On April 4, 2024, NJ CAR scored a major victory in the New Jersey Appellate Division in the lawsuit against Ford Motor Company (Ford) seeking declaratory and injunctive relief, alleging Ford’s Lincoln Commitment Program (LCP) violates a provision of the New Jersey Franchise Practices Act (NJFPA) because it resulted in vehicle price differentials. The Appellate Court held that NJ CAR has associational standing to bring this action.
The Appellate Court reversed and remanded the trial court’s decision granting Ford’s motion for summary judgment on the ground that NJ CAR lacked standing. The trial court reached this decision without addressing the substance of the lawsuit in the summary judgment motions. The Appellate Court’s reversal and remand now requires the trial court to address the summary judgment motions on the substantive merits.
NJ CAR has long contended that it has associational standing to raise its member’s claims under the NJFPA. The Appellate Court reaffirmed this view by pointing to the liberal approach to the issue of standing in New Jersey. The Court explained that “an association may have standing to seek judicial relief in its own right or on behalf of its members.” For an association to establish that it has standing it must demonstrate that “(1) its members would have standing to sue; (2) the interests it seeks to maintain are germane to the purposes of the organization; and (3) neither the claim asserted, nor the relief requested requires individual participation by the association’s members.”
The Appellate Court found that NJ CAR met all three prongs of that test. The first prong was satisfied because the Court found that NJ CAR was not seeking an advisory opinion because there appeared to be “a justiciable controversy so that individual NJ CAR members would have standing to bring an action under the NJFPA.” As to the second prong, the court found that “proper enforcement of the NJFPA is germane to NJ CAR’s purpose, which includes advocating on behalf of its members and promoting public policies to ensure a competitive and fair marketplace.” Finally, the third prong was met because “the litigation does not require participation of individual members because NJ CAR [sought] only declaratory and injunctive relief, not damages based on the alleged violation of the statute.”
While this is a major win for NJ CAR, it may be necessary to enshrine the Coalition’s right to protect its members in court by amending the NJFPA to explicitly mention that an association has the right to bring action on behalf of its members under the Act. NJ CAR is currently working on introducing a bill to accomplish that goal.
If dealers have questions about this topic or any other questions, they should contact Greyson P. Hannigan, NJ CAR’s Director of Legal & Regulatory Affairs at (609) 883-5056 – ext. 340 or, via email, at [email protected].