The United States Supreme Court case of New Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 99 S.Ct. 403, 58 L.Ed.2d361 (1978) is directly on point. The Court in Fox considered the California Automobile Franchise Act, which required approval by the California New Motor Vehicle Board before opening a new retail motor vehicle dealership within the market area of an existing franchise. .... In California, an automobile manufacturer who proposes to establish a new retail automobile dealership, or to relocate one, must first give notice to the Board and each of its existing franchisees within the ‘relevant market area’ (defined as ten miles from site of proposed new dealership). If any existing dealer protests within fifteen days, the Board is required to convene a hearing within sixty days to determine good cause for refusing to permit the establishment or relocation.
In ruling upon the antitrust issue, the Court noted that the California Legislature had enacted ‘a system of regulation, clearly articulated and affirmatively expressed, designed to displace unfettered business freedom in the matter of the establishment and relocation of automobile dealerships.’ Id. at 109, 99 S.Ct. at ——, 439 L.Ed.2d at 376. It, therefore, held that such regulation was outside the reach of the antitrust laws under the ‘state action’ exemption. See, Parker v. Brown, 317 U.S. 341, 63 S.Ct.307, 87 L.Ed. 315 (1943).
