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Ocean City Express Co., Inc. v. Atlas Van Lines, Inc.

United States District Court, D. New Jersey

September 11, 2014

OCEAN CITY EXPRESS CO., INC., Plaintiff,
v.
ATLAS VAN LINES, INC., Defendant

For Plaintiff: Jeffrey H. Sutherland, Esq., JEFFREY H. SUTHERLAND, PC, Linwood, N.J.

For Defendant: Gary Francis Seitz, Esq., RAWLE & HENDERSON, LLP, Marlton, N.J.

OPINION

Page 504

JEROME B. SIMANDLE, Chief United States District Judge.

I. INTRODUCTION

The matter comes before the Court on Defendant Atlantic Van Lines, Inc.'s (hereinafter, " Defendant" ) motion to dismiss Plaintiff's Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). [Docket Item 20.] Plaintiff Ocean City Express Co., Inc.'s (hereinafter, " Plaintiff" ) two-count Amended Complaint asserts claims for violation of the New Jersey Franchise Protection Act (hereinafter, the " NJFPA" ) and for breach of the implied duty of good faith and fair dealing. Defendant generally alleges that Plaintiff fails to state a viable claim under the NJFPA and, alternatively, that federal law preempts the NJFPA as applied to the parties' relationship. Defendant also challenges Plaintiff's Amended Complaint to the extent it reasserts a good faith and fair dealing claim.

The Court has previously addressed, on two separate occasions, the viability of Plaintiff's claims. In the first such ruling, the Court granted Defendant's motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6),

Page 505

and dismissed as moot Defendant's motion for improper venue under Federal Rule of Civil Procedure 12(b)(3). See Ocean City Express Co., Inc. v. Atlas Van Lines, Inc., No. 13-1467, 2013 WL 3873235, at *5 (D.N.J. July 25, 2013). In the second, the Court denied Plaintiff's motion to amend pursuant to Federal Rule of Civil Procedure 15(a) and dismissed with prejudice Plaintiff's good faith and fair dealing claim.[1] See Ocean City Express Co., Inc. v. Atlas Van Lines, Inc., No. 13-1467, 2014 WL 654589, at *7 (D.N.J. Feb. 19, 2014). With respect to Plaintiff's NJFPA claim, the Court concluded that Plaintiff pleaded facts sufficient to satisfy the license, community of interest, gross sales, and sales percentage requirements of the NJFPA, but failed to plead the requisite facts with respect to the NJFPA's place of business requirement. [WL] at *7. The Court accordingly dismissed without prejudice Plaintiff's NJFPA claim. Id.

The principal issues now before the Court are whether Plaintiff, in its third attempt, states a plausible NJFPA claim and, relatedly, whether federal law preempts application of the NJFPA in this instance. For the reasons explained below, the Court will deny in part and dismiss as moot in part Defendant's motion to dismiss.

II. BACKGROUND

A. Factual Background

The facts set forth below are those alleged in Plaintiff's Amended Complaint, which the Court accepts as true for the purposes of the pending motion. Defendant Atlas Van Lines, Inc., an entity incorporated in Indiana, and with its principal place of business in Evansville, Indiana, engages in interstate commerce as a motor carrier registered with the Department of Transportation. (First Am. Compl. [Docket Item 18], ¶ 3 & Ex. A.)

On or about March 31, 2006, Defendant entered into an agency agreement with Plaintiff Ocean City Express Co., Inc., a corporation formed in New Jersey and with a principal place of business in Pleasantville, New Jersey. (First Am. Compl. at ¶ 4.) In the agreement, Plaintiff generally agreed to represent and act on Defendant's behalf in connection with Defendant's " business as an interstate common and contract motor carrier and property broker." (Id., Ex. A.) Plaintiff alleges that compliance with the agency agreement required it to incur " substantial expense" in order to conform its markings, signage, and printed materials to Defendant's requirements. (First Am. Compl. at ¶ 5.) Despite the initial expense, Plaintiff asserts that its gross sales arising out of the agency agreement amounted to more than $35,000 within the twelve months preceding this action, that " gross sales for 2010 exceeded $2.7 million[,]" and that " gross sales for 2011 exceeded $1.8 million." (Id. at ¶ 7.) Plaintiff further alleges that the revenue derived from the agency agreement " comprised between 85% and 90% of Plaintiff's total revenue." (Id. at ¶ 8.)

Page 506

Plaintiff also asserts that the NJFPA governs the " business relationship" between the parties, including " Defendant's performance" pursuant to the agency agreement, with Plaintiff acting as " 'Franchisee'" and Defendant assuming the role of " 'Franchisor'" under the NJFPA. (Id. at ¶ 6.) Plaintiff alleges, however, that Defendant violated the NJFPA by terminating the agency relationship on December 17, 2010, without " 'good cause'" under the NJFPA for such termination. (Id. at ¶ 9-10.) Plaintiff accordingly seeks to recover the monetary damages it incurred as a result of Defendant's purportedly improper termination. (Id. at ¶ ¶ 11-14.)

B. Procedural History

Defendant removed this action from the Superior Court of New Jersey on March 11, 2013. (See Notice ...


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