Beyond Borders: The Rhode Island Supreme Court Confirms Extraterritorial Reach of the “Relevant Market Area” under the Dealer Law

Introduction

Rhode Island Truck Center, LLC (“RITC”), the state’s exclusive Freightliner truck dealer, challenged Daimler Trucks North America, LLC (“DTNA”) after the manufacturer granted another Freightliner franchise—Advantage Truck Raynham, LLC (“ATG Raynham”)—just across the state line in Raynham, Massachusetts. Because Raynham lies both (i) within 20 miles of RITC’s East Providence showroom and (ii) inside the broader “Area of Responsibility” (AOR) set out in the parties’ franchise agreement, RITC claimed that DTNA had to provide statutory notice and an opportunity to protest under R.I. Gen. Laws § 31-5.1-4.2(a).

The dealer board, the federal district court, and DTNA all maintained the statute could not operate outside Rhode Island without violating the dormant Commerce Clause. On appeal, however, the U.S. Court of Appeals for the First Circuit separated statutory construction from constitutional analysis and certified a single, threshold question to the Rhode Island Supreme Court: “Can a ‘relevant market area’ in § 31-5.1-4.2(a) extend beyond Rhode Island’s borders?” The state supreme court answered “Yes,” holding that the plain language of the Dealer Law unambiguously contemplates cross-border market areas.

Summary of the Judgment

Justice Long, writing for a unanimous court, concluded that:

The statutory definition—“the area within a radius of twenty (20) miles around an existing dealer or the area of responsibility defined in the franchise, whichever is greater” (§ 31-5.1-1(13))—contains no geographic limitation.
Because Rhode Island is only 37 miles wide, a 20-mile radius will frequently—indeed, almost inevitably—cross into another state; therefore, interpreting the term to stop at the border would nullify “every word” the General Assembly chose.
The presence of explicit in-state qualifiers in other sections (e.g., “dealer… in this state”) shows that the legislature knew how to confine provisions geographically when it wished; its omission here must be honored.
Silence about extraterritoriality is not an interpretive “trump card” overriding the unequivocal breadth supplied by “20 miles” and “whichever is greater.”
Because the language is clear, the court was not free to reshape it to avoid potential Commerce Clause questions; that constitutional issue remains for the federal courts later in the litigation.

Analysis

1. Precedents Cited

Although the decision breaks new ground on the Dealer Law’s reach, it is firmly rooted in established canons of statutory interpretation:

In re Request for Advisory Opinion (CRMC), 961 A.2d 930 (R.I. 2008) and Bartenwerfer v. Buckley, 598 U.S. 69 (2023) – Both teach that textual analysis “begins with the statute’s plain language.”
Johnson v. Johnson, 264 A.3d 835 (R.I. 2021) – Reaffirmed de novo review for statutory questions.
Lehigh Cement Co. v. Quinn, 173 A.3d 1272 (R.I. 2017) – Reiterated that no statutory word is surplusage.
Healy v. Beer Institute, 491 U.S. 324 (1989) and National Pork Producers Council v. Ross, 598 U.S. 356 (2023) – Commerce Clause cases referenced to frame, but not decide, the constitutional overlay.
Field v. Mans, 516 U.S. 59 (1995) – Cited for the proposition that statutory silence does not mandate a negative inference when other indicators point the opposite way.

While none of these authorities addressed dealer statutes directly, the Rhode Island court invoked them to illustrate how courts must respect both textual clarity and legislative purpose, resisting invitations to constrict language absent ambiguity.

2. Legal Reasoning

The court’s logic proceeds in five steps:

Plain Meaning Controls. The term “radius” is inherently geometric, unconcerned with political boundaries; paired with “whichever is greater,” it signals the legislature’s desire to establish a minimum economic buffer around a dealer, expandable by contract.
Statutory Context Confirms Reach. Other definitions include an “in this state” qualifier; the legislature’s deliberate omission here must be given effect (expressio unius/inclusio unius canon).
Geographic Reality Makes Border Limitation Implausible. A 20-mile radius in a 37-mile-wide state will almost always leak into Massachusetts or Connecticut. Reading a hidden border limitation would frustrate the legislature’s choice of distance.
Avoiding Surplusage. If borders truncated the radius, the phrase “whichever is greater” (and the possibility of expanded AORs) would add nothing—contravening the rule that courts must avoid interpretations that render language meaningless.
No Ambiguity, No Constitutional Balancing. Because the text is clear, the court deferred any dormant Commerce Clause analysis to the federal courts managing the larger dispute.

3. Impact of the Decision

Immediate Litigation Trajectory. The certified question returns to the First Circuit. DTNA must now defend its conduct under a statute that indisputably applies extraterritorially, shifting the fight to whether the statute, so applied, offends the Commerce Clause—a high doctrinal bar after National Pork Producers.
Regulatory Compliance for Manufacturers. Auto and truck OEMs doing business with Rhode Island dealers must treat the 20-mile/AOR rule as an enforceable notice obligation even when prospective locations lie entirely in another state.
Contract Drafting Dynamics. Manufacturers may revisit franchise agreements, wary that expansive AORs now translate into statutory “relevant market areas” with regulatory bite. Dealers, conversely, gain leverage to negotiate broader territories.
Administrative Practice. The Dealers’ Hearing Board must be prepared to evaluate “good cause” factors (market saturation, public interest, performance metrics) with data spanning multiple states. This likely increases evidentiary complexity in dealership protests.
Spill-Over to Other Rhode Island Statutes. The court’s emphasis on literal distances over political borders may influence interpretation of other laws using radius-based triggers (e.g., liquor licensing, environmental buffer zones).

Complex Concepts Simplified

Relevant Market Area (RMA) – Think of it as a protective “bubble” around an existing dealer. By default, that bubble is 20 miles in every direction, but the parties can enlarge it via contract. The court says the bubble is geographic space, not “Rhode Island-only” space.
Extraterritorial Application – When a state statute regulates conduct or circumstances occurring partly in another state.
Dormant Commerce Clause – A U.S. constitutional doctrine limiting states from passing laws that unduly burden or discriminate against interstate commerce. The Supreme Court sometimes strikes down “extraterritorial” regulations; sometimes it upholds them if they regulate in-state sales with incidental out-of-state effects.
Certified Question – A federal court may ask a state’s highest court to rule on an unsettled state-law issue. The answer becomes authoritative but leaves federal questions to the certifying court.
Statutory Surplusage Canon – Courts presume every word the legislature uses matters. Interpretations that make words redundant are disfavored.

Conclusion

Rhode Island’s Supreme Court has drawn a bright, textual line: the geographic concept embedded in “relevant market area” transcends state borders. The ruling expands the statutory shield provided to Rhode Island motor-vehicle dealers, compelling manufacturers to heed notice and protest procedures whenever proposed outlets fall within the 20-mile radius or negotiated AOR—even across state lines.

Beyond settling a pivotal statutory dispute, the opinion exemplifies disciplined textualism: when language is clear, courts will not rewrite it to sidestep hypothetical constitutional tension. The real-world effect—greater leverage for local dealers, increased compliance complexity for multi-state franchisors, and a potential test of dormant Commerce Clause jurisprudence—will unfold in the cases that follow, starting with the remanded proceedings in the First Circuit.