SYLLABUS
(This syllabus is not part of the opinion of the Court. It has
been prepared by the Office of the Clerk for the convenience of the
reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not
have been summarized).
Argued January 29, 2007 -- Decided March 20, 2007
PER CURIAM
Four separate complaints, filed as class action lawsuits, were consolidated under the Wilson v. General Motors caption. In their complaints, the class-action plaintiffs allege violations of the New Jersey Antitrust Act, N.J.S.A. 56:9-1 to -19, and that those acts constituted “unconscionable practices” in violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, (CFA).
The foundation of the plaintiffs’ claims is that the manufacturing defendants, with the
aid and assistance of the dealer association defendants, entered into a series of
agreements resulting in actions intended to ensure that New Jersey consumers could not
purchase new cars sold to dealers in Canada and, instead could only purchase
those same cars in the United States at higher prices. The complaints allege
that the defendants sought to restrict the supply of, and the alternative sources
for, new vehicles for New Jersey consumers in order to artificially drive up
the prices for vehicles purchased in New Jersey. The complaints further allege that
by preventing New Jersey consumers from having an alternative supply of cars from
Canada, the manufacturing defendants unreasonably increased the costs incurred for their products by
New Jersey consumers. Plaintiffs acknowledge that the conduct, the purpose of which was
to make sure consumers would pay higher prices for the manufacturing defendants’ vehicles,
included actions directed at the manufacturing defendants’ new vehicle dealers.
In affirming the lower court’s dismissal of the complaints, a majority of the
Appellate Division reasoned that: 1) the only acts and practices included in the
complaint are anti-competitive acts in furtherance of an antitrust conspiracy-each of the acts
by defendants were explicitly directed at dealers; 2) there is no act alleged
that constitutes a deception or includes any type of misleading behavior directed at
the plaintiffs; and 3) all of the acts complained of affect plaintiffs only
in their status as indirect consumers. According to the Appellate Division majority, the
complaints do not include any facts that constitute an unconscionable commercial practice apart
from the antitrust conspiracy and the acts undertaken in furtherance thereof. As such,
the majority concluded that the plaintiffs’ complaints cannot state a claim for relief
under the CFA. The majority noted that to hold otherwise would be to
create an “end run” around the plain intention of the Legislature embodied in
the Antitrust Act.
One member of the appellate panel dissented, finding that in reading the allegations
of the complaints as required for purposes of a motion to dismiss under
Rule 4;6-2(e), plaintiffs have alleged the fundamentals of a consumer fraud action, i.e.,
that independently of the price-fixing conspiracy, defendants have engaged in conduct in violation
of the CFA. The dissent noted that it was alleged that the manufacturing
defendants, among other things, sought and obtained agreement from their United States dealers
to : 1) not honor new car warranties on cars imported from Canada;
2) not install properly calibrated imperial measure speedometers and odometers in cars imported
from Canada which had metric speedometers and odometers; and 3) taking measures to
enforce the agreements by refusing to provide United States buyers of new Canadian
cars with information regarding recalls. The dissent was of the view that these
actions suggested the fundamentals of a CFA cause of action independent of the
price-fixing, antitrust violation. The dissent also concluded that the CFA claims could be
pursued without creating a conflict between the Antitrust Act and the CFA.
Plaintiffs appeal as of right based on the dissent in the Appellate Division.
HELD: The allegations in these class-action complaints essentially assert an anti-competition scheme in
violation of the New Jersey Antitrust Act. There are no allegations or communications
with, or directed to, consumers “in connection with the sale or advertisement” of
vehicles that would entitle plaintiffs to relief under the Consumer Fraud Act.
1. Federal law is followed when interpreting our own antitrust statute. For purposes
of this appeal, it is uncontested that indirect purchasers, such as plaintiffs, who
did not purchase vehicles directly from defendants, have no standing to assert a
private right of action under the New Jersey Antitrust Act. (P. 5)
2. The alleged wrongdoing is essentially directed to the sale of vehicles in
Canada and their importation into the United States. There are no allegations of
communications with, or directed to, consumers “in connection with the sale or advertisement”
of vehicles as required under the CFA. Even if the complaints can be
said to allege an “unconscionable commercial practice, deception, fraud, false pretense, false promise,
misrepresentation, or the knowing concealment, suppression, or omission of any material fact…in connection
with the sale or advertisement” of a motor vehicle to a putative plaintiff
in violation of the CFA, the Court agrees with the Appellate Division majority
that the allegations in the complaints, which basically assert an anti-competition scheme in
violation of the Antitrust Act without any allegation of a direct or indirect
statement or communication with any plaintiff, are precluded under the federal antitrust case,
Illinois Brick, (Pp. 6-8)
3. The Court leaves for another day whether a CFA action would be
precluded where the allegations of a violation of the Antitrust Act include communications
with, or statements to, New Jersey consumers that are clear violations of the
CFA. (P. 8)
Judgment of the Appellate Division is AFFIRMED.
JUSTICES LaVECCHIA, WALLACE, RIVERA-SOTO, and APPELLATE DIVISION JUDGES STERN and LINTNER, temporarily assigned,
join in this PER CURIAM opinion. CHIEF JUSTICE ZAZZALI, and JUSTICES LONG, ALBIN
and HOENS did not participate.
SUPREME COURT OF NEW JERSEY
A-
58 September Term 2006
RICHARD M. WILSON, Individually and on Behalf of all Others Similarly Situated,
Plaintiff-Appellant,
v.
GENERAL MOTORS CORPORATION, GENERAL MOTORS OF CANADA, LTD., FORD MOTOR COMPANY, FORD MOTOR
COMPANY OF CANADA, LTD., TOYOTA MOTOR CORPORATION, TOYOTA MOTOR SALES, U.S.A., INC., TOYOTA
CANADA, INC., HONDA MOTOR COMPANY, LTD., AMERICAN HONDA MOTOR CO., INC., HONDA CANADA,
INC., DAIMLERCHRYSLER AKTIENGESELLSCHAFT, DAIMLERCHRYSLER CANADA, INC., MERCEDES-BENZ CANADA, INC., NISSAN MOTOR COMPANY, LTD.,
NISSAN NORTH AMERICA, INC., NISSAN CANADA, INC., BMW OF NORTH AMERICA, INC., BMW
CANADA, NATIONAL AUTOMOBILE DEALERS ASSOCIATION and CANADIAN AUTOMOBILE DEALERS ASSOCIATION,
Defendants-Respondents.
Argued January 29, 2007 – Decided March 20, 2007
On appeal from the Superior Court, Appellate Division.
Donna Siegel Moffa argued the cause for appellant (Trujillo Rodriguez & Richards, attorneys;
Ms. Moffa, Lisa J. Rodriguez and Nicole M. Acchione, on the briefs).
William R. Sherman, a member of the District of Columbia bar, argued the
cause for respondents Campbell Campbell Edwards & Conroy, attorneys for Ford Motor Company
and Ford Motor Company of Canada, Ltd., (Lavin, Coleman, O’Neil, Ricci, Finarelli &
Gray, attorneys for General Motors Corporation and General Motors of Canada, Ltd., Krovatin
& Associates, attorneys for American Honda Motor Co., Inc., Cooper, Rose & English,
attorneys for Nissan North America, Inc., Marshall, Dennehey, Warner, Coleman & Coggin, attorneys
for DaimlerChrysler Canada, Inc. and Mercedes-Benz Canada, Inc. and Connell Foley, attorneys for
National Automobile Dealers Association; Brian D. McElvaine, Joseph E. O’Neil, Gerald Krovatin, Peter
M. Burke, Kevin M. McKeon and Brian G. Steller, on the brief).
PER CURIAM
Plaintiffs appeal as of right, pursuant to Rule 2:2-1(a)(2) following a dissent in
the Appellate Division, from a judgment affirming the dismissal of their complaints in
the Law Division.
See footnote 1
Plaintiffs’ complaint alleged violations of the New Jersey Antitrust Act,
N.J.S.A. 56:9-1 to -19, and that those acts constituted “unconscionable practices” in violation
of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -20 (CFA).
See footnote 2
The
appeal to the Appellate Division challenged only the dismissal of plaintiffs’ claims under
the CFA, and, in an unpublished opinion, a majority of the Appellate Division
affirmed the judgment dismissing the CFA complaint.
In the words of plaintiffs’ brief,
[t]he gravamen of Plaintiffs’ complaints was that the Manufacturing Defendants, with the aid
and assistance of the dealer association defendants, entered a series of agreements pursuant
to which they took various actions intended to ensure that New Jersey (and
other United States) consumers could not purchase new cars sold to dealers in
Canada and, instead could only purchase those same cars in the United States
at higher prices.
According to plaintiffs,
[t]he complaints allege that the Manufacturing Defendants, in concert with the automobile dealer
association defendants, engaged in a wide-ranging conspiracy to prevent vehicles that they had
sold to dealers in Canada from being exported and sold to consumers in
New Jersey (and the United States), so that consumers of the Manufacturer-Defendants’ vehicles
would have to pay higher prices for those vehicles.
“The complaints allege that Defendants sought to restrict the supply of, and the
alternative sources for, new vehicles for New Jersey consumers in order to artificially
drive up the prices for vehicles purchased in New Jersey.” Plaintiffs further allege
that “[b]y preventing New Jersey consumers from having the alternative of a supply
of cars from Canada, the Manufacturing Defendants unreasonably increased the costs incurred for
their products by New Jersey consumers.” Thus, plaintiffs acknowledge that “[t]he conduct, the
object of which was to ensure that consumers paid higher prices for the
Manufacturing Defendant[s’] vehicles, included actions directed at the Manufacturing Defendants new vehicle dealers[.]”
In affirming the dismissal of the complaints the Appellate Division majority concluded:
Because the only acts and practices included in the complaint are anti-competitive acts
in furtherance of an antitrust conspiracy, because there is no act alleged that
constitutes a deception or includes any type of misleading behavior directed at these
plaintiffs, because all of the acts complained of affect plaintiffs only in their
status as indirect consumers, we conclude that their complaint cannot state a claim
for relief under the Consumer Fraud Act. To conclude to the contrary, as
we found in Sickles [v. Cabot Corp.,
379 N.J. Super. 100 (App. Div.),
certif. denied,
185 N.J. 297 (2005)], would be to create an “end run”
around the plain intention of the Legislature embodied in the Antitrust Act. See
Sickles, supra, 379 N.J. Super. at 117 (quoting Abbott Labs [Inc. v. Segura,
907 S.W.2d 503, 506 (Tex. 1995)].
As stated in Sickles v. Cabot Corp.,
379 N.J. Super. 100, 107 (App.
Div.), certif. denied,
185 N.J. 297 (2005), “[w]e follow federal antitrust law in
interpreting our own antitrust statute,” see N.J.S.A. 56:9-18, and under Illinois Brick Co.
v. Illinois,
431 U.S. 720,
96 S. Ct. 2061,
52 L. Ed.2d 707, reh’g denied,
434 U.S. 881,
98 S. Ct. 243,
54 L. Ed. 2d 164 (1977), indirect purchasers, such as plaintiffs, who did not purchase vehicles
directly from defendants have no standing to assert a private right of action
under the New Jersey Antitrust Act. Those propositions are uncontested for purposes of
this appeal.
According to the Appellate Division majority:
Carefully read, the complaint rests only on allegations that are traditional anticompetitive behaviors
that plaintiffs argue affect them indirectly. They have identified no acts undertaken by
defendants except for those in furtherance of the antitrust conspiracy. Each of the
acts by defendants that were explicitly directed at dealers, including conspiracy, refusal to
sell to dealers in Canada who might export cars to the United States,
instituting chargebacks, requiring agreements not to export and terminating dealerships of uncooperative dealers,
are allegations of antitrust activities with an indirect effect on plaintiffs, recovery for
which is barred under Illinois Brick. Even the few factual allegations that are
not directed solely at the dealers, including tracking VIN numbers, causing domestic dealers
to refuse to honor warranties or to install imperial measure odometers and speedometers,
or refusing to provide recall information to domestic purchasers of Canadian vehicles, are
acts in furtherance of the conspiracy and are only acts that affect plaintiffs
indirectly. The complaints simply do not include any facts that constitute an unconscionable
commercial practice apart from the antitrust conspiracy and the acts undertaken in furtherance
thereof.
However expansively we may understand the term “unconscionable commercial practice” as it is
used in the Consumer Fraud Act, the heart of plaintiffs’ appeal asks us
to read that language to effect a repealer of Illinois Brick. Plaintiffs suggest
that factual allegations that sound only in antitrust violations can support a claim
by indirect purchasers through use of the Consumer Fraud Act where the Legislature
has specifically rejected such a cause of action under the Antitrust Act itself.
In doing so, plaintiffs ask us to accomplish by judicial analysis of the
Consumer Fraud Act a result which our Legislature has expressly rejected. We decline
to do so.
The dissenting Appellate Division judge concluded that reading the allegations of the complaint
as required for purposes of a motion to dismiss under Rule 4:6-2(e), “plaintiffs
have alleged the fundamentals of a consumer fraud cause of action, i.e., that
independently of the price-fixing conspiracy, defendants have engaged in conduct that violates the
[CFA].” The judge believed that allegations that the “Manufacturing Defendants”
among other things, sought and obtained agreement from their United States dealers to:
[(1)] [n]ot honor new car warranties on cars imported from Canada; and [(2)]
[n]ot install properly calibrated imperial measure speedometers and odometers in cars imported from
Canada which had metric speedometers and odometers[] . . . [as well their
taking of] measures to enforce the [] agreements[] [by] [r]efusing to provide U.S.
purchasers of new Canadian cars with information regarding recalls . . . suggest[ed]
the fundamentals of a CFA cause of action, which is independent of the
price-fixing, antitrust violation.
The dissenting judge also concluded that those “CFA claims . . . may
be pursued without creating a conflict between the Antitrust Act and the CFA.”
The alleged wrongdoing was essentially directed to the sale of vehicles in Canada
and their importation into the United States, and there are no allegations of
communications with, or directed to, consumers “in connection with the sale or advertisement”
of vehicles, as required by N.J.S.A. 56:8-2. See also N.J.S.A. 56:8-1 (definitions). Even
if the complaints can be said to allege an “unconscionable commercial practice, deception,
fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression, or omission
of any material fact . . . in connection with the sale or
advertisement” of a motor vehicle to a putative plaintiff, in violation of N.J.S.A.
56:8-2, we agree with the Appellate Division majority that the allegations in the
complaints, which essentially assert an anticompetitive scheme in violation of the Antitrust Act
without any allegation of a direct or indirect statement or communication with any
plaintiff, are precluded under Illinois Brick. However, we leave for another day whether
a CFA action would be precluded when the allegations of a violation of
the Antitrust Act include communications with, or statements to, New Jersey consumers that
are clear violations of the CFA.
Affirmed.
JUSTICES LaVECCHIA, WALLACE, RIVERA-SOTO, and APPELLATE DIVISION JUDGES STERN and LINTNER, temporarily assigned,
join in this opinion. CHIEF JUSTICE ZAZZALI and JUSTICES LONG, ALBIN and HOENS
did not participate.
SUPREME COURT OF NEW JERSEY
NO. A-58 SEPTEMBER TERM 2005
ON APPEAL FROM Appellate Division, Superior Court
RICHARD M. WILSON,
Individually and on Behalf of
all Others Similarly
Situated,
Plaintiff-Appellant,
v.
GENERAL MOTORS CORPORATION,
et al.,
Defendants-Respondents.
DECIDED March 20, 2007
Chief Justice LaVecchia PRESIDING
OPINION BY Per Curiam
CONCURRING OPINION BY
DISSENTING OPINION BY
CHECKLIST
Footnote: 1
Four separate complaints, filed as class actions, were consolidated under the Wilson
v. General Motors caption.
Footnote: 2
The Wilson and Kaufman complaints do not expressly state “causes of action
[in] violation of N.J.S.A. 56:9-3,” as do the Williams and Tatte complaints. However,
the Wilson and Kaufman complaints allege that “[d]efendants have engaged in unfair methods
of competition in violation of the standards of conduct established by the New
Jersey Antitrust Act, N.J.S.A. 56:9-1, et seq. The violation of this [A]ct constitutes
unfair and unconscionable practices, which are actionable pursuant to the New Jersey Consumer
Fraud Act 56:8-2.” According to the Wilson and Kaufman complaints:
The contract, combination and conspiracy alleged herein was an unconscionable commercial practice prohibited
by the New Jersey Fraud Statute and other state statutes prohibiting price fixing.
The unconscionable commercial practice consisted of a continuing agreement, understanding and concert of
action among the Defendants and their co-conspirators the substantial terms of which were
to eliminate the import of new cars from Canada into the United States
and thereby raise, fix, stabilize or maintain prices of new automobiles sold or
leased in the State of New Jersey and throughout the United States at
artificially high levels.