Husqvarna Dealers Lose Fight to DMV and CARB

October 7, 2009
JC Hilderbrand
JC Hilderbrand
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Hilde is holding down the fort at MotoUSA's Southern Oregon HQ. With world-class dirt bike and ATV trails just minutes away, the hardest part is getting him to focus on the keyboard. Two wheels or four, it doesn't matter to our Off-Road Editor so long as it goes like hell in the dirt.

What happens when you get in a weenie-measuring competition with the government? More often than not it probably winds up with you getting the shaft, which is exactly what happened to Paul Lima of GP Motorcycles in San Diego, CA, and Moto Forza of Escondido, CA.

2010 Husqvarna TE510
Some Husqvarna motorcycles can be plated in some places. Make sure you know the regulations or face the music.

A misunderstanding in motorcycle registration by the Department of Motor Vehicles (DMV) resulted in the improper registration and illegal licensing of off-road motorcycles. According to Lima, after jumping through every hoop set up by DMV and California Air Resources Board (CARB) he and another SoCal dealer, Moto Forza, were ultimately forced to pay some fees in order to resolve the situation, which Lima claims was entirely their fault to begin with.

CARB turned out a press release stating that the two companies were fined $180,000 for their “illegal sales.” As Lima describes it, the monetary payments came as an agreement, though not particularly ideal on his part, and the press release from CARB was simply to add insult to injury – further propagating the misconception of a rowdy, law-breaking dirt bike community hell-bent on destroying our atmosphere.

At this point it’s a matter of he-said/she-said, but from my own experience with the DMV’s bureaucratic BS, lack of common sense and general unwillingness to act like decent human beings, I tend to find myself rooting for the Husqvarna dealers. Either way you look at it, the situation was a major pain in the butt for everyone involved. Members of the hard-hit motorcycle industry wound up forking major dough, seemingly unfairly, to government organizations that are a constant thorn in the sides of motorcyclists everywhere.

Should we expect anything else?

The following is from CARB with Paul Lima’s side of the story below.

The California Air Resources Board last month fined two San Diego-area motorcycle dealers $180,000 for illegal sales.
In 2006, ARB enforcement officers got an anonymous tip that San Diego-based GP Motorcycles and Moto Forza of Escondido, Calif., were illegally selling Husqvarna off-road motorcycles as on-road models. ARB investigators confirmed the allegations and took action.

“Companies that deliberately flout the law are often assessed higher penalties,” said ARB Chairman Mary D. Nichols. “Playing by the rules from the start is the most cost-effective, smart business plan any company can follow.”

GP Motorcycles and Moto Forza sold several dozen off-road motorcycles to customers who thought they were purchasing on-road models. Many of the bikes were outfitted with so-called “street-legal” kits and licensed for on-road use, both illegal in California.

ARB revoked all the on-road licenses and registrations for the illegal bikes sold by GP Motorcycles and Moto Forza. The motorcycle owners were permitted to return their license plates to the Dept. of Motor Vehicles for the appropriate off-road riding stickers and plates.

Off-highway vehicles do not meet federal motor vehicle safety standards — or ARB’s emission standards — required of on-road motorcycles. There are no street-legal kits or conversions that make an off-road motorcycle legal for on-road use or registration. A motorcycle is either certified by ARB for on-road use or off-road use.

California’s air pollution control efforts include regulating emissions from cars, trucks, buses and motorcycles. Smog can damage lungs, cause coughing and chest tightness, and worsen asthma symptoms while also affecting crop yields.

From Paul Lima, GP Motorcycles:

In response to a press release issued by the California Air Resources Board (CARB) as one of the effected parties, I feel compelled to comment to what was an inaccurate and very misleading press release issued by CARB.

In 2004 my dealership GP Motorcycles retailed some model year 2004 and 2005 Husqvarna off-road motorcycles. After the fact I learned that license plates had been issued for these units by the State of California Dept of Motor Vehicles. Questioning this after the first few plates were issued, I contacted DMV employees in charge of registrations. I was assured that the VIN numbers in question qualified for license plates. Subsequent to that conversation I shared this information with our customers – that they may receive a plate when the bike was registered.

As was always my practice, all DMV forms were filled out properly to the best of my knowledge. Never was a customer told that he or she was buying a street legal motorcycle nor that the motorcycle could become street legal.

Shortly thereafter we were visited by a CARB and a DMV investigator. The CARB investigator informed us initially that the problem was between the CARB and the DMV. However, that investigator also implied that it was the personal opinion of that investigator that it was my responsibility to make sure that the DMV gave me the right registrations. From that moment on I took great pains to correct the DMV every time they issued a plate in error for one of our retailed bikes. At all times I complied with all that was required of me, and in fact expended great time, effort and money to contact purchasers and to help retrieve and reregister erroneously registered and plated bikes. The DMV itself issued a letter to all purchasers stating the plates were in fact issued in error. All of the customers we spoke to understood the error was with DMV, and not with GP Motorcycles.

It’s important to point out that I was only one of several dealers affected by the DMV error. CARB initially insisted that I should pay $100,000 to make the matter “go away” but I refused, as I felt (and still feel) I had done nothing wrong, and frankly CARB was unable / unwilling to tell me just exactly what it was they felt I had done wrong. After all, every bike I sold was certified for sale by CARB. Convinced that I were in the right I sought legal counsel and began the fight that ultimately I was forced to abandon simply because it became too expensive to continue.

Four years, a pile of money invested, and many headaches later I bought my peace by settling with CARB. In stark contrast to the press release issued by CARB, the truth is I was never “fined by CARB” nor did I ever “modify” the bikes I sold. In short, I admitted no wrongdoing, and settled to avoid penalties on some very technical points that, were they proven, may have cost me my business. I bought my peace, case closed, and I was prepared to move on. Every motorcycle dealer in California was apprised of the settlement (deterrent value) both by CARB per their web site, the DMV’s web site and of course the motor cycle dealer’s association web site and publication.

Apparently that was not enough for CARB. I suppose I shouldn’t have been surprised, since it was clear they were willing to put me out of business in order to bring the DMV to task, but still the press release to the general public was shocking to me. It served no productive purpose that I could discern, since all dealerships were aware of the settlement. I can only conclude that the press release to the general public was a gratuitous attempt to damage my business – apparently as punishment for having taken them on. What is particularly galling is that the wording of the press release misrepresented what had transpired. CARB has tried to imply that I was fined by them (never happened) and that the fine was imposed for “modifying bikes” (again, never happened.) So to be clear, I was not fined – I settled to stop the litigation costs; I admitted no wrongdoing and I never modified a single bike that was the subject of this action.

After several years of very close dealings with CARB I find a less than impressive bunch. Arrogant beyond belief, even to the point of condescension. It seems to me they only peripherally interested in environmental issue, but they are absolutely obsessed with the exercise of their power. They are vindictive and nasty, and I now see they also have little interest in accuracy in their communications.

GP Motorcycles, the dealership I founded, has been in business for 18 years and I believe enjoys a great reputation within the community and with our customers. With the exception of this CARB issue, we have never been taken to court. We have no record of customer complaints. We have always prided ourselves on treating people fairly and honestly and our only mistake was passing along information from the DMV that we had every reason to believe was correct.

Ironically, after all that has transpired, nothing has changed with the DMV and they are still continuing to issue license plates for off-road motorcycles!

Even in these extremely difficult economic times California law makers continue to squeeze money from hard working small business people like myself as well as thousands of others who provide jobs and generate the very tax dollars that keep this state running. I find it sadder still that in addition to that, the State, publishing an inaccurate, misleading and unnecessary press release, apparently now wants to damage our reputation in the eyes of the general public.

Understand that between them, ARB and the DMV have every VIN number of every vehicle that is legally brought into California and should be well aware of their intended use. But as we’ve now learned these agencies apparently still can’t get it right and issue the correct registrations. So they rely upon using our tax dollars to punish the very small business people who, as I have learned so painfully, must pay for their very steep learning curve. It’s time the State of California and all its agencies learn to do their job right in the first place, and correct their own errors when they do not.

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