The First Circuit Court of Appeals held that enforcement of Rhode Island’s motor vehicle dealer statute to require notice and protest rights for an out-of-state dealership appointment would violate the Dormant Commerce Clause. R.I. Truck Ctr., LLC v. Daimler Trucks N. Am., LLC, 2026 WL 1948541 (1st Cir. July 6, 2026). A Rhode Island dealer of Freightliner trucks alleged that manufacturer Daimler violated Rhode Island’s dealer statute by granting a Freightliner franchise to a Massachusetts dealer located within the Rhode Island dealer’s contractual area of responsibility. The dealer sought an order requiring Daimler to terminate its franchise agreement with the Massachusetts dealer, as well as damages and attorneys’ fees.
After the Rhode Island Supreme Court confirmed that the statutory definition of “relevant market area” could extend beyond Rhode Island’s borders, the First Circuit addressed whether enforcing the statute under those circumstances would violate the Dormant Commerce Clause. The court held that it would. As applied, the statute directly regulated a purely out-of-state transaction by allowing a Rhode Island dealer to block the establishment of a dealership in another state. The court further found that the law raised concerns of economic protectionism because it gave Rhode Island dealers the ability to challenge new dealerships outside Rhode Island while denying out-of-state dealers equivalent rights in Rhode Island. The court also noted that the statute created a risk of conflicting regulatory obligations because compliance with a Rhode Island order requiring termination of a Massachusetts dealership could expose the manufacturer to liability under Massachusetts dealer laws. Accordingly, the First Circuit affirmed summary judgment for Daimler, holding that the dealer statute was unconstitutional as applied to Daimler’s appointment of an out-of-state dealer.