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Wilson v. General Motors Corp.

March 20, 2007

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.



On appeal from the Superior Court, Appellate Division.

SYLLABUS BY THE COURT

(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).

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 ...


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