New Jersey Coalition of Automotive Retailers, Inc. v. Mazda Motor of America Inc, No. 19-2961 (3d Cir. 2020)Annotate this Case
The Coalition, an association of franchised New Jersey new car dealerships, filed suit under the New Jersey Franchise Practices Act on behalf of 16 Mazda dealer-members. Mazda had an incentive program for its franchised dealers (MBEP), which provides incentives, per-vehicle discounts or rebates on the dealers’ purchases of vehicles from Mazda, to dealers who make certain investments in their physical facilities that highlight their sale of Mazda vehicles or dedicate their dealerships exclusively to the sale of Mazda vehicles. The incentives come in different tiers, with the highest tier available to dealers who have exclusive Mazda facilities and a dedicated, exclusive Mazda general manager. Mazda dealers also earn incentives if they meet customer experience metrics. Mazda dealers who sell other brands of vehicles as well as Mazdas, do not receive incentives for brand commitment. Only three of the 16 Mazda dealers in the Coalition qualified for the highest tier; eight others qualified for some tier of incentives. The complaint alleged that the MBEP creates unfair competitive advantages for dealers who qualify for incentives under the MBEP at the expense of those dealers who do not, and even among incentivized dealers through different tiers.
The Third Circuit reversed the dismissal of the case, rejecting as too narrow the district court’s rationale--that the Coalition lacked standing because only five of the 16 Mazda dealers would benefit from the lawsuit, so the Coalition cannot possibly be protecting the interests of its members.