A pair of Charleston-area automobile sellers are among more than five dozen car dealers nationwide that are suing the federal government over the loss of their businesses in Chrysler's 2009 bankruptcy.
The lawsuit alleges that their franchises were closed without adequate compensation.
The 64 former Chrysler dealers, including what were Hoover Chrysler Jeep Inc. in West Ashley and Hoover Dodge Inc. in Summerville, say the Treasury Department violated their constitutional rights by failing to pay them for taking their auto businesses.
They are seeking damages of at least $130 million.
The two Hoover franchises, the only dealerships named in the suit among 11 in South Carolina that lost their businesses during Chrysler's bankruptcy reorganization, claim in court papers that state law prohibits the manufacturer from terminating a dealer's franchise without "good cause."
If that happens, the suit claims, the dealer must receive fair and reasonable compensation for the value of the business, including the dealer's inventory, signage, special tools, automotive service equipment and compensation for its dealership facilities or location.
Mark Hoover of Hoover Automotive Group referred questions to attorney Leonard Bellavia of New York, one of three lawyers representing the 64 car dealers.
Bellavia did not return calls for comment.
After losing its Chrysler franchise, Hoover Automotive Group has remained in the car business as Hoover Mitsubishi and Hoover Pre-owned Super Center.
The lawsuit, which was filed by dealers in 29 states, says the closures prevented a "significant disruption" in the U.S. auto industry and economy but added "this is a loss that should not, however, be borne by a few individual auto dealers but … must in fairness and justice be borne by the public as a whole."
Treasury Department spokesman Mark Paustenbach declined comment on the lawsuit Tuesday, which was filed in the U.S. Court of Federal Claims in Washington.
Chrysler closed 789 auto dealers, or about one-quarter of its sales network, in its June 2009 bankruptcy. The closings of Chrysler and General Motors dealerships were among a broad number of concessions given by dealers, workers, retirees and others to make the companies viable in the government-led auto bankruptcies that followed the financial market meltdown in the fall of 2008.
Following a lobbying campaign by car dealers, Congress approved legislation later in 2009 that required arbitration for the closed dealers. Chrysler agreed to restore about 80 franchises through the process while GM reinstated more than 660 dealers it had threatened with closure.
The Associated Press contributed to this report.