In the lawsuit, Bellavia Gentile & Associates argue that the Obama administration required Chrysler to close down 789 dealerships in order to be eligible for TARP funding. Chrysler received $1.5 billion from the federal government between 2008 and 2009 as part of the TARP program.
Originally, 75 rejected Chrysler dealers joined the litigation commenced in February 2011. The lawsuit alleges that the federal government violated the Fifth Amendment rights of the rejected dealers when it compelled both GM and Chrysler to shut down nearly 25 percent of their dealerships nationwide as a condition of receiving the TARP funds and saving the U.S. economy from devastation if these auto manufacturers liquidated. Specifically, the original lawsuit alleges that the government was in violation of the “Takings” clause of the Fifth Amendment which can be invoked if the government seizes the private property of its citizens for the public good — in this case, saving the U.S. economy.
After the government brought a Motion to Dismiss the complaint before the Federal Court of Claims, on February 27, 2012, Judge Robert H. Hodges, Jr. denied the government’s Motion to Dismiss and ruled in favor of the plaintiffs. In his ruling, Judge Hodges stated that the plaintiffs had, in fact, stated a viable cause of action against the government and further ordered that the case proceed with discovery which may include massive document production, as well as depositions of former Chrysler employees and members of the Obama administration involved with the TARP program.
After the decision of Judge Hodges, a groundswell of interest by other rejected dealers not originally in the lawsuit resulted in the need to file the amended complaint. “After Judge Hodges found that we had stated a valid cause of action, it was our goal to add additional Chrysler dealers to our lawsuit. The decision by Judge Hodges gave our case significant credibility,”
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