offered in January 2011. Nevertheless, it ordered 10
151 vehicles beyond GMʹs allocation in the following two months. GMʹs refusal 11
to deliver to Beck exactly the number of vehicles it asked for in the month it 12
asked for them does not constitute a failure to deliver a ʺreasonable quantity [of 13
vehicles] [] within a reasonable time.ʺ N.Y. Veh. & Traf. Law § 463(2)(a). 14
V. Attorneyʹs Fees 15
Beck also asserts that it is entitled to attorneyʹs fees on two claims 16
dismissed by the district court, arguing that it was the ʺprevailing partyʺ as to 17
those claims because GM voluntarily abandoned the policies that Beck had 18
challenged. Although attorneyʹs fees frequently are statutorily limited to 19

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
37
prevailing parties, see, e.g., 42 U.S.C. § 12205 (ʺIn any action or administrative 1
proceeding commenced pursuant to this chapter, the court or agency, in its 2
discretion, may allow the prevailing party, other than the United States, a 3
reasonable attorneyʹs fee.ʺ); 17 U.S.C. § 505 (ʺExcept as otherwise provided by 4
this title, the court may also award a reasonable attorneyʹs fee to the prevailing 5
party as part of the costs.ʺ), a party need not qualify as a ʺprevailing partyʺ in 6
order to receive a fee award under the Dealer Act. 7
The Dealer Act provides that ʺthe court may award necessary costs and 8
disbursements plus a reasonable attorneyʹs fee to any party.ʺ N.Y. Veh. & Traf. 9
Law § 469(1). The district court declined to grant attorneyʹs fees to either party 10
both because the ʺ[p]laintiff [wa]s the losing party and because an award of 11
attorneysʹ fees would not be appropriate . . . given the good faith nature of the 12
claims and defenses. . . .ʺ Order at 2 (Sept. 25, 2013) (Special Appʹx 91). We 13
review a district courtʹs fee determination for abuse of discretion. McDaniel v. 14
Cnty. of Schenectady, 595 F.3d 411, 416 (2d Cir. 2010). 15
Setting aside the question whether Beck was required to be the prevailing 16
party in order to qualify for an attorneyʹs fee award, the district court did not 17
abuse its discretion in denying Beckʹs fee request. The courtʹs denial of fees was 18

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
38
not based on ʺan erroneous view of the law or on a clearly erroneous assessment 1
of the evidence.ʺ In re Sims, 534 F.3d 117, 132 (2d Cir. 2008) (internal quotation 2
marks omitted). On the contrary, its decision to deny fees because of the ʺgood 3
faith nature of the claims and defenses,ʺ Order at 2 (Sept. 25, 2013) (Special Appʹx 4
91), was ʺlocated within the range of permissible decisions,ʺ particularly in light 5
of section 469ʹs permissive language, Sims, 534 F.3d at 132 (internal quotation 6
marks omitted). 7
VI. GMʹs Counterclaim for Rescission 8
GM appeals from the district courtʹs dismissal of its counterclaim for 9
rescission of the Participation Agreement as moot. The crux of GMʹs 10
counterclaim is that Beck failed to meet the state average RSI – an essential 11
element of the Participation Agreement. Having dismissed Beckʹs claims against 12
GM and apparently believing that the dismissal would be dispositive of the 13
related termination proceeding in the Motor Vehicle Department, the district 14
court determined that GM no longer had any need to bring suit for rescission. 15
But in light of the Motor Vehicle Departmentʹs ruling against GM in its effort to 16
terminate the franchise, we do not think that GMʹs counterclaim for rescission is 17
moot. We nonetheless affirm the district courtʹs dismissal, albeit on a different 18
basis. 19

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Nos. 13‐4066, 13‐4310
Beck Chevrolet v. General Motors
39
Rescission is an equitable remedy, the use of which is generally left to the 1
courtsʹ discretion. But that discretion may be displaced by ʺclear and valid 2
legislative command.ʺ United States v. Oakland Cannabis Buyersʹ Coop., 532 U.S. 3
483, 496 (2001). In other words, where the legislature has clearly expressed its 4
intent to cabin a courtʹs discretion to fashion equitable remedies, the court must 5
respect those limitations. Such is the case here. Section 463(2)(d)‐(e) of the New 6
York Vehicle and Traffic Law expressly requires due cause, notice, and an 7
opportunity to cure before the franchisor may terminate the franchise. N.Y. Veh. 8
& Traf. Law § 463(2)(d)‐(e). ʺTerminateʺ is defined to include ʺrescission.ʺ Id. 9
§ 462(17). As a result, we would only be empowered to grant rescission to GM if 10
it had first demonstrated due cause for rescission and provided Beck with both 11
notice and the opportunity to cure. GM failed to satisfy those prerequisites, and 12
we therefore affirm the district courtʹs dismissal of this claim. 13
VII. Evidentiary Issues 14
Finally, Beck and GM each challenge several of the district courtʹs 15
evidentiary rulings. We review evidentiary rulings for abuse of discretion. Ret. 16
Plan of UNITE HERE Natʹl Ret. Fund v. Kombassan Holdings A.S., 629 F.3d 282, 287 17
(2d Cir. 2010). We will grant a new trial ʺif the district court committed errors 18
that were a clear abuse of discretion that were clearly prejudicial to the outcome 19

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Beck Chevrolet v. General Motors
40
of the trial,ʺ measuring prejudice ʺby assessing the error in light of the record as a 1
whole.ʺ Marshall v. Randall, 719 F.3d 113, 116 (2d Cir. 2013) (internal quotation 2
marks omitted). We address each of the partiesʹ challenges briefly, concluding 3
that none has merit. 4
First, Beck challenges the district courtʹs exclusion of a portion of an expert 5
witness report comparing the number of non‐GM competitor dealerships in 6
upstate New York and downstate New York. Beck sought to use the report to 7
cross‐examine GMʹs witness about whether GM should consider inter‐brand 8
competition in designing performance metrics. But even assuming that the 9
district court erred in excluding the expert report, Beck suffered no prejudice. 10
See United States v. Gupta, 747 F.3d 111, 133‐34 (2d Cir. 2014) (setting forth several 11
factors that are to be considered by a reviewing court in determining whether 12
any error was harmless, including the ʺimportance of . . . unrebutted assertions,ʺ 13
duplication of evidence, and the strength of the opposing partyʹs evidence on 14
that point (alteration in original)). Counsel for Beck questioned GMʹs expert at 15
length about the same topic addressed in the report. The expert responded that 16
RSI should not be adjusted by regional differences in inter‐brand competition, 17
and that existing segmentation captures those disparities. Beck was thus able to 18

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Beck Chevrolet v. General Motors
41
elicit the same testimony without the report that it would have been able to with 1
it, making introduction of the report duplicative and unnecessary to rebut GMʹs 2
case. 3
Second, Beck challenges the district courtʹs exclusion of a document 4
reflecting the amount of advertising money spent nationwide and in New York 5
City, which purportedly would show that GM spent less on advertising in the 6
New York City area in 2010 and 2011 than in 2009 and 2012. The district court 7
properly excluded the report both because Beck sought to use it to cross‐examine 8
GMʹs expert witness, Sharif Farhat, on a topic that was beyond the scope of his 9
direct examination, see Fed. R. Evid. 611(b); United States v. Koskerides, 877 F.2d 10
1129, 1136 (2d Cir. 1989), and any comparison that did not include relative 11
spending upstate and downstate was minimally useful, at best, see Fed. R. Evid. 12
401, 403. The possible explanations for Beckʹs poor performance in 2010 and 2011 13
are not at issue in this case. The question is whether it was and is reasonable for 14
GM to compare Beckʹs performance to the performance of upstate dealers. While 15
evidence that GM spent less on advertising in the New York City area relative to 16
what it spent upstate might enhance Beckʹs argument, then, evidence that GM 17

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spent less on advertising in New York City in 2010 and 2011 relative to 2009 and 1
2012, or even relative to the rest of the country, does not. 2
Third, the district court did not err in foreclosing Beckʹs attempt to cross‐ 3
examine GMʹs expert on whether GMʹs exit from the market for leasing vehicles 4
to drivers could have adversely impacted downstate dealers. The expert had not 5
testified about leasing on direct examination, and he testified on cross‐ 6
examination that leasing did not have an impact on RSI calculations and that he 7
was unaware of any bearing it may have had on Beckʹs situation. The district 8
court plainly acted within its discretion in curtailing this line of questioning 9
under Rule 611, which instructs that ʺ[c]ross‐examination should not go beyond 10
the subject matter of the direct examination and matters affecting the witnessʹs 11
credibility.ʺ Fed. R. Evid. 611(b); see also Koskerides, 877 F.2d at 1136. 12
Finally, GM challenges the district courtʹs exclusion of evidence that Beckʹs 13
own operational decisions were at fault for its poor performance. As noted, this 14
evidence would not have been relevant to the question whether GM employed 15
an ʺunreasonable, arbitrary or unfair sales or other performance standard,ʺ N.Y. 16
Veh. & Traf. Law § 463(2)(gg), and was therefore properly excluded. See Fed. R. 17
Evid. 401, 403. To the extent that GMʹs performance standard is unreasonable, it 18

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43
is so because it compares dealerships whose sales are influenced by distinct 1
market factors. That Beck could have made certain operational changes is not 2
relevant. 3
CONCLUSION 4
For the foregoing reasons, we AFFIRM the district courtʹs judgment in part 5
and CERTIFY the remaining questions to the New York Court of Appeals. 6
7
Certification 8
In this Circuit, ʺ[i]f state law permits, the court may certify a question of 9
state law to that stateʹs highest court.ʺ 2d Cir. R. 27.2(a). The New York state law 10
permitting certification is N.Y. Comp. Codes R. & Regs. tit. 22, § 500.27(a), which 11
provides, ʺWhenever it appears to . . . any United States Court of Appeals . . . that 12
determinative questions of New York law are involved in a case pending before 13
that court for which no controlling precedent of the [New York] Court of 14
Appeals exists, the court may certify the dispositive questions of law to the Court 15
of Appeals.ʺ We have discretion to certify questions to the New York Court of 16
Appeals even where, as here, the parties have not requested certification. See 17
Licci, 673 F.3d at 74. 18

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Several factors guide our decision to exercise this discretion. ʺFirst, and 1
most important, certification may be appropriate if the New York Court of 2
Appeals has not squarely addressed an issue and other decisions by New York 3
courts are insufficient to predict how the Court of Appeals would resolve it.ʺ 4
Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 42 (2d Cir. 2010). ʺSecond, the 5
question on which we certify must be of importance to the state, and its 6
resolution must require [] value judgments and important public policy choices 7
that the New York Court of Appeals is better situated than we to make.ʺ Licci, 8
673 F.3d at 74 (citations and internal quotation marks omitted; brackets in 9
original). Finally, certification is appropriate if the question or questions are 10
ʺdeterminative of a claim before us.ʺ Id. (internal quotation marks omitted). 11
None of the provisions of the New York Dealer Act implicated in this case 12
has been addressed by the New York Court of Appeals or, at any length or 13
depth, by another state court. The disposition of this case could have a 14
substantial impact not only on the relationship between General Motors and its 15
franchisees, but also on other franchisor/franchisee relationships in New York 16
State. And GMʹs performance metrics are industry standard. A ruling that the 17
standard violates the New York Dealer Act could therefore result in statewide— 18

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45
or perhaps even broader—challenges and changes. And deciding these issues 1
would require us to determine the level of judicial intervention in the 2
franchisor/franchisee relationship that the New York Legislature intended. Such 3
a determination implicates significant policy issues and is, we think, best decided 4
by state courts. 5
We accordingly certify the following two questions to the New York Court 6
of Appeals: 7
(1) Is a performance standard that requires ʺaverageʺ performance based 8
on statewide sales data in order for an automobile dealer to retain its 9
dealership ʺunreasonable, arbitrary, or unfairʺ under New York Vehicle 10
& Traffic Law section 463(2)(gg) because it does not account for local 11
variations beyond adjusting for the local popularity of general vehicle 12
types? 13
(2) Does a change to a franchiseeʹs Area of Primary Responsibility or 14
AGSSA constitute a prohibited ʺmodificationʺ to the franchise under 15
section 463(2)(ff), even though the standard terms of the Dealer 16
Agreement reserve the franchisorʹs right to alter the Area of Primary 17
Responsibility or AGSSA in its sole discretion? 18
ʺAs is our practice, we do not intend to limit the scope of the Court of 19
Appealsʹ analysis through the formulation of our questions, and we invite the 20
Court of Appeals to expand upon or alter these questions as it should deem 21
appropriate.ʺ Licci, 673 F.3d at 75 (internal quotation marks and brackets 22
omitted). 23

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It is hereby ORDERED that the Clerk of this Court transmit to the Clerk of 1
the New York Court of Appeals this opinion as our certificate, together with a 2
complete set of the briefs, the appendix, and the record filed in this Court by the 3
parties. The parties shall bear equally any fees and costs that may be imposed by 4
the New York Court of Appeals in connection with this certification. This panel 5
will resume its consideration of this appeal after the disposition of this 6
certification by the New York Court of Appeals. 7

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