PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
VOLVO TRADEMARK HOLDING
AKTIEBOLAGET, a Swedish
corporation; VOLVO CONSTRUCTION
EQUIPMENT NORTH AMERICA, a
Delaware corporation; CHAMPION
ROAD MACHINERY LIMITED, a
Canadian corporation,
Plaintiffs-Appellees,
v.
CLARK MACHINERY COMPANY, an
Arkansas corporation,
Defendant-Appellant, No. 06-2091
and
CLM EQUIPMENT COMPANY,
INCORPORATED, a Texas corporation;
FUTURE EQUIPMENT COMPANY,
INCORPORATED, a Texas corporation;
AIS CONSTRUCTION EQUIPMENT
CORPORATION, a Michigan
corporation; NUECES FARM CENTER,
INCORPORATED, d/b/a Nueces Power
Equipment, a Delaware corporation,
Defendants.
2 VOLVO v. CLARK MACHINERY
VOLVO CONSTRUCTION EQUIPMENT
NORTH AMERICA, a Delaware
corporation; CHAMPION ROAD
MACHINERY LIMITED, a Canadian
corporation,
Plaintiffs-Appellants,
and
VOLVO TRADEMARK HOLDING
AKTIEBOLAGET, a Swedish
corporation,
Plaintiff,
v.
CLARK MACHINERY COMPANY, an No. 06-2145
Arkansas corporation,
Defendant-Appellee,
and
CLM EQUIPMENT COMPANY,
INCORPORATED, a Texas corporation;
FUTURE EQUIPMENT COMPANY,
INCORPORATED, a Texas corporation;
AIS CONSTRUCTION EQUIPMENT
CORPORATION, a Michigan
corporation; NUECES FARM CENTER,
INCORPORATED, d/b/a Nueces Power
Equipment, a Delaware corporation,
Defendants.
Appeals from the United States District Court
for the Western District of North Carolina, at Asheville.
Lacy H. Thornburg, District Judge.
(1:00-cv-00238)
Argued: September 27, 2007
Decided: December 20, 2007
VOLVO v. CLARK MACHINERY 3
Before TRAXLER and KING, Circuit Judges, and
Benson E. LEGG, Chief United States District Judge for the
District of Maryland, sitting by designation.
Affirmed by published opinion. Judge King wrote the opinion, in
which Judge Traxler and Judge Legg joined.
COUNSEL
ARGUED: Scott E. Korzenowski, DADY & GARNER, P.A., Minne-
apolis, Minnesota, for Appellant/Cross-Appellee. Michael J. Lock-
erby, FOLEY & LARDNER, L.L.P., Washington, D.C., for
Appellees/Cross-Appellants. ON BRIEF: J. Michael Dady, Ronald
K. Gardner, DADY & GARNER, P.A., Minneapolis, Minnesota;
Edward L. Bleynat, Jr., FERIKES & BLEYNAT, P.L.L.C., Asheville,
North Carolina, for Appellant/Cross-Appellee. Vineeta A. Bathia,
FOLEY & LARDNER, L.L.P., Washington, D.C., for
Appellees/Cross-Appellants.
OPINION
KING, Circuit Judge:
This civil action was initiated more than seven years ago by three
heavy equipment manufacturers (collectively, "Volvo")1 against sev-
eral equipment dealers, and has involved numerous claims, counter-
claims, and defenses arising from a contract dispute between the
parties. While originally pending in the Western District of North
1
The parties generally referred to as "Volvo" are Volvo Construction
Equipment North America, Volvo Trademark Holding Aktiebolaget, and
Champion Road Machinery Limited. Because Volvo Construction
Equipment North America and Champion Road Machinery Limited are
the only appellants in the cross-appeal, our use of the term "Volvo" in
some circumstances is limited to them.
4 VOLVO v. CLARK MACHINERY
Carolina, the district court granted judgment on the pleadings against
the defendants, including Clark Machinery Company, an Arkansas
corporation ("Clark"). Clark and two other defendants (collectively,
the "Dealers")2 appealed from the judgment, and we affirmed the dis-
trict court’s decision in all aspects except one: its judgment for Volvo
on Clark’s claims under the Arkansas Franchise Practices Act (the
"Arkansas Act") for termination of its franchise without good cause.
See Volvo Constr. Equip. N. Am., Inc. v. CLM Equip. Co., Inc., 386
F.3d 581, 611 (4th Cir. 2004) (vacating judgment on Clark’s claims
under Arkansas Act and remanding for further proceedings).
On remand, the district court entered summary judgment against
Volvo with respect to its liability to Clark under the Arkansas Act.
During the ensuing trial on damages, the jury declined to make a
damages award to Clark. The court subsequently denied Clark’s
requests for a new trial and for attorneys’ fees. In its appeal, Clark
seeks relief from the court’s orders denying its motions for a new trial
and for attorneys’ fees. By its cross-appeal, Volvo challenges the dis-
trict court’s summary judgment decision. Because we conclude that
the court did not err in the remand proceedings, we affirm.
I.
A.
The factual and procedural underpinnings of this matter were
explained in detail in our prior decision. See Volvo Constr. Equip.,
386 F.3d at 587-91. In short, the parties’ dispute revolves around the
termination of agreements (the "Dealer Agreements") under which
Champion Road Machinery Limited ("Champion") had supplied large
earth-moving motor graders ("Champion Motor Graders") to Clark
and the other Dealers for resale. After purchasing Champion in 1997,
Volvo decided that it could compete more effectively with other man-
ufacturers if it marketed motor graders under a single brand name
(i.e., Volvo) and through a single dealer network (i.e., that of Volvo).
Volvo thus proceeded to "Volvoize" its products by reengineering and
rebranding Champion Motor Graders for sale under the VOLVO
2
The "Dealers" — in addition to Clark — are CLM Equipment Com-
pany, Incorporated, and Future Equipment Company, Incorporated.
VOLVO v. CLARK MACHINERY 5
trademark, and to implement a "Dealer Rationalization" plan by inte-
grating the Volvo and Champion dealer networks. In 2000, the Deal-
ers responded to the "Volvoization" and "Dealer Rationalization"
efforts by demanding that Volvo continue to supply them with motor
graders manufactured by Volvo at the former Champion factory. The
Dealers, however, were not selected as authorized sellers of such
motor graders, and were notified by Volvo that it would no longer
supply them with Champion Motor Graders. More particularly, Volvo
notified Clark on October 10, 2000, that its Dealer Agreement would
be terminated on January 9, 2001.
Also on October 10, 2000, Volvo filed its complaint in the Western
District of North Carolina (the "North Carolina Litigation"), seeking
a declaration that, pursuant to the Dealer Agreements, it was not
obliged to continue supplying Champion Motor Graders to Champion
dealers. The complaint was later amended to name Clark as a defen-
dant, along with (among others) the previously named Dealers. On
March 20, 2001, the Dealers filed a separate action against Volvo in
the Eastern District of Arkansas (the "Arkansas Litigation"). The
Arkansas court subsequently transferred the Arkansas Litigation to
the Western District of North Carolina, and the parties thereafter con-
sented to consolidation of the Arkansas Litigation with the North Car-
olina Litigation in the North Carolina court. Notably, Clark and the
other Dealers asserted twelve counterclaims in the North Carolina Lit-
igation that mirrored their twelve claims in the Arkansas Litigation.
Among them were Clark’s claim and counterclaim based on Volvo’s
alleged violation of the Arkansas Act.
On December 13, 2002, the district court in North Carolina filed
the opinion from which the original appeal and our prior decision
emanated. See Volvo Trademark Holding Aktiebolaget v. CLM Equip.
Co., Inc., 236 F. Supp. 2d 536 (W.D.N.C. 2002) (the "Opinion"). By
its Opinion, the court granted Volvo partial judgment on the plead-
ings. The court determined, inter alia, that Volvo’s refusal to supply
the Dealers with Champion Motor Graders did not breach the Dealer
Agreements because each agreement contained a "Without Cause
Provision" authorizing termination of a dealership without cause. In
addition, the court concluded that the Dealers were not protected by
state dealer protection statutes (the "State Statutes") — including the
Arkansas Act invoked by Clark — which, according to the Dealers,
6 VOLVO v. CLARK MACHINERY
trumped the Without Cause Provision and precluded Volvo from ter-
minating the Dealer Agreements without cause. Volvo subsequently
dismissed its remaining claims, rendering the Opinion appealable.
B.
The Dealers appealed and, by our prior decision of October 8,
2004, we concluded — contrary to the contention of the Dealers —
that the district court committed no error in exercising jurisdiction in
the North Carolina Litigation. See Volvo Constr. Equip., 386 F.3d at
592-95. Next, we rejected the Dealers’ assertion that the court erred
in ruling that Volvo had not breached it contractual obligations by ter-
minating the Dealer Agreements, id. at 595-99, as well as the Dealer’s
contention that Volvo was nevertheless estopped from breaching cer-
tain oral promises it had made after the Dealer Agreements were exe-
cuted, id. at 599. Finally, we addressed the Dealers’ position that,
notwithstanding the Without Cause Provision in the Dealer Agree-
ments, Volvo was prohibited by the State Statutes from terminating
the Agreements without cause. Id. at 599-611. Ultimately, we deemed
only Clark to be entitled to statutory protection, specifying that such
protection arose under the Arkansas Act. Id. at 611.
Our discussion of the applicability of the Arkansas Act focused, in
relevant part, on Volvo’s contention that Clark could not rely on the
Act because a "Choice-of-Law Provision" in its particular Dealer
Agreement provided that "the rights, duties and obligations of the par-
ties . . . shall be determined according to the laws of . . . South Caro-
lina." Volvo Constr. Equip., 386 F.3d at 601 & n.18. Clark had
countered that the Choice-of-Law Provision was invalid, in that the
law selected thereunder (i.e., that of South Carolina) contravened a
fundamental policy of Clark’s home state of Arkansas. Id. at 601.
Before assessing whether the Arkansas Act constituted a fundamental
policy of Arkansas and thus governed Clark’s Dealer Agreement, we
considered the issue of whether Clark was a protected party under the
Act. Id. at 604. In so doing, we observed the following:
In the district court, Volvo maintained that Clark was not
protected by the Arkansas Act . . . because, pursuant to the
Choice-of-Law Provision, Clark’s . . . Dealer Agreement[ ]
[is] governed by South Carolina law. Volvo did not, how-
VOLVO v. CLARK MACHINERY 7
ever, assert that the statute[ ] in question, by [its] terms,
fail[s] to apply to Clark’s . . . Dealer Agreement[ ]. Absent
the Choice-of-Law Provision, Clark could state a claim
under the Arkansas Act . . . .
Id. at 606.
We then turned to an assessment of whether the Arkansas Act
embodied a fundamental state policy, recognizing that "North Caro-
lina will not honor a choice-of-law provision if the law of the chosen
state is contrary to the fundamental policy of a state possessing a
greater interest in the issue than the chosen state." Volvo Constr.
Equip., 386 F.3d at 607.3 We concluded that the Arkansas Act indeed
embodied a fundamental state policy, explaining that the Act "render-
[ed] the termination of a dealer agreement, absent good cause, a viola-
tion of the fundamental policy of Arkansas," and that Arkansas had
"a materially greater interest than South Carolina in determining
whether a dealer agreement between an Arkansas dealer and an out-
of-state manufacturer can be terminated without cause." Id. at 610.
Having so ruled, we addressed Volvo’s assertion that, even if Clark’s
Dealer Agreement was governed by the Arkansas Act, Volvo did not
violate the Act because the Agreement was terminated for good
cause. Id. We determined that "a genuine factual dispute exists as to
whether Volvo possessed good cause, under the Arkansas Act, to ter-
minate Clark’s Dealer Agreement." Id. at 611. By our prior decision,
we therefore remanded "Clark’s statutory claim (in the Arkansas Liti-
gation) and its statutory counterclaim (in the North Carolina Litiga-
tion) for the district court’s assessment of whether, pursuant to the
Arkansas Act, Volvo terminated Clark’s Dealer Agreement without
good cause." Id.
C.
3
In considering the contentions surrounding the State Statutes, we were
faced with the issue of whether to apply the substantive law (including
choice-of-law rules) of North Carolina or Arkansas. See Volvo Constr.
Equip., 386 F.3d at 599-601. We chose the law of North Carolina, as the
state in which the district court sits, because North Carolina law was suf-
ficiently similar to Arkansas law "that the outcome of this dispute would
be the same under either set of rules." Id. at 600.
8 VOLVO v. CLARK MACHINERY
On February 16, 2006, during the remand proceedings, the district
court granted summary judgment to Clark on its claims under the
Arkansas Act, concluding, inter alia, that Volvo had terminated the
Dealer Agreement without good cause. See Volvo Trademark Holding
Aktiebolaget v. AIS Constr. Equip. Corp., 416 F. Supp. 2d 404
(W.D.N.C. 2006). The court then scheduled the issue of damages for
trial. On July 12, 2006, the jury returned a verdict finding that, despite
Volvo’s violation of the Arkansas Act, Clark had suffered no actual
damages. On July 14, 2006, the court entered judgment on the verdict,
specifying that Clark was not entitled to damages.
On July 28, 2006, Clark filed a motion for a new trial based on sev-
eral contentions of error, and, on August 2, 2006, it filed a motion,
pursuant to the Arkansas Act, for attorneys’ fees. On September 8,
2006, the district court denied Clark’s motion for a new trial. Thereaf-
ter, on October 2, 2006, the court rejected Clark’s motion for attor-
neys’ fees. Clark has timely appealed the court’s denial of its requests
for a new trial and for attorneys’ fees, and Volvo has cross-appealed
from the court’s summary judgment award in favor of Clark. We pos-
sess jurisdiction pursuant to 28 U.S.C. § 1291.
II.
Volvo’s contentions on cross-appeal concern the district court’s
award of summary judgment to Clark on its claims under the Arkan-
sas Act. Because reversal of the summary judgment award would ren-
der moot the contentions made in Clark’s appeal, we first address
Volvo’s cross-appeal. Volvo makes two appellate contentions: (1) the
district court erred in concluding that Volvo was precluded from rais-
ing the issue of the applicability of the Arkansas Act on remand, and
(2) the court erred in concluding that Volvo terminated Clark’s Dealer
Agreement without good cause. We assess Volvo’s contentions in
turn.
A.
Volvo first contends that the district court erroneously applied the
"mandate rule" in deciding on remand that Volvo was precluded from
asserting that the Arkansas Act did not apply to Clark’s Dealer Agree-
ment. We are obliged to review de novo a district court’s interpreta-
VOLVO v. CLARK MACHINERY 9
tion of an appellate mandate. See S. Atl. Ltd. P’ship of Tenn., LP v.
Riese, 356 F.3d 576, 583 (4th Cir. 2004) (explaining that "[w]e
review de novo . . . whether a post-mandate judgment of a district
court contravenes the mandate rule, or whether the mandate has been
scrupulously and fully carried out" (internal quotation marks omit-
ted)).
On remand, Volvo asserted that the existence of a "franchise" is an
element of any claim for violation of the Arkansas Act, and that the
burden was on Clark to show that the Dealer Agreement granted it a
franchise under the Act. See Ark. Code Ann. § 4-72-203 (West 2007)
(specifying that "this subchapter applies only to a franchise"). Volvo
maintained that Clark had not satisfied this burden, and thus that the
Act did not apply to Clark’s Dealer Agreement. Without reaching the
merits of this contention, the district court concluded that Volvo was
precluded from pursuing it on remand. In so ruling, the district court
relied on the following language from our prior decision:
"In the district court, Volvo maintained that Clark was not
protected by the Arkansas Act . . . because, pursuant to the
Choice-of-Law Provision, Clark’s . . . Dealer Agreement[ ]
[is] governed by South Carolina law. Volvo did not, how-
ever, assert that the statute[ ] in question, by [its] terms,
fail[s] to apply to Clark’s . . . Dealer Agreement[ ]. Absent
the Choice-of-Law Provision, Clark could state a claim
under the Arkansas Act . . . ."
Volvo Trademark, 416 F. Supp. 2d at 409 (quoting Volvo Constr.
Equip., 346 F.3d at 606). The district court then explained that "[t]he
Fourth Circuit would not have considered whether the Act constituted
fundamental policy unless and until it found that Clark was a ‘pro-
tected part[y] under [that] statute[ ].’" Id. (quoting Volvo Constr.
Equip., 346 F.3d at 604). Invoking the mandate rule, the district court
further explained that, by determining that the Arkansas Act consti-
tuted a fundamental state policy, this Court had foreclosed Volvo’s
argument that the Act does not offer protection to Clark. Id. Addition-
ally, the district court observed that Volvo had not raised the franchise
element issue either before it or in this Court prior to the remand pro-
ceedings. Id.
10 VOLVO v. CLARK MACHINERY
In its cross-appeal, Volvo contends that the district court errone-
ously applied the mandate rule in the remand proceedings and that our
prior decision did not absolve Clark of its burden of proving the fran-
chise element of its claim under the Arkansas Act. The mandate rule
is a specific application of the law of the case doctrine. See United
States v. Bell, 5 F.3d 64, 66 (4th Cir. 1993). The rule "forecloses liti-
gation of issues decided by the district court but foregone on appeal
or otherwise waived, for example because they were not raised in the
district court." Id. Significantly, as the district court recognized,
Volvo did not raise the franchise element issue in the earlier proceed-
ings, either in the district court or in this Court. See Volvo Constr.
Equip., 386 F.3d at 606 ("Volvo did not . . . assert that the [Arkansas
Act], by [its] terms, fail[ed] to apply to Clark’s . . . Dealer Agree-
ment[ ]."); Volvo Trademark, 416 F. Supp. 2d at 409 ("Volvo did not
raise the issue of non-application before this Court in the first pro-
ceeding . . . ."). As the district court also recognized, under the man-
date rule a remand proceeding is not the occasion for raising new
arguments or legal theories. Consequently, it properly concluded that
Volvo had waived its contention on the franchise element and, as a
result, was not entitled to raise it on remand.
Furthermore, absent exceptional circumstances, the mandate rule
"compels compliance on remand with the dictates of a superior court
and forecloses relitigation of issues expressly or impliedly decided by
the appellate court." Bell, 5 F.3d at 66. Our prior opinion expressly
provided that "[a]bsent the Choice-of-Law Provision, Clark could
state a claim under the Arkansas Act." Volvo Constr. Equip., 386 F.3d
at 606. By concluding that Clark could state a claim under the Arkan-
sas Act, we necessarily recognized that Clark’s Dealer Agreement
granted it a franchise under the Arkansas Act.4
4
Volvo also maintains on cross-appeal that it was not obliged to raise
the franchise issue by the time the Opinion was filed in the original dis-
trict court proceedings, in that discovery had not concluded. The lan-
guage of our prior decision plainly indicated that we viewed the
applicability of the Arkansas Act to have been conceded by Volvo, aside
from its contention on the Choice-of-Law Provision. If Volvo was of the
view that we had resolved this issue prematurely, it could have so
asserted in a petition for rehearing. See 4th Cir. Local Rule 40(a).
VOLVO v. CLARK MACHINERY 11
B.
Volvo next contends that the district court erred in granting sum-
mary judgment to Clark on the basis of its conclusion that Volvo had
terminated Clark’s Dealer Agreement without good cause. As a gen-
eral proposition, we review de novo a district court’s award of sum-
mary judgment, viewing the facts in the light most favorable to the
non-moving party. See Lee v. York County Sch. Div., 484 F.3d 687,
693 (4th Cir. 2007). An award of summary judgment may be appro-
priately made only "if the pleadings, depositions, answers to interrog-
atories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that
the moving party is entitled to summary judgment as a matter of law."
Fed. R. Civ. P. 56(c).
The Arkansas Act includes a list of eight occurrences that consti-
tute "good cause" for termination or cancellation of a franchise. See
Ark. Code Ann. § 4-72-202 (West 2007).5 The district court held,
5
The Arkansas Act states that "[i]t shall be a violation of this subchap-
ter for a franchisor to . . . terminate or cancel a franchise without good
cause." Ark. Code Ann. § 4-72-204 (West 2007). Under the Arkansas
Act, "good cause" is defined as one of the following occurrences:
(A) Failure by a franchisee to comply substantially with the
requirements imposed upon him or her by the franchisor,
or sought to be imposed by the franchisor, which require-
ments are not discriminatory as compared with the require-
ments imposed on other similarly situated franchisees,
either by their terms or in the manner of their enforcement;
or
(B) The failure by the franchisee to act in good faith and in a
commercially reasonable manner in carrying out the terms
of the franchise; or
(C) Voluntary abandonment of the franchise; or
(D) Conviction of the franchisee in a court of competent juris-
diction of an offense, punishable by a term of imprison-
ment in excess of one (1) year, substantially related to the
business conducted pursuant to the franchise; or
(E) Any act by a franchisee which substantially impairs the
franchisor’s trademark or trade name; or
12 VOLVO v. CLARK MACHINERY
adopting Clark’s position, that this list constituted the exclusive
means by which a franchisor may terminate a franchise for good
cause under the Arkansas Act. Volvo acknowledges that it did not ter-
minate Clark’s Dealer Agreement for any of the specific reasons pro-
vided for in the Arkansas Act, but contends that those eight
occurrences are not an exclusive list of what constitutes good cause
for termination of a franchise. Appurtenant to this contention, Volvo
maintains that its reasons for termination, i.e., "Volvoization" and
"Dealer Rationalization," also constitute good cause for a franchise
termination under the Arkansas Act.
As the district court aptly recognized, Volvo’s contention presents
an issue of statutory construction, and a federal court sitting in diver-
sity is obliged to apply state law principles to resolve such a question,
utilizing such principles as enunciated and applied by the state’s high-
est court. See Volvo Trademark, 416 F. Supp. 2d at 410 (citing Coo-
per Distrib. Co., Inc. v. Amana Refrigeration, Inc., 63 F.3d 262, 274
(3d Cir. 1995)). The Arkansas Supreme Court has not resolved the
statutory issue raised by Volvo, and we are therefore obliged to inter-
pret the Arkansas Act by applying the principles of statutory construc-
tion that would guide an Arkansas court in making such a decision.
See CTI/DC, Inc. v. Selective Ins. Co. of Am., 392 F.3d 114, 118 (4th
Cir. 2004).
The district court made a thorough explanation of its ruling on this
issue. According to the applicable Arkansas legal principles, if a stat-
ute is clear, it is to be given its plain meaning, and courts are not to
(F) The institution of insolvency or bankruptcy proceedings by
or against a franchisee, or any assignment or attempted
assignment by a franchisee of the franchise or the assets of
the franchise for the benefit of the creditors; or
(G) Loss of the franchisor’s or franchisee’s right to occupy the
premises from which the franchise business is operated; or
(H) Failure of the franchisee to pay to the franchisor within ten
(10) days after receipt of notice of any sums past due the
franchisor and relating to the franchise.
Id. § 4-72-202.
VOLVO v. CLARK MACHINERY 13
search for any legislative intent. See Volvo Trademark, 416 F. Supp.
2d at 411 (citing Hinchery v. Thomasson, 727 S.W.2d 836 (Ark.
1987)). Arkansas also subscribes to the legal principle of expressio
unius est exclusio alterius, meaning "‘that the express designation of
one thing may properly be construed to mean the exclusion of
another.’" Id. (quoting Gazaway v. Greene County Equalization Bd.,
864 S.W.2d 233, 236 (Ark. 1993)).
Applying these controlling principles to the Arkansas Act, the dis-
trict court concluded that good cause for termination of a franchise
under the Act is limited to the eight occurrences specifically enumer-
ated therein. See Volvo Trademark, 416 F. Supp. 2d at 412. The court
deemed the Arkansas Act to be clear on its face, and determined that
the express designation of those eight occurrences precluded any
other circumstance from constituting good cause for a franchise ter-
mination. Id. at 411. As a result, the court concluded that the Arkan-
sas Supreme Court would have held that the "circumstances
constituting ‘good cause’ for termination under the [Arkansas Act]
are limited to those expressly designated in" the Act and, because
Volvo’s actions did not fall under one of the enumerated occurrences,
it had terminated Clark’s Dealer Agreement in violation of the Arkan-
sas Act. Id. at 412, 416-17.
Volvo maintains that the district court’s interpretation of the
Arkansas Act on this point contravenes the dormant commerce clause.6
It further asserts that resolution of this issue is controlled by our deci-
6
In explaining the dormant commerce clause, we have recently spelled
out the following:
The Commerce Clause grants Congress the power "[t]o regulate
Commerce . . . among the several States." U.S. Const. art. I, § 8,
cl. 3. Although the Clause speaks only of congressional power,
the Supreme Court since 1852 has construed the Commerce
Clause as incorporating an implicit restraint on state power in the
absence of congressional action — hence the notion of a "dor-
mant" Commerce Clause. The dormant Commerce Clause thus
limits the power of the States to erect barriers against interstate
trade.
Yamaha Motor Corp., U.S.A. v. Jim’s Motorcycle, Inc., 401 F.3d 560,
567 (4th Cir. 2005) (internal citations and quotation marks omitted).
14 VOLVO v. CLARK MACHINERY
sion in Central GMC, Inc. v. General Motors Corp., 946 F.2d 327
(4th Cir. 1991). Volvo contends that, in Central GMC, we established
as a matter of law that any "good cause" provision of a franchise stat-
ute that does not permit either market withdrawals or the franchisor’s
business interests to constitute good cause will contravene the dor-
mant commerce clause. We agree with the district court, however,
that Volvo’s reliance on Central GMC is misplaced.
The Central GMC decision involved a Maryland statute regulating
the termination of franchises. Central GMC was a GMC Truck
franchisee that sold and serviced light, medium, and heavy duty GMC
trucks in Maryland. See 946 F.2d at 329. In 1986, GMC decided to
discontinue its heavy duty truck line due to losses it had suffered
since the 1970s. Id. Rather than liquidating its heavy duty truck oper-
ations, however, GMC transferred its assets to a new corporation
formed with AB Volvo, a Swedish automobile manufacturer. Id. By
the end of 1987, GMC had discontinued the manufacturing and mar-
keting of heavy duty trucks. Id. Subsequently, Central GMC brought
an action against GMC, alleging that Central GMC owned a franchise
for GMC heavy duty trucks and that this franchise had been termi-
nated by GMC in contravention of the Maryland franchise statute. Id.
at 330.
The main issue in Central GMC was whether a single franchise had
been granted by GMC to the franchisee (Central GMC) for the sale
of all of the GMC truck product lines, or whether, on the other hand,
the light, medium, and heavy duty GMC truck lines each constituted
a separate franchise. See 946 F.2d at 330. Central GMC contended
that it held separate franchises for each of these three lines and, thus,
that GMC’s discontinuance of its heavy duty truck line constituted a
termination of that franchise. Id. We concluded that Central GMC
held only a single franchise, however, and that the withdrawal of the
heavy duty truck line by GMC could not be treated as a franchise ter-
mination because, inter alia, "a reading of the Maryland statute equat-
ing the discontinuance of a product line with impermissibly
terminating a franchise would raise significant commerce clause con-
cerns." Id. at 332.
As this aspect of the Central GMC decision demonstrates, we
observed that commerce clause concerns would arise from a ruling
VOLVO v. CLARK MACHINERY 15
that the discontinuation of a single product line that is part of an over-
all franchise constitutes the improper termination of a separate fran-
chise. Significantly, we did not, in Central GMC, conclude that such
an event would violate the dormant commerce clause. Such a circum-
stance is readily distinguishable from this case, where Volvo termi-
nated its entire Dealer Agreement with Clark, not just one product
line that was part of the overall larger Dealer Agreement. As a result,
Central GMC is not controlling.7
In these circumstances, the district court properly concluded that
the enumerated occurrences in the Arkansas Act are the exclusive
means by which a franchisor can terminate a franchise for "good
cause," and that this interpretation does not contravene the dormant
commerce clause. We therefore affirm the district court’s ruling on
this aspect of Volvo’s cross-appeal.
III.
Clark raises two separate contentions in its appeal — specifically,
that the district court erred in failing to award a new trial because of
erroneous jury instructions, and that it also erred in denying Clark’s
motion for attorneys’ fees. We address these contentions in turn.
A.
Clark sought a new trial in the district court, asserting that the court
had erred in refusing to instruct the jury that Volvo had violated the
Arkansas Act by terminating the Dealer Agreement without "good
cause," and because the court had erroneously instructed the jury on
the issue of mitigation of damages. We review a trial court’s jury
instructions for abuse of discretion, and it is well settled that a trial
7
Volvo contends that, even if Central GMC is inapplicable in this case,
the district court’s interpretation of the Arkansas Act yet violates the dor-
mant commerce clause. The district court concluded, however, that its
interpretation of the Act was not a per se violation of the commerce
clause, nor placed an excessive burden on interstate commerce under
Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970). See Volvo Trade-
mark, 416 F. Supp. 2d at 414-17. We agree with the district court in this
respect.
16 VOLVO v. CLARK MACHINERY
court has broad discretion in framing its instructions to a jury. See
Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 526
n.11 (4th Cir. 2003). Thus, the jury instructions will not furnish a
basis for reversal of an adverse verdict so long as, taken as a whole,
they "adequately state the controlling law." Id. (internal quotation
marks omitted). We nevertheless review de novo claims that the jury
instructions failed to correctly state the law. United States v. Cherry,
330 F.3d 658, 665 (4th Cir. 2003).
1.
Of importance here, the trial court’s instructions to the jury on the
franchise termination issue included the following:
It has been previously determined that the agreement was
terminated by Volvo in violation of the Arkansas Franchise
Practices Act.
Now, the question of whether the Dealership Agreement
was terminated, or whether such termination violated the
Franchise Practices Act, is not before you. That decision has
been made.
Your sole function in this trial is to determine what amount
of damages, if any, Clark is entitled to receive as a result of
that termination.
J.A. 1579.8 Clark asserts on appeal that the court’s failure to instruct
on the specifics of Volvo’s unlawful acts resulted in the jury being
given an inaccurate statement of law and, consequently, that a new
trial is mandated.
Although Clark contends that the instructions included an errone-
ous statement of the applicable legal principles, it has failed to dem-
onstrate how the instructions were legally inaccurate. It asserts only
that the court should have explained in further detail that Volvo had
8
Citations to "J.A. ____" refer to the Joint Appendix filed by the par-
ties in this appeal.
VOLVO v. CLARK MACHINERY 17
violated the Arkansas Act by terminating the Clark Dealer Agreement
without "good cause" and that the instructions, as given, were imper-
missibly confusing. Clark fails to specify how the absence of further
details in the instructions constitutes an erroneous statement of law.
In these circumstances, we assess this challenge for abuse of discre-
tion only.
As spelled out above, problems in jury instructions will not warrant
reversal of a jury verdict so long as, taken as a whole, the instructions
adequately state the controlling legal principles. And, it is clear that
the instructions challenged by Clark met that test. The court explained
to the jury that Volvo had terminated the Dealer Agreement in viola-
tion of the Arkansas Act, and, as a result, the jury’s only obligation
was to determine the damages Clark was entitled to, if any. In this
context, the court did not abuse its discretion.
2.
Clark next asserts that the district court erred in instructing the jury
to consider Clark’s failure to mitigate its damages. Because the
instructions to the jury on damages were adequate, and the jury con-
cluded that Clark was not entitled to recover any damages, the mitiga-
tion of damages instruction could be, at most, harmless error, in that
it was unnecessary for the jury to reach the mitigation issue. See S.
Atl. Ltd. P’ship of Tenn., LP v. Riese, 284 F.3d 518, 530 (4th Cir.
2002) (explaining that "[e]ven if instructions are flawed, there can be
no reversal unless the error seriously prejudiced the challenging
party’s case").
B.
Finally, Clark maintains that the district court erred in denying its
motion for attorneys’ fees. We review such a ruling for abuse of dis-
cretion. See Retail Servs. Inc. v. Freebies Publ’g, 364 F.3d 535, 550
(4th Cir. 2004) (citing People for the Ethical Treatment of Animals
v. Doughney, 263 F.3d 359, 370 (4th Cir. 2001)).
The damages provision of the Arkansas Act controls the attorneys’
fees issue and states: "Any franchisee who is harmed by a violation
of any other section of this subchapter shall be entitled to recover
actual damages in a civil action and, where appropriate, obtain
18 VOLVO v. CLARK MACHINERY
injunctive relief in addition to reasonable attorneys’ fees and costs of
litigation." Ark. Code Ann. § 4-72-208 (West 2007) (emphasis
added). In assessing this provision, the district court, in its Order of
October 2, 2006, concluded that the words "where appropriate" modi-
fied both "injunctive relief" and a potential award of attorneys’ fees,
committing such an award to the discretion of the court. See J.A.
1618. The district court concluded that a party could recover attor-
neys’ fees in the absence of a damages award, but that, based simply
on a violation of the Act, there was no automatic entitlement to such
an award. Id. at 1617. The court then concluded that a decision on
attorneys’ fees was in its discretion, but that Clark, in the circum-
stances of this case, was not entitled to recover such an award. Id.
On appeal, Clark contends that the term "harmed" is not synony-
mous with the words "suffered damages," and thus, even though the
jury found against it on damages, it is entitled to an award of attor-
neys’ fees. Furthermore, Clark asserts that, in interpreting the attor-
neys’ fees provision of the Act, the "and" that separates the phrase
"where appropriate, injunctive relief," from the phrase "reasonable
attorneys’ fees and costs of litigation," signals an intention that the
"where appropriate" language applies to injunctive relief only, and the
"shall be entitled to" terminology applies to the phrase "reasonable
attorneys’ fees and costs." On this reasoning, Clark asserts that the
Arkansas Act mandated the district court to grant its motion for attor-
neys’ fees.
Clark’s argument on this point is unpersuasive. As explained by the
district court, the attorneys’ fees provision plainly reserves the issue
of whether to make an award of attorneys’ fees to the discretion of
the court. Id. at 1618. Exercising its discretion, the district court con-
cluded that Clark had not satisfied its burden of showing how it had
been "harmed" by Volvo’s actions, and thus denied the motion for
attorneys’ fees. Id. at 1617. As a result, the court did not abuse its dis-
cretion in so ruling.
IV.
Pursuant to the foregoing, we affirm the district court’s summary
judgment award in favor of Clark, and we affirm as well the court’s
rulings in favor of Volvo on the new trial and attorneys’ fees issues.
AFFIRMED