Dealers often bemoan California's legal climate. Two of their biggest legal headaches there: Labor-law challenges and class actions.

The two combined in a case that is changing dealership pay plans across the state. In 2013, the California Court of Appeal ruled in favor of technicians in a class action against Downtown L.A. Motors.

"The court decided that, retroactively, no one had been paying technicians correctly under the law, and all dealers became vulnerable," said Aaron Jacoby, a partner at the law firm Arent Fox in Los Angeles. The statute of limitations allows plaintiffs to go back four years, "so dealers are getting sued up and down the state."

Jacoby estimated the technican pay challenges could cost California dealerships $200 million to $300 million.

[Automotive News]