* This background info is from a newspaper column I wrote more than a year ago…

Volkswagen filed a federal lawsuit in December [of 2022] describing a bill that overwhelmingly passed both Illinois legislative chambers and was signed into law in 2021 as “crony capitalism at work: redistributive legislation that takes hundreds of millions of dollars from some (but not all) motor vehicle manufacturers and, for no public purpose, deposits that money directly into the pockets of politically favored Illinois [car] dealers.” The automaker claims the law is costing it an extra $10 million a year.

The bill in question (HB3940) was hotly opposed by automotive manufacturers. The law forces manufacturers to reimburse car dealers at a much higher rate (the auto industry says it’s a 50% higher rate) for warranty repairs. The bill came about after a labor dispute between dealerships and a mechanics union. They apparently decided to let the carmakers pay to resolve their monetary dispute, although the mechanics ended up on strike anyway because the dealers allegedly kept the new windfall initially instead of passing it through.

Just about every state legislator has multiple auto dealers in their districts, and Democrats have been eagerly allying themselves ever closer with organized labor in past years, so the bill hit a sweet spot with both parties and cleared the House 85-24 and then passed the Senate without a single dissenting vote a few weeks later.

The manufacturers say the law is costing the industry $240 million a year. Yes, you read that right. $240 million. Per year. They claim Illinois has the highest warranty repair costs in the nation. By far.

* Courthouse News Service…

Volkswagen Group of America, the stateside subsidiary of German auto giant Volkswagen, lost its year-and-a-half old lawsuit against the Illinois state government on Monday after a federal judge in Chicago decided it failed to properly state some of its claims and lacked standing to pursue others. […]

Deflating Volkswagen’s equal protection claim, [U.S. District Judge John Tharp Jr.] concluded newer electric vehicle manufacturers like Tesla, Lucid and Rivian are not bound by the Motor Vehicle Franchise Act or Multiplier Act amendment in the same way as the older company — in part because the younger businesses don’t make use of a traditional network of franchise dealerships like Volkswagen has for decades. […]

Tharp ruled that Volkswagen lacks standing to bring its First Amendment claims. He found the Multiplier Act doesn’t prohibit the company from raising prices in Illinois to cover its new expenses, nor does the law bar Volkswagen from telling customers that the Multiplier Act is the reason for the increased prices.

The opinion is here.