U.S. Court of Federal Claims Finds Car Dealers State a Claim against Obama Administration for Unconstitutional Taking of their Franchises when Gov’t Used TARP Assistance to Force Automakers’ Restructuring

In Colonia Chevrolet v. US, Alley’s of Kingsport, Inc. v. US, and Spitzer Motor City, Inc. v. US, the Unitied States Court of Federal Claims allowed a Fifth Amendment takings case filed by former GM and Chrysler car dealers against the US Government to proceed past the pleading stage.   The car dealers theorized that the United States imposed its vision of manufacturer restructuring through the use of TARP assistance and the bankruptcy courts to terminate the car dealers’ franchises, resulting in an unconstitutional taking of property under the Fifth Amendment.  A copy of the Opinion denying the Government’s Motion to Dismiss is here.