warranty complaint, and requesting comments thereon. The next communication in the second category is a form letter from W-W to Reliable Volkswagen Sales of October 5, 1956, returning a vehicle order form for completion. The remaining communications in the second category, from W-W, are addressed either to Reliable Volkswagen Sales, Inc., Reliable Volkswagen Sales & Service, Inc. or to Reliable Volkswagen, and are generally of a character similar to those embraced in the first category; i.e., they are normal routine business correspondence appropriate to a relationship of wholesaler and retailer existing between the parties, and to the merchandise in which they dealt.
The nature of categories 3 and 4 is described in the statement of each of these categories, i.e., telegrams from W-W to Reliable concerning the delivery of vehicles, and written notices from W-W to Reliable relating to the allocation of vehicles. Typical of category 3 is a telegraphic request to Reliable to pick up a Volkswagen automobile from a Brooklyn pier. Exhibit 95, in category 4, is a notice from W-W to Reliable containing a break-down of Reliable's quota of Volkswagen automobiles for the production month of October 1955; and number 117, the last of that category, is a similar notice for the production month of July, 1957.
Exhibits 118 through 124 (category 5) are dealer lists sent out by W-W to the various Volkswagen automobile dealers in its distribution territory from February 15, 1955 to April 1, 1957.
Under date of November 26, 1957 Reliable Motor Sales Inc. wrote to W-W respecting Reliable's sale of a used Volkswagen automobile to one Loda, and reporting that Loda made various complaints which Reliable endeavored to satisfy but without success. The letter embodies Reliable's report to W-W of its handling of the matter.
Other letters from Reliable Motor Sales Inc. and Reliable Volkswagen Sales to W-W are embodied in Exhibits 125 through 168 (categories 6 and 7) which relate to problems arising between Reliable and its customers, out of warranties or otherwise, inspection coupons for new cars, and other routine communications rendered necessary by and appropriate to the respective distribution and sales functions being performed by each of the parties. Nothing contained in any of the exhibits in these two categories constitutes an expression or admission of any terms of a franchise contract fixing the legal rights and liabilities of the parties other than the disclosure that W-W was a distributor of Volkswagen automobiles, that Reliable was an authorized retail dealer in such automobiles, and that W-W sold to Reliable the automobiles and parts which Reliable resold to its customers under a warranty running to the ultimate customer, obligating both the wholesaler and the retailer.
Exhibits 169-179, category 8, are letters from W-W to customers of Reliable, in some of which W-W refers to Reliable as 'our dealer' but the contractual relationship, if any, between W-W and Reliable is not disclosed by any of these letters. Similarly, the notices referred to in category 9 addressed to 'All authorized Volkswagen dealers' relating to termination of dealerships, simply evidences (1) that Reliable was an authorized Volkswagen dealer and (2) that certain other dealerships authorized by W-W were terminated. The notice in each instance requested the dealer to whom it was sent to correct his dealer list accordingly.
Categories 10, 11 and 12 (exhibits 199-282) consist of circular letters from W-W addressed to all authorized Volkswagen dealers, and disclosing the general objective of improving the market for Volkswagen vehicles and protecting the business of authorized dealers in that product. For example, exhibit 199 is a circular letter dated July 30, 1954 addressed to all authorized Volkswagen dealers upon the subject of wholesale sales of Volkswagen vehicles to unauthorized dealers. This notice reports that Volkswagen cars have been finding their way into retail outlets not recognized by W-W as authorized dealers. The letter also states: 'Since it is the intention of World-Wide Automobiles Corp. to protect their authorized dealers, this letter will serve as definite and final notification that sales of Volkswagen vehicles to unauthorized dealers will not be tolerated.' Other circular letters report and suggest new features of Volkswagen cars, forms of advertising, increases in freight charges, color changes in vehicles, proportions of models to be expected from the factory, types of letterheads and forms, price change new car warranties, service coupons, credit part provisions, and other information necessary and convenient for the assistance and direction of retail dealers and obtainable only from World-Wide. In these three categories (10, 11 and 12) there is nothing which brings any item thereof or the aggregate of the same, within the statutory definition of franchise. The relationship between the parties is no different than that which usually and necessarily exists between any wholesaler and his retail outlets.
Category 13 is comprised of miscellaneous documents sent by W-W to its dealers in the New York, New Jersey, Pennsylvania and Connecticut area, puffing the Volkswagen automobile, promising delivery acceleration, assuring equity in distribution among dealers, and providing for financing, instructions on servicing, etc. In the earliest of these miscellaneous communications, i.e., exhibit 283, W-W states that 'each dealer will be protected against nearby competition because he will have an exclusive franchise in his area. In some cases this will cover hundreds of square miles.'
This single embodiment of the word 'franchise' does not suffice to bring any of the communications in category 13, or all of them in the aggregate, within the definition of franchise, as contained in Section 1221(b).
I find that the proof adduced fails to establish a 'franchise' within the definition of the term as contained in the Act, 15 U.S.C. § 1221(b). The answer to the second question posed by the plaintiff being in the negative, I need not, and do not decide the first question.
An order may be submitted dismissing the third count of this consolidated action.