February 4, 2008
W & D IMPORTS, INC. D/B/A WILLIS HONDA, PETITIONER-APPELLANT,
AMERICAN HONDA MOTOR CO. INC., AND ALL STAR MOTORS, L.L.C., RESPONDENTS-RESPONDENTS.
On appeal from the Motor Vehicle Franchise Committee, Department of Law and Public Safety, No. MFC 10956-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 7, 2008
Before Judges S.L. Reisner, Gilroy and Baxter.
Petitioner W & D Imports, Inc., d/b/a Willis Honda (Willis or petitioner), located in Burlington, New Jersey appeals from a final decision of the Motor Vehicle Franchise Committee*fn1 , dismissing petitioner's protest of a decision by the franchisor American Honda Motor Company, Inc. (American Honda or the company) to establish a new Honda dealership franchise in Hamilton Township, New Jersey. We affirm.
To put this appeal in context, we begin with an overview of the relevant statute. The Motor Vehicle Franchises Act, N.J.S.A. 56:10-16 to -29, prohibits a franchisor from granting a new franchise if it would cause injury to an existing franchisee or to the public:
No motor vehicle franchisor shall grant, relocate, reopen or reactivate a franchise or establish, relocate, reopen or reactivate a business, for the purpose of doing business on the retail level, if the franchise or business will be injurious as determined pursuant to [N.J.S.A. 56:10-23].
In making that determination, the Committee considers a series of factors:
(1) The effect that the proposed franchise or business would have on the provision of stable, adequate and reliable sales and service to purchasers of vehicles in the same line make in the relevant market area;
(2) The effect that the proposed franchise or business would have on the stability of existing franchisees in the same line make in the relevant market area;
(3) Whether the existing franchisees in the same line make in the relevant market area are providing adequate and convenient consumer service for motor vehicles of the line make in the relevant market area, which shall include the adequacy of motor vehicle sales and service facilities, equipment, supply of motor vehicle parts and qualified service personnel;
(4) The effect on a relocating dealer of a denial of its relocation into the relevant market area.
A franchisee's potential lost profits do not constitute injury unless the loss will be significant:
[A]n appropriate standard for measuring injury under the Act, both to a franchisee and to the public interest, is proof that the effect of a new dealership would be to reduce the profitability of the protesting dealer to an extent sufficient to cause a substantial deterioration of that dealer's ability to provide adequate customer services.
That standard of injury strikes a balance between evidence of inevitable termination due to business failure, a standard we find relevant but difficult to prove, and evidence merely of reduced profits. [Monmouth Chrysler-Plymouth, Inc. v. Chrysler Corp., 102 N.J. 485, 499 (1986).]
Injury is presumed if the objector*fn2 can establish any of the following factors:
(1) for the 24-month period prior to notice pursuant to section 4 of P.L.1982, c.156 (C.56:10-19), the average market penetration of the franchisees given notice pursuant to section 4 of P.L.1982, c.156 (C.56:10-19) is at least equal to the average market penetration of all franchisees in the same line make in the zone, district, region or other similar geographic designation, other than a national geographic designation, used by the motor vehicle franchisor into which the proposed franchise or business will be assigned, . . . ;
(2) the proposed franchise or business is likely to cause not less than a 25% reduction in new vehicle sales or not less than a 25% reduction in gross income for the protesting franchisee;
(3) the proposed franchise or business will not operate a full service franchise or business at the proposed location; or
(4) an owner or operator of the proposed franchise or business has engaged in materially unfair or deceptive business practices with respect to a motor vehicle franchise or business.
However, the presumption of injury does not apply to the granting, reopening or reactivation of a franchise if the proposed franchisee is a minority or a woman. N.J.S.A. 56:10-23(c).
Willis Honda's protest was directed at a decision by the franchisor American Honda to grant a franchise to All Star Motors, L.L.C., a dealership which would be owned in part by Jessie Armstead, who is African-American. However, as will be discussed in greater detail later in this opinion, Armstead's minority status was not a critical factor in the Committee's decision to deny the protest, because Willis failed to establish that creation of a new franchise would cause injury to its business or to the public.
From the voluminous hearing record, we have distilled the following as the most pertinent facts. We begin with the testimony of William Green, the manager of market planning for American Honda's Acura and Honda divisions. Willis Honda called Green as its first witness and questioned him extensively. Green was responsible on a nationwide basis for determining whether American Honda had the proper number of dealerships in the appropriate locations, whether the existing dealerships were competitive in the marketplace, and whether the dealerships conformed to Honda's image standards.
Green described the process by which American Honda decided whether to establish a new dealership. The company routinely considered the performance of its dealers in their respective geographic markets, including their penetration of various market segments (e.g., the small car segment). On a semi-annual basis, the company also reviewed each metro market throughout the United States. If the reviews showed significant problems, a full-fledged market study might be ordered to analyze the deficiencies and recommend improvements. Finally, the company also performed market studies in response to requests from executive staff or based upon information received from regional/zone management employees.
Green's department was responsible for performing market studies, evaluating the data generated, and making recommendations to Richard Colliver, American Honda's Executive Vice President. Colliver was responsible for making the ultimate decision as to whether a new dealership was needed.
A. The Decision to Establish a New Honda Dealership in Hamilton
In 2000, at the request of regional management, Green's department completed a market study of the southwest New Jersey market. Another "mini-study" was performed in 2001. As defined by American Honda, the southwest New Jersey market consisted of Atlantic, Burlington, Camden, Cumberland, Gloucester, Mercer, and Salem Counties. The market was served by three Honda dealerships: Willis Honda in Burlington; Burns Honda in Marlton; and Classic Honda in Turnersville.
As a result of the study, American Honda concluded that the company was underperforming in the market and not achieving the standards that it expected. The company further concluded that it was "significantly out-dealered." It had only three dealers in the southwest New Jersey market, whereas Toyota had five, and Nissan had six. Finally, the company concluded that the market had a strong and growing economic and demographic base. Due to the company's underperformance and lack of adequate dealership representation, however, the company was suffering lost opportunity for additional sales and service.
To address these deficiencies, American Honda decided to establish a new dealership in Hamilton Township. Green and other witnesses referred to this as establishing an "open point" in Hamilton, meaning a dealership location that has been created but not yet filled with a dealer.
B. American Honda Offers Willis an Opportunity to Relocate, to Fill the Open Point in Hamilton
Willis Honda was established in 1977 as a fifty/fifty partnership between Roland Willis and Dave Davis.*fn3 The dealership was located in Burlington, New Jersey, approximately 12.2 miles from the proposed Hamilton open point. Therefore, it was the only dealership within the "relevant market area,"*fn4 with standing under the Act to protest the creation of a new dealership. N.J.S.A. 56:10-16; N.J.S.A. 56:10-19.
The 2000 market study recommended that Willis relocate from Burlington to Hamilton, in order to fill the newly-created Hamilton open point. Under this scenario, American Honda anticipated that, once the Hamilton dealership was operational, Willis would discontinue its Honda operations in Burlington. Once the Hamilton dealership had opened and the Burlington dealership had closed, Willis could utilize its Burlington property for any purpose it chose, including a different motor vehicle franchise. However, Willis could not use the property as a Honda dealership, because at that point Willis would have moved the franchised business to Hamilton.
Upon Willis's relocation to Hamilton, however, American Honda would consider Burlington an open point that could be "back filled" with a new Honda franchisee. The company did not plan to immediately back fill Burlington with another dealer. Instead, it intended to monitor the situation for a possible back fill, if there existed lost opportunity in the marketplace. According to Green:
[T]he question is . . . would the dealer network that exist[s] in that dealer marketplace with the relocation of Burlington to Hamilton Square, would they penetrate the market enough to satisfy the lost opportunity in the marketplace. If that did not take place, we would consider additional representation. If it did take place, if the lost opportunity was eliminated we may not request or establish a new point.
Any back fill in Burlington most likely would operate out of a different, superior location than that utilized by Willis.
Moreover, the back fill process could take some time. Ultimately, however, American Honda management believed the southwest New Jersey market could support four Honda dealerships. Accordingly, Dave Davis was advised that, should Willis choose to relocate to Hamilton, there was a strong likelihood that Burlington eventually would be back filled.
American Honda believed that its proposal was fair to Willis. The market study concluded that Willis's Burlington dealership was located in a declining retail area, and that its facilities did not meet American Honda's minimum standards. The proposed relocation gave Willis the opportunity to move to a superior location, and to construct a new facility that met American Honda's image standards and minimum facility guidelines.
In addition, since the late 1980's or early 1990's, Willis had been asking for permission to relocate to Hamilton. Indeed, Davis suggested that possibility when he was interviewed as part of the 2000 market study. Therefore, the recommendation that Willis relocate to Hamilton was consistent with its owners' expressed desires.
However, American Honda would not compel Willis to relocate. In July 2000, representatives of American Honda presented the results of its market study to the three existing dealers in the southwestern New Jersey market, including Willis. The company advised that Willis could remain in Burlington. Alternatively, if Willis wanted to relocate to Hamilton, it would have eighteen months to make progress towards that goal; if it did not do so, American Honda would then seek to fill the Hamilton location through the company's open point procedure, in which applicants would compete for the franchise.
In his testimony, Davis admitted that he was present at the market study presentation, and that he was offered the options of either relocating the Willis dealership to Hamilton or remaining in Burlington. However, he denied being told that he would have eighteen months to relocate. He claimed he first learned about that time frame in a letter from Colliver dated April 2001. Moreover, Davis claimed that it was at the market study presentation that he first learned of the possibility of a back fill in Burlington, and he was "dumbfounded" by that possibility. He testified that back filling that location would undermine his relocated Hamilton dealership if he chose to move.
After the market study presentation, representatives of American Honda and Willis communicated both orally and in writing regarding the possibility of Willis's relocating to Hamilton, and there were internal discussions at Honda about the issue. The sticking point in the parties' discussions was Davis' desire to not only fill the open point in Hamilton, but also to continue operating the Burlington dealership for a period of five years, after which he would sell the Burlington dealership to a third party. Based on his proposals, Davis evidently believed that the southwest New Jersey market could sustain four Honda dealerships, urging American Honda that as a result of his plan "[u]ltimately, Honda would end up with four new IMAGE dealerships lined up from Hamilton all the way South to Turnersville."
American Honda's management, however, was not receptive to Davis' proposal, which they viewed as Davis wanting to "have his cake and eat it too." In other words, Davis would receive the financial benefit of the Hamilton dealership, by opening the dealership without having to compete for it through Honda's open point process. At the same time, Davis also would retain the financial benefit of the Burlington dealership, by either keeping it and running it himself or by selling it to a third party at a future date. If he sold it to another Honda dealer, he would in effect be conferring an open point franchise on a candidate who had not competed for it through Honda's established process.
American Honda's Executive Vice President Colliver rejected Davis' proposal as contrary to the company's policy against the same dealer owning two contiguous dealerships, which was intended to foster competition, and the company's policy that each open point be competitively filled. Colliver insisted that he could not make an exception to these policies for the benefit of one dealer.
In March 2001, Honda communicated its decision to Davis, reiterating the company's position that, if Willis wanted to fill the open point in Hamilton, Willis would have to relocate its entire Burlington dealership to Hamilton, discontinuing Honda operations in Burlington. Alternatively, Willis could remain in Burlington.
C. American Honda Awards the Hamilton Open Point to Another Dealer
In December 2001, eighteen months after the market study presentation in July 2000, American Honda and Davis had been unable to reach an agreement on Willis's relocation. Accordingly, Honda advised Davis that it planned to initiate its open point process and move forward with filling the open point in Hamilton.
Thereafter, Honda engaged in its normal candidate selection process with respect to the open point in Hamilton. This included reviews of documentation submitted by approximately fifty applicants, requests for additional information and documentation from certain applicants, and interviews of a limited number of applicants.
Ultimately, zone management recommended that Honda select the team of Michael Saporito and Jessie Armstead, who would operate the Hamilton dealership under the corporate name All Star Motors. Willis questioned Honda's good faith in establishing an open point in Hamilton and in selecting Saporito and Armstead to fill that open point. For example, Willis suggested that Honda might have reserved the Hamilton location for a minority candidate and selected Armstead because he was African-American, notwithstanding his lack of experience in the industry. American Honda's management, however, believed Saporito and Armstead were well-qualified candidates. Saporito had significant experience in the industry, and Armstead possessed both financial strength and a desire to learn the business. In any event, it was not unusual for the company to enter into an agreement with a less experienced dealer. Honda looked for individuals it could train and develop, and it looked to partner such individuals with other investors.
D. Expert Testimony
In support of its protest, Willis presented an expert witness, Ernest Manuel, Jr., who had twenty years of experience performing analyses of retail automobile markets. Manuel was president of The Fontana Group, a consulting firm that provided "economic consulting services and expert testimony regarding the retail motor vehicle industry throughout the United States and Canada." A large portion of his work consisted of providing expert testimony in litigation.
Manuel opined that, with its existing dealerships, American Honda was achieving adequate market penetration in the "study area" he considered. Honda's performance in the study area was in excess of the zone average, and there was insufficient opportunity for a new dealership in Hamilton "without having a substantial adverse impact on the surrounding dealers. Not only Willis Honda, but other Honda dealers as well." Manuel further opined that the existing Honda dealerships were providing adequate sales and services to customers inside the relevant market area. Therefore, Honda currently had an adequate number of dealerships in the area, without addition of the proposed dealership in Hamilton.
Manuel admitted that Willis's market penetration in the relevant market area, as defined by the statute, N.J.S.A. 56:10-16, was below the zone average. Therefore, the statutory presumption of injury under N.J.S.A. 56:10-23(b)(1) did not apply. Nevertheless, Manual opined that there should be a presumption of injury under N.J.S.A. 56:10-23(b)(2), because establishment of a new Honda dealership in Hamilton would cause a twenty-five percent or greater reduction in Willis's sales and gross income. Manuel opined that Willis would lose between twenty and fifty percent of new vehicle sales based upon lost geographical advantage, notwithstanding any competitive response mounted in relation to the new dealership, and notwithstanding any potential growth in the market.
Therefore, according to Manuel, establishment of the proposed Hamilton dealership "would have a substantial negative effect on the profitability of the [Willis] dealership and call into question its stability as a business because of that impact on profitability." He concluded that "[t]he destabilization of Willis Honda would cause a substantial deterioration in Willis Honda's ability to provide stable, adequate and reliable sales and service to Honda customers in the RMA [relevant market area] and elsewhere, in part by reducing the incentive for Willis Honda to expand and modernize its facilities." Indeed, Manuel opined that, in his experience, "in the vast majority of cases if you put a new dealer in[,] the closest existing dealers will do worse than they would have without the new dealer."
American Honda presented its own expert, James Anderson, who was the founder of Urban Science, a software development and consulting company that had offices around the world and served virtually every automobile manufacturer in the United States. Urban Science's three "core practice areas" included: dealer network analysis, i.e., determining the proper number and location of dealers necessary to adequately serve a market place; site analysis, or measuring the performance of existing dealers; and customer analysis, meaning identifying those customers most likely to purchase a particular dealer's products at a certain point in the future, so that the company may tailor its marketing messages to those prospective customers. Anderson had testified as an expert witness in approximately 250 cases. However, Urban Science's methodology was not designed for litigation "but for day to day use in managing the affairs of a dealer network," and only between five and ten percent of the company's gross income came from litigation services.
American Honda had an ongoing contractual relationship with Urban Science. It used Urban Science's software, and a number of Urban Science employees were assigned to Honda, working on-site in order to develop and monitor software for the company and to instruct Honda employees on the use of that software. Nevertheless, only between three and five percent of Urban Science's revenue came from American Honda, and Urban Science served as a consultant to many other automobile manufacturers.
With respect to the merits of Willis's protest, Anderson concluded that the existing Honda dealer network was performing well below expectations with respect to market penetration in the relevant market area, and that lag existed across various market segments. Therefore, Anderson opined that "[t]he existing Honda dealer network has not and is not providing adequate, reliable, and stable sales and related service to Honda purchasers in the relevant market area."
Anderson further opined that there was a causal connection between Honda's inadequate sales in the relevant market area and the lack of dealer representation in Hamilton. He stated: "The inadequate Honda sales in the Hamilton Square RMA are the result of consumers not being provided adequate intra and inter brand competition, or customer convenience, which is a result of not being represented in the Hamilton Square ASA [area of statistical analysis]." In Anderson's opinion, Honda needed another dealership in order to adequately serve the market. Willis could not adequately serve the relevant market area around Hamilton, and it was not doing so at present.
Given the foregoing opinions, Anderson further opined that: "The proposed addition of a Honda dealership at the Hamilton Square site is an appropriate response to the inadequacies [previously] identified . . . and it will improve the stability, reliability, and adequacy of Honda sales to Honda purchasers in the relevant market area." The addition of a Hamilton dealership would lead to significant improvement in customer convenience with respect to Honda consumers in the Hamilton area.
Anderson testified that adding a Hamilton dealership would actually have a positive impact on Willis. The new dealership would enhance intra brand competition and thereby improve the stability, reliability, and adequacy of sales provided by Willis. First, Anderson opined that there was sufficient untapped market opportunity to support a reasonably sized dealership in Hamilton "without taking any sales whatsoever from the other RMA dealer, Willis." The market was experiencing dramatic growth in terms of overall population, driving-age population, households, income, and employed population, and there was sufficient market opportunity for another dealership.
Second, introduction of a Hamilton dealership would encourage Willis to adequately capture sales in its own area of geographic advantage--something it was not doing at present. Anderson explained:
When a dealership gets added, if it's allowed to do so in Hamilton Square, it will create more intra-brand competition, and the natural response to that is to try harder, and the natural effect of trying harder is higher capture rates close to the dealer in the ASA where you have the geographic advantage.
So in essence, you could think of intra-brand competition being increased as . . . giving them higher capture rates close to home, perhaps at the expense of lower capture rates in the Hamilton Square ASA, but even that is not necessary[.]
Thus, adding a Hamilton dealership would stimulate a competitive response from the existing dealerships, including Willis. The dealership that took advantage of the stimulated competitive environment would capitalize on the potential for additional, presently-untapped sales, and geography would only be one factor in the consumers' decision-making. Willis, which had a high level of profitability and a strong following of customers, was well-placed to respond to enhanced competition.
Anderson testified that the statutory thresholds of N.J.S.A. 56:10-23(b) had not been met in order to create a presumption of injury to Willis or to the public interest. First, Willis's average penetration of the Hamilton relevant market area, and of its own area of statistical analysis, was below Honda's average penetration in the zone. Second, as previously discussed, Anderson did not expect Willis to lose sales or income as a result of the proposed Hamilton dealership.
Finally, Anderson opined that, in studying comparable "add point" cases, two-thirds of existing dealers experienced increased sales after the addition of the new dealership. The remaining one-third did not increase sales, but for identifiable reasons that were unrelated to the new dealership. Anderson testified that these case studies proved his point about the dynamic nature of markets, in particular, the significance of market growth, and the increased intra-brand competition created by the addition of a new dealership.
The differences in opinion between Anderson and Manuel were attributable in part to their different study methodologies. For example, the two experts studied different geographic areas, resulting in the generation of different statistics and different conclusions. Anderson studied "the relevant market area," as defined by N.J.S.A. 56:10-16, which consisted of a geographic area 12.2 miles in radius around the proposed Hamilton dealership. By contrast, Manuel opined that the primary function of the 12.2 mile radius was to establish standing to protest the addition of a new dealership. Accordingly, while Manuel considered the 12.2 mile radius, he did not limit his analysis to that geographic area. He also considered an additional 137 square miles of geography, which included the 12.2 mile circle plus the census tracts with at least ten percent of their area within the circle. The experts were critical of each others' methodologies and conclusions on other grounds as well.
E. The ALJ and Committee Decisions
In a comprehensive twenty-five page initial decision, Administrative Law Judge Hurd (ALJ) recommended that the agency reject Willis Honda's protest. The ALJ concluded that American Honda's employees gave credible testimony concerning the company's good faith economic reasons for wanting to create a new open point in Hamilton. He also credited their reasons for rejecting Davis' proposals that he be allowed to operate two contiguous dealerships in Burlington and Hamilton or that he be permitted to sell the Burlington facility to another Honda dealer after moving his operation to Hamilton. The ALJ did not find Davis to be a credible witness and in particular noted the inherent contradiction in his claim that the Burlington and Hamilton dealerships could both be economically viable, but only if he ran them both. The ALJ also credited American Honda's interpretation of its 2000 market study as contemplating that there would be four open points, or available dealership opportunities, in the southwest New Jersey market.
For reasons he explained in considerable detail, the ALJ also found American Honda's expert witness, Anderson, to be more credible and persuasive than Willis Honda's expert, Manuel. In particular, he was impressed that Anderson's analysis relied on the same standard methodology that Anderson employed in the ordinary course of his business as an auto industry consultant, while Manuel's analysis relied on a methodology he created for purposes of this litigation. The ALJ credited Anderson's testimony that franchising a new dealership in Hamilton would not cause injury to Willis's business and in fact would assist Honda sales in the southwest New Jersey market overall.
Although the ALJ found that All Star was a legitimate minority dealer for purposes of N.J.S.A. 56:10-23(c), it was unnecessary to apply subsection c to defeat the presumption of harm under N.J.S.A. 56:10-23(b), because Willis Honda had not proven that it was entitled to the subsection b presumption of harm in the first place.
The Committee adopted the ALJ's initial decision, concluding that it was supported by substantial credible evidence.
On this appeal, Willis Honda raises the following points for our consideration:
POINT I: THE ALJ AND COMMITTEE ERRED IN FINDING HONDA'S EXPERT TO BE INDEPENDENT AND IN ADOPTING HIS NET OPINIONS. WITHIN THE MEANING OF THE ACT, ALL STAR'S ESTABLISHMENT WOULD CAUSE SUBSTANTIAL INJURY TO WILLIS AND THE PUBLIC.
A. The Motor Vehicle Franchise Committee Merits No Judicial Deference As It Is Not An Operational "Administrative Agency" With Special Experience Or Expertise.
B. Anderson's Conclusions Were Net Opinions That Merited No Weight.
1. Anderson Purposely Neglected To Consider Honda's Detailed Market Study, Which Determined That No Additional Dealers Were Needed. His Ignorance Of The Seminal Study Rendered His Conclusion Net Opinions.
2. With No Factual Predicate, Anderson's Opinions Rested Upon An Illusory Theory Of "Stimulated Competitive Response."
3. "Injury" To Sales And Profits Can Only Mean Economic Injury. The ALJ And Committee Erred In Accepting Anderson's Flawed Interpretation Of "Injury."
4. Injury Analysis Cannot Rationally Be Limited Solely To The RMA. Anderson's Conclusions, Relying On A Misinterpretation Of The Act, Were Net Opinions.
C. The Finding of Injury Under Sections 18 And 23(a).
POINT II: EVIDENCE OF HONDA'S BAD FAITH WAS CLEAR AND UNREBUTTED. COMBINED WITH EVIDENCE OF SOME ECONOMIC HARM WILLIS PROVED INJURY, ESTABLISHING AN INDEPENDENT BASIS FOR ENJOINING ALL STAR'S ESTABLISHMENT.
POINT III: JESSIE ARMSTEAD WAS NOT A BONA FIDE MINORITY APPLICANT AND, THEREFORE, NOT A "PROPOSED FRANCHISEE" UNDER N.J.S.A. 56:10-23(c). THE MINORITY IMMUNITY FROM THE STATUTORY PRESUMPTIONS SHOULD NOT HAVE BEEN AVAILABLE TO ALL STAR, AND WILLIS ESTABLISHED THE FACTUAL PREDICATES FOR ENTITLEMENT TO THE PRESUMPTION OF INJURY UNDER N.J.S.A. 56:10-23(b)(2).
A. Armstead, With No Relevant Experience And No Control Over All Star, Is Not A Bona Fide Proposed Dealer.
B. Willis Established The Facts For Entitlement To The Presumption of Injury.
POINT IV: THE APPELLATE DIVISION HAS ORIGINAL JURISDICTION ON APPEAL OVER THE RACE-BASED PREFERENCE OF N.J.S.A. 56:10-23(c), WHICH IS FACIALLY UNCONSTITUTIONAL.
(This Issue Was Not Raised Below Because Subject Matter Jurisdiction Did Not Exist There.)
Having reviewed the entire record, we conclude that Points I and II are without sufficient merit to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), and we affirm substantially for the reasons stated in the comprehensive opinion of ALJ Hurd and the Committee's written decision. We add the following comments.
None of the cases Willis cites support its request that we review the factual record de novo, and we decline to do so. Rather, we employ the well-established test for appellate review of agency factfinding to determine whether the agency's decision was supported by substantial credible evidence. See Sager v. O.A. Peterson Constr. Co., 182 N.J. 156, 163-64 (2004). Here, the agency's decision was based on comprehensive factfinding by ALJ Hurd which, in turn, was amply supported by the evidence.
The ALJ's decision to credit the testimony of American Honda's expert rather than petitioner's expert is unassailable on this record. American Honda's expert, James Anderson, rendered a detailed opinion which ALJ Hurd found convincing for reasons he cogently explained. Willis faults Anderson's opinion because he did not consider or rely on the 2000 Honda market study, instead employing his own analysis, and because Willis disagrees with the geographic area Anderson used in formulating his expert report. However, the fact that Willis disagrees with Anderson's methodology does not convince us that his report or his testimony constituted net opinions.
The failure of an expert to give weight to a factor thought important by an adverse party does not reduce his testimony to an inadmissible net opinion if he otherwise offers sufficient reasons which logically support his opinion. Rather, such an omission merely becomes a proper "subject of exploration and cross-examination at a trial." [Rosenberg v. Tavorath, 352 N.J. Super. 385, 402 (App. Div. 2002) (citations omitted).]
The ALJ's conclusion, that Willis failed to prove that granting All Star a franchise would cause injury to Willis or to the public, is supported by substantial credible evidence. See Sager v. O.A. Peterson Constr. Co., supra, 182 N.J. at 163-64; In re Taylor, 158 N.J. 644, 657 (1999); R. 2:11-3(e)(1)(D).
Finally, we do not need to address petitioner's arguments under N.J.S.A. 56:10-23(c). The agency accepted the ALJ's well-grounded conclusion that "based on the expert testimony and reports, [Willis] would not qualify for a presumption [of injury] in N.J.S.A. 56:10-23(b), even if N.J.S.A. 56:10-23(c) did not apply." Therefore, we need not address Armstead's status as a minority owner under N.J.S.A. 56:10-23(c) or petitioner's challenge to the constitutionality of that provision. As to the latter issue, we specifically decline to address a constitutional question that we do not need to reach and as to which there is no factual record. See Donadio v. Cunningham, 58 N.J. 309, 325-26 (1971).