Chrysler argues the law is pre-empted by federal bankruptcy laws and cited cited an August decision by the court against a group of dealers seeking shelter under state law.
If not blocked, the Colorado law would make Chrysler (as well as GM) give dealerships the right of first refusal if the company wants to reopen a point in the rejected dealer's old market. For the dealerships not reinstated, Chrysler must either reinstate or compensate the closed dealership.
"The Colorado dealer law attempts to compel new Chrysler to offer rejected dealers any planned dealer establishments or relocations rather than awarding them to existing dealers whose dealer agreements and relationships were specifically and strategically selected and assumed," Chrysler says in its complaint, cited by Autonews.
The issue is complicated by arbitration offered to rejected dealerships, with eight of the 14 former Chrysler representatives seeking arbitration.
Last week, the State of North Carolina decided to drop its efforts to impose a similar law, after an agreement between the two sides was approved by the Bankruptcy Court. Currently, Chrysler is pursuing similar courses of action in Maine, Illinois and Oregon.
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