Sioux City Truck Sales, Inc. v. Iowa Department of Transportation

IN THE COURT OF APPEALS OF IOWA

No. 20-0837
Filed June 16, 2021

SIOUX CITY TRUCK SALES, INC.,
Plaintiff-Appellant,

vs.

IOWA DEPARTMENT OF TRANSPORTATION and PETERBILT MOTORS
COMPANY,
Defendants-Appellees,

and

ALLSTATE PETERBILT OF CLEAR LAKE,
Intervenor.
________________________________________________________________

Appeal from the Iowa District Court for Polk County, William P. Kelly, Judge.

Sioux City Truck Sales, Inc. appeals a judicial review order affirming the

Iowa Department of Transportation’s approval of an additional motor vehicle

dealership franchise in its existing area of responsibility. REVERSED AND

REMANDED TO THE AGENCY.

Jeffrey M. Goldstein of Goldstein Law Firm, PLLC, Washington D.C., pro

hac vice, and Anthony P. Lamb of Klass Law Firm, L.L.P., Sioux City, for appellant.

Stephen E. Doohen of Whitfield & Eddy, P.L.C., Des Moines, and Mark T.

Clouatre, John P. Streelman, and Jacob F. Fischer of Nelson Mullins Riley &

Scarborough LLP, Denver, Colorado, pro hac vice, for appellee Peterbilt Motors

Company.
2

Thomas J. Miller, Attorney General, and Michelle E. Rabe, Assistant

Attorney General, for appellee Iowa Department of Transportation.

Joseph G. Gamble of Duncan Green, P.C., Des Moines, and John N.

Bisanz, Jr. of Henson & Efron, P.A., Minneapolis, Minnesota, pro hac vice, for

intervenor Allstate Peterbilt of Clear Lake.

Heard by Bower, C.J., and Tabor and Ahlers, JJ.
3

TABOR, Judge.

Sioux City Truck Sales, Inc. (SCTS)1 entered a franchise agreement with

Peterbilt Motors Company to establish parts and service dealerships for customers

within an assigned area of responsibility. Three years later Peterbilt asked the

Iowa Department of Transportation (DOT) for permission to add a

dealer-franchisee in Clear Lake, which was within the “community” served by

SCTS. SCTS objected, claiming Peterbilt could not show good cause for

appointing an additional dealer under Iowa Code chapter 322A (2019). The DOT

approved Peterbilt’s request. SCTS appeals, urging that the agency and judicial

review decisions wrongly substituted a narrow meaning of “community” for the

statutory definition when assessing good cause.

Because the legislature provided a clear and unambiguous definition of

“community” to be used throughout the chapter, we find the agency and the district

court erred in resorting to principles of statutory construction to alter its plain

meaning. Thus we reverse the judicial review decision and remand to the agency

for further proceedings consistent with this opinion.

I. Facts and Prior Proceedings

Peterbilt is a commercial truck manufacturer that distributes its products

through a network of dealers nationwide. The dealers then sell and service

Peterbilt products in an assigned area of responsibility stipulated in their franchise

agreements. The scope of the dealer’s coverage area is negotiated by the parties

when they first enter into the franchise. Within those boundaries, Peterbilt

1 SCTS is now doing business as Midwest Peterbilt Group.
4

approves the number and location of its dealerships. Peterbilt may not assign an

additional dealer in an existing dealer’s area of responsibility without showing good

cause and that it is in the public interest. See Iowa Code § 322A.4.

SCTS has owned and operated five Peterbilt dealerships in Iowa and

Nebraska since 2013. Under the governing franchise agreement, SCTS

established full-service facilities in Sioux City; Council Bluffs; Altoona; and Norfolk,

Nebraska, as well as a parts-only store in Lincoln, Nebraska. As the sole Peterbilt

dealer in that region, SCTS agreed to service customers in most surrounding

counties. In an attached addendum, the parties stipulated that all of those counties

taken together comprised SCTS’s “non-exclusive” area of responsibility.2

In spring 2014, Peterbilt approached SCTS President Brad Wilson with a

proposal to open a full-service dealership in Clear Lake or Mason City. Peterbilt

insisted the Clear Lake area presented an ideal location for growth because it

neighbored a major interstate with heavy truck traffic and was far from any other

Peterbilt dealer. Yet Wilson showed no interest in pursuing that new

location. Later that fall, Peterbilt again asked Wilson to consider opening a

dealership in Clear Lake. In a detailed report, Peterbilt assessed the location’s

market viability based on new truck registrations, fleet numbers, traffic flow, and

major competitors doing business in the area. The report identified Clear Lake as

a “white spot” in SCTS’s area of responsibility with high sales potential. Despite

those efforts, Wilson appeared unpersuaded.

2 The parties did not define “non-exclusive” in the franchise agreement. But the
district court noted that Peterbilt used this term to describe its ability to appoint
additional dealers in another dealer’s area and to establish new service locations.
5

After two years of pushing for the new location, Peterbilt decided to pursue

its proposal without SCTS. In November 2016, Peterbilt gave Wilson written notice

of intent to appoint an additional dealer in SCTS’s area of responsibility. That letter

stated: “As provided in Addendum C,[3] this decision is within Peterbilt’s sole

discretion and no grounds are required to be stated in support of the

decision. Nevertheless, Peterbilt’s decision is motivated by the need to increase

representation within the non-exclusive area, specifically near Clear Lake.”

Peterbilt clarified that it was seeking a “dual assignment” rather than altering

SCTS’s existing area under the franchise agreement.

Wilson replied: “I’m not sure how you have come to this conclusion but we

have been looking for a location in Clear Lake for some time now and are currently

reviewing a lease opportunity on a 6000 sqft building. Your letter concerns me

that you may authorize another dealer there even if we have a location.” Indeed,

just a few weeks later Wilson sent Peterbilt a new site proposal for a parts-only

store near “US Hwy 18 midway between Mason City, IA and Clear Lake,

IA, . . . four and half miles east of Interstate-35.” Wilson added in his letter,

“Starting with a parts store will allow us to better determine the market potential for

a new [parts-and-service] facility while we find a property to acquire and design a

facility that will profitably improve Peterbilt’s market share and customer

support.” Before obtaining Peterbilt’s approval, SCTS signed the lease agreement

in early December.

3 This provision stated: “Upon providing DEALER one hundred and eighty (180)
days prior written notice, PETERBILT may in its sole discretion . . . appoint
additional dealers in the area without altering the area. Establishing new points in
the Dealer[’]s relevant market area is subject to Iowa statutes.”
6

Peterbilt rejected the parts-only proposal. It reasoned: “Our business needs

in that region require a minimum of a parts and service facility with plans to

eventually grow into a full service dealership.” It also stressed “any new facility

approved by Peterbilt Motors Company will not change the intent to pursue dual

assignment of the non-exclusive area.” Three months later, Peterbilt discovered

that SCTS opened the parts-only store without its authorization. Peterbilt believed

that the unauthorized location constituted “a material breach” of the

franchise. Threatening to sue for trademark infringement, Peterbilt directed SCTS

to “remove from the premises within ten days, all Peterbilt . . . products,

merchandise, signage, and services.”

After complying with those directives, SCTS submitted a revised proposal

for a new parts-and-service store in a different Clear Lake location. Peterbilt again

rejected the proposal.

In August 2017, Peterbilt applied to the DOT seeking appointment of

Allstate as an additional dealer-franchisee in the Clear Lake area. See Iowa Code

§ 322A.6. Peterbilt identified twenty-three counties within SCTS’s area of

responsibility that would be subject to the dual assignment. SCTS challenged that

request before the Department of Inspections and Appeals. After a three-day

evidentiary hearing, an administrative law judge (ALJ) endorsed Peterbilt’s

application. SCTS appealed to the DOT. But the DOT upheld the ALJ’s decision.

SCTS then sought judicial review. Finding no reversible error in the agency’s

interpretation, the district court affirmed. SCTS now appeals that judicial review

decision.
7

II. Scope and Standard of Review

In appeals from judicial review of agency action, we apply the standards

under Iowa Code section 17A.19(10) to see if we reach the same conclusions as

the district court. Colwell v. Iowa Dep’t of Human Servs., 923 N.W.2d 225, 231

(Iowa 2019). “If they are the same, we affirm; otherwise we may reverse.” Welch

v. Iowa Dep’t of Transp., 801 N.W.2d 590, 594 (Iowa 2011).

Because the legislature has not clearly vested the DOT with interpretive

authority in chapter 322A, we review the agency decision for correction of legal

error. See Cowell, 923 N.W.2d at 231–32; City of Des Moines v. Iowa Dep’t of

Transp., 911 N.W.2d 431, 439 (Iowa 2018) (finding DOT lacked interpretative

authority because relevant statutes did not expressly grant it). Under this standard,

we will reverse if the agency decision rested “on an erroneous interpretation of the

law.” Gartner v. Iowa Dep’t of Public Health, 830 N.W.2d 335, 343 (Iowa 2013);

see Iowa Code § 17A.19(10)(c). We need not defer to the DOT’s interpretation of

chapter 322A. See Welch, 801 N.W.2d at 594. If we find reversible error, we “are

free to substitute our judgment de novo for the agency’s interpretation.” Id.

III. Analysis

A. Defining “Community”

This appeal turns on the meaning of “community” as that word appears in

Iowa Code chapter 322A. We must decide whether the DOT and the district court

used the wrong definition when assessing good cause to appoint an additional

dealer-franchisee under section 322A.16.

But before turning to that definition, we offer a brief overview of the

provisions governing motor vehicle franchises. Broadly speaking, chapter 322A
8

aims “to provide for fair trade practices by motor vehicle franchisors.” 1970 Iowa

Acts ch. 1160, at 206. The preamble identifies dual purposes for the legislation.

Id. First, it highlights the public interest in ensuring “that once franchises are

established in a community, the requisite services are continued for the benefit

and safety of vehicle buyers and the public at large.” Midwest Auto. III, LLC v. Iowa

Dep’t of Transp., 646 N.W.2d 417, 423 (Iowa 2002). Second, it recognizes “the

opening of additional dealerships of any line-make which is at that time

represented in a community may adversely affect the ability of all dealerships of

all product lines to provide efficient and proper motor vehicle service in the

community and, therefore, additional dealership should not be opened in a

community unless it is first established that there is good cause therefor.” 1970

Iowa Acts ch. 1160, at 206.

No question, that overview lends context to the question before us. But the

preamble’s clues to legislative intent are not essential to our analysis. See Iowa

Code § 4.6 (2021) (explaining “if a statute is ambiguous,” we may consider its

preamble when determining legislative intent). Indeed, we need not hunt for

legislative intent because the code provides an unambiguous definition of the key

term. See Krull v. Thermogas Co., 522 N.W.2d 607, 612 (Iowa 1994) (“When the

statutory language is plain and its meaning is clear, we should not reach for

meaning beyond the statute’s express terms or resort to rules of statutory

construction.”). The legislature defined “community” as “the franchisee’s area of

responsibility as stipulated in the franchise.” Iowa Code § 322A.1(2). The

legislature instructed that definition must be used throughout the chapter “unless

the context otherwise requires.” Id. § 322A.1.
9

Critical to this appeal, the word “community” appears in the provisions

governing Peterbilt’s request to appoint Allstate as a new dealer in SCTS’s existing

area of responsibility. Section 322A.4 sets forth the requirements for a franchiser

requesting an additional dealership franchise. That provision states:

No franchiser shall enter into any franchise for the purpose of
establishing an additional motor vehicle dealership in any community
in which the same line-make is then represented, unless the
franchiser has first established in a hearing held under the provisions
of this chapter that there is good cause for such additional motor
vehicle dealership under such franchise, and that it is in the public
interest.

Id. § 322A.4.

From there, the statute requires the DOT to make a good-cause

determination based on the guidelines in section 322A.16, which states:

In determining whether good cause has been established for
entering into an additional franchise for the same line-make, the
department of inspections and appeals shall take into consideration
the existing circumstances, including, but not limited to:
1. Amount of business transacted by other franchisees of the
same line-make in that community.
2. Investment necessarily made and obligations incurred by
other franchisees of the same line-make, in that community, in the
performance of their part of their franchises.
3. Permanency of the investment.
4. Effect on the retail motor vehicle business as a whole in that
community.
5. Whether it is injurious to the public welfare for an additional
franchise to be established.
6. Whether the franchisees of the same line-make in that
community are providing adequate consumer care for the motor
vehicles of the line-make which shall include the adequacy of motor
vehicle services facilities, equipment, supply of parts and qualified
service personnel.

As its sole contention on appeal, SCTS argues the agency and the district

court both took a wrong turn by applying a different definition for “that community”

in section 322A.16 than the legislature prescribed in section 322A.1. On the way
10

to addressing that argument, we consider the various interpretations reached in

these proceedings.

1. Agency’s Interpretation

We start with the ALJ’s view of section 322A.16. The ALJ decided “little

doubt exists there was good cause to support an additional franchise that would

result in a dealership in the Clear Lake area, which is the community at issue under

the statute.” After defining community as the twenty-three counties in Peterbilt’s

proposal, the ALJ questioned whether the first two factors in section 322A.16 even

applied “since no other Peterbilt franchisees have been assigned the Clear Lake

area.” The ALJ reflected: “This is not a case where two franchisees have an

overlapping [area of responsibility] such as in a city, and the issue is whether a

third franchise should be granted for the area.” The ALJ found the four remaining

factors supported Peterbilt’s request for an additional franchise. After discussing

SCTS’s hesitancy to open a dealership in Clear Lake, the ALJ concluded:

What proves dispositive is Peterbilt’s concern that having an
unwilling dealer will harm it and the market. This is a reasonable and
legitimate business concern that has particular salience in this case,
as it is clear that [SCTS] is only acting because of the dual
assignment and that it has tried to do the minimal amount necessary
to avoid dual assignment.

In its appeal to the DOT, SCTS argued the ALJ considered the wrong

“community” when applying the good-cause factors. SCTS insisted the relevant

“community” was the area of responsibility stipulated in the franchise agreement

and not the area subject to the proposed dual assignment. In other words, SCTS

urged there was no reason to stray from the statutory definition.
11

The DOT rejected SCTS’s position, holding “the only logical community to

be used for [the good-cause] analysis is the area that will be dual assigned, or the

area that both [SCTS and Allstate] will share.” The DOT offered this explanation

for departing from the statutory definition of community:

Suffice it to say that consideration of the good cause factors, which
include comparing the amount of business transacted by the
franchisees, the necessary investment to be made, the permanency
of the investment in that community, can only be meaningful if the
community is defined in the same way for both entities, as SCTS’s
entire AOR/community is not subject to dual assignment.

The DOT noted it would be “illogical” to find good cause based on the entire area

of responsibility defined in the franchise when SCTS admitted “that the Clear Lake

area [was] not adequately served for parts and service despite its activities and

investment throughout its existing AOR.” Plus the DOT found that the narrower

definition of “community” better “capture[d] the public interest in establishing and

maintaining for consumers continued and adequate access to dealer services in

all relevant and appropriate areas.”

The DOT agreed with the ALJ that, under this factual scenario, “community”

meant the Clear Lake area (the twenty-three counties in Peterbilt’s proposal)

instead of SCTS’s entire area of responsibility under the franchise—as defined in

section 322A.1(2). Relying on that fact-specific definition of community, the DOT

held “the ALJ correctly concluded that Peterbilt demonstrated, by a preponderance

of the evidence that it has proper cause to enter into an additional franchise for the

purposes of establishing an additional dealership.”
12

2. District Court’s Interpretation

The district court upheld the agency decision. But it took a different

approach to statutory interpretation. Guided by this disclaimer, “unless context

otherwise requires,” the court determined the legislature must have intended the

definition of “community” to vary based on the context in which the word

appeared. See id. § 322A.1. In support, the court cited Brakke v. Iowa

Department of Natural Resources, 897 N.W.2d 522, 534 (Iowa 2017), which noted

an individual word “cannot be wrenched from the statutory language that follows

it.” In essence, the court took the disclaimer as clearance to bypass the statutory

definition and resort to the rules of statutory construction.

In construing the relevant statutes, the court focused on the articles “any” in

section 322A.4 and “that” in section 322A.16. The court believed the inclusion of

those two modifiers signaled a departure from the statutory definition of

community.

As a first step, the court construed “any community” in section 322A.4 to

mean “any portion of an area of responsibility assigned under a governing

franchise agreement.”

As a second step, the court applied that new, unstructured definition in

section 322A.16. The court criticized SCTS for suggesting the statutory definition

of “community” governed. The court reasoned: “To adopt [SCTS’s] suggestion

would be to render the legislature’s use of ‘that’ meaningless.” In the court’s

estimation, the phrase “that community” in section 322A.16 was undefined. Under

the court’s analysis, the legislature would not have included “that” unless it

intended to modify the word “community.” Relying on dictionary definitions of
13

“that,” the court decided the legislature intended to narrow the meaning of

“community” under section 322A.16.

After taking those two steps, the court held “that community” meant “the

portion of the franchisee’s community that the franchiser is seeking to appoint an

additional dealer in” or “the area being considered for dual assignment.”

3. Our Approach

As the reviewing court, we are entitled to forge “an independent

determination of the meaning of pertinent statutes.” Midwest Auto., 646 N.W.2d

at 422. Although we are mindful of the DOT’s expertise in this area when it comes

to findings of fact, “the final interpretation of the law rests with this court.” Id.

(quoting Noble v. Lamoni Prods., 512 N.W.2d 290, 292 (Iowa 1994)).

Reprising its arguments before the district court, SCTS contends it was

“clear error” for the agency to adopt “a contrived and wholly malleable definition”

of community when the legislature supplied an unambiguous statutory definition.

Citing a lack of ambiguity in the statute, SCTS contends the court erred in altering

the meaning of “community” based on the legislature’s use of different articles in

section 322A.4 and section 322A.16.

In response, Peterbilt argues the phrase “that community” is ambiguous

because it is unclear whether the area at issue is that of “the protesting dealer

(SCTS) or the proposed dealer (Allstate).” Peterbilt urges: “Once Section 322A.16

and Chapter 322A are construed in context, it is clear that SCTS’s community is

not the one at issue.” Put differently, Peterbilt claims the district court properly

turned to context to resolve a textual ambiguity. In the alternative, Peterbilt argues
14

even absent ambiguity, the court could resort to context because section 322A.1

includes the disclaimer: “unless the context otherwise requires.”

Neither of Peterbilt’s arguments justifies applying a different definition of

“community” than the legislature prescribed. To interpret a statute, we begin with

its text. See Kay-Decker v. Iowa St. Bd. of Tax Revenue, 857 N.W.2d 216, 223

(Iowa 2014); see also Antonin Scalia & Bryan A. Garner, Reading Law: The

Interpretation of Legal Texts at 56 (2012) [hereinafter Scalia & Garner, Reading

Law]. When the legislature chooses to define a word, we are “obligated to apply

the statutory definition . . . as written, absent an ambiguity in that

definition.” Sherwin-Williams Co. v. Iowa Dep’t of Revenue, 789 N.W.2d 417, 425

(Iowa 2010); see Rivera v. Woodward Res. Ctr., 830 N.W.2d 724, 730 (Iowa 2013)

(“We are bound to follow statutory definitions and to use them to build the

foundation of our interpretive analysis.”).

An ambiguity exists “if reasonable minds could disagree as to its meaning.”

Cowell, 923 N.W.2d at 232. “We determine whether a statute is ambiguous or

unambiguous by reading the statute as a whole.” State v. Richardson, 890 N.W.2d

609, 616 (Iowa 2017) (quoting State v. DeSimone, 839 N.W.2d 660, 666 (Iowa

2013)). When the same term appears throughout the statutory text, we may

reasonably conclude the meaning remains the same. See id. at 617; Scalia &

Garner, Reading Law, at 170.

Rather than use these traditional interpretive tools, the district court placed

inordinate value on the introductory phrase “unless context otherwise
15

requires.”4 But such conditional language becomes relevant only when an

ambiguity exists in either (1) the definition itself or (2) the relevant provisions in

which the disputed term appears.5 See Lewis v. Howard L. Allen Invs., Inc., 956

N.W.2d 489, 491–92 (Iowa 2021) (resorting to context-specific analysis when

“landlord” was statutorily defined as “the owner, lessor, or sublessor” and it was

unclear whether both an owner and lessor could be a landlord at same time);

Rivera, 830 N.W.2d at 730 (finding “the context of the savings clause does not

require the term ‘claim’ to take on a meaning different from the statutory definition”

because there was no ambiguity after applying its intended meaning). Peterbilt

argues this case falls into the second category. In its view, the meaning of

“community” becomes ambiguous when paired with the article “that” in section

322A.16. Because the legislature defined “community” but not “that community,”

4 Justice Mansfield used the term “escape hatch” to describe an identical phrase
introducing definitions in Iowa Code section 68A.102. Iowa Right to Life Comm.,
Inc. v. Tooker, 808 N.W.2d 417, 429 (Iowa 2011). There, the supreme court held
a corporation was not a “political committee” in part because section 68A.404
exempted “independent expenditures” from that definition. Id. That specific
exemption marked a restrained reading of the proviso “unless the context
otherwise requires” consistent with the “escape hatch” moniker. Literally, an
escape hatch is “an emergency exit from an enclosed space.” Escape Hatch,
Merriam-Webster, https://www.merriam-webster.com/dictionary/escape%20hatch
(last visited May 25, 2021). Figuratively, an escape hatch is “a means of evading
a difficulty, dilemma, or responsibility.” Id. But that figurative evasion of a set
definition does not reflect what the agency or district court did here. For its part,
the district court engaged in a provision-by-provision analysis to decide whether
the surrounding text dictated a distinct definition of community. And different still,
the agency looked to the particular facts in deciding the context required a
narrower definition of community.
5 A third possible category, not relevant here, is when two statutory definitions

conflict with one another and it is unclear which definition controls. See Iowa Right
to Life Comm., Inc., 808 N.W.2d at 427–28.
16

Peterbilt insists a contextual ambiguity exists, excusing its rejection of the statutory

definition. We disagree.

As discussed, the legislature defined “community” as “the franchisee’s area

of responsibility as stipulated in the franchise.” Iowa Code § 322A.1(2). We see

no ambiguity in that definition. Nor does Peterbilt offer a solid reason why the

context of section 322A.16 would call for a different definition. See Rivera, 830

N.W.2d at 731. Instead, Peterbilt complains that if the statutory definition holds,

the good-cause factors would do “nothing more than reward dealer groups for

having numerous locations, even if, like SCTS here, they spend nothing in the

community [subject to the dual assignment.]” Caught up in its complaint, Peterbilt

urges we must consider “the logical consequences” and “the context of this case.”

But that fact-driven approach would render the definitional section

meaningless. See Sherwin-Williams Co., 789 N.W.2d at 425 (noting that when the

legislature defines a term, “the common law and dictionary definitions which may

not coincide with the legislative definition must yield to the language of the

legislature” (quoting Hornby v. State, 559 N.W.2d 23, 25 (Iowa 1997))).

What’s more, the case-by-case scenario Peterbilt desires is implicit in the

statutory definition. Peterbilt overlooks the fact that it has the bargaining power to

set the boundaries of the franchisee’s area of responsibility when negotiating its

franchise agreements. At trial, SCTS criticized Peterbilt for seeking to alter the

statute’s meaning based on the economic circumstances of its truck dealers

covering much larger territories than car dealers. We agree that Peterbilt cannot

now complain that the definition as applied to these facts is too broad because it

encountered unexpected business risks.
17

Without supportive authority, Peterbilt contends “the only plausible

interpretation is that [‘that community’] is referring to the proposed community of

the proposed franchisee.” But that contention clashes with another definition. The

legislature defined “franchisee” as “a person who receives motor vehicles from the

franchiser under a franchise and who offers and sells such motor vehicles to the

general public.” Iowa Code § 322A.1(6). By that definition, a proposed dealer like

Allstate that had not yet entered into a franchise with Peterbilt is not a franchisee

under this chapter.6 Thus, the phrase “that community” refers to SCTS’s area of

responsibility as stipulated in the franchise.

Even when we read “that” as modifying “community” in section 322A.16, we

see no reason to abandon the definition in section 322A.1(2). The district court

was correct in reading section 322A.4 on additional franchises together with

section 322A.16 on good cause. As the later provision, section 322A.16’s

references to “that community” are references back to section 322A.4.7 But

contrary to the district court’s analysis, section 322A.4 requires a franchiser to

establish good cause for an additional dealership in “any community in which the

6 Allstate asserted at oral argument that it has been operating as an authorized
Peterbilt dealer in Iowa since the DOT issued its decision in August 2019. That
assertion makes no difference in our analysis. Because we are reviewing the
validity of the agency decision based on a question of law, any steps taken after
those proceedings are irrelevant.
7 “That” is often used to emphasize a term mentioned before. That, Cambridge

Dictionary, https://dictionary.cambridge.org/us/dictionary/english/that (last visited
May 25, 2021); That, Dictionary.com, https://www.dictionary.com/browse/that (last
visited May 25, 2021).
18

same line is then represented.” Here, that community was SCTS’s area of

responsibility as stipulated in its franchise with Peterbilt.8 See id. § 322A.1(2).

We find nothing in the statutory language showing the legislature intended

“that community” to mean some undefined portion of the existing franchisee’s area

of responsibility. Nor does the language allow a franchiser to define “that

community” through its application to the DOT. As SCTS argues, a franchiser

could “gerrymander” those boundaries such that “[t]he magnitude and result of

each individual statutory factor could be starkly different depending on where [the

franchiser] chooses to locate the borders.” We agree the legislature could not have

intended that result. See State v. Miller, 622 N.W.2d 782, 785 (Iowa Ct. App. 2000)

(“We may not—under the guise of statutory construction—enlarge or otherwise

change the terms of a statute as the legislature adopted it.”).

Peterbilt worries that allowing proof of SCTS’s investments and consumer

care in locations outside the Clear Lake area might prevent the dual

assignment. But our interpretation of section 322A.16 cannot hinge on the

practical realities of these transactions. Nor can we adopt a new definition

because it makes sense under the specific facts of this case. See State v. Doe,

903 N.W.2d 347, 353 (Iowa 2017) (“While the State’s position makes some sense

given the facts we have here, any interpretation of the word ‘case’ must apply

across the board.”).

8 Peterbilt acknowledges the goal of section 322A.4 “is to ensure that an existing
dealer can protest any establishment proposed in its assigned area of
responsibility.”
19

The legislature’s definition of “community” leaves no ambiguity. As used in

section 322A.16, “community” means the entire area of responsibility stipulated in

the franchise between SCTS and Peterbilt. To that end, we conclude both the

agency and the district court employed a faulty definition of community when

deciding that Peterbilt met its burden of proving good cause for an additional

dealership franchise.

B. Remedy

But our decision that the agency and the district court used an incorrect

definition does not clinch a victory for SCTS. A fact finder must still decide whether

Peterbilt can meet its burden to show good cause for adding a franchisee when

the relevant community is the area of responsibility stipulated in the franchise with

SCTS. On this point, SCTS asks us to remand to the agency for a new

determination using the proper definition of “community.” Peterbilt counters that

SCTS should have challenged “the mountain of evidence relied upon by the ALJ,

the Department, and the district court” under each statutory factor on appeal.

After reviewing the record, we opt to defer to the DOT’s expertise in this

field to reconsider the evidence based on SCTS’s area of responsibility as defined

in its franchise. That approach hews to the “fundamental principle” that

“administrative decisions are to be made by the agencies, and not by the courts.”

Midwest Auto, 646 N.W.2d at 422. Thus, we reverse the judicial review decision

and remand to the DOT for further proceedings consistent with this opinion.

REVERSED AND REMANDED TO THE AGENCY.