New Jersey Lemon Law Lawyer Blog

Where to Sue a Car Dealership? Part II

July 15, 2009 | Jonathan Rudnick

New Jersey courts should be especially accommodating to their own citizens seeking justice at home. “An action by or against a resident will ordinarily not be dismissed as being in an inconvenient forum….” Gore v. United States Steel Corp., 15 N.J. 301, 311 (1954). Although domestic residence is not decisive, “there is a strong presumption in favor of retaining jurisdiction where the plaintiff is a resident who has chosen his [or her] home forum.” It is only in those exceptional cases where a weighing of all of the many relevant factors, of which residence is but part, decisively establishes that there is available another forum where trial will best serve the convenience of the parties and the ends of justice, that the doctrine is ever invoked. See In re Vioxx Litigation 395 N.J.Super. 358, (App.Div. 2007). In Mastroneada v. Occidental Hotels Management 391 N.J.Super. 261 (App.Div 2007) the Appellate affirmed the trial court’s decision to permit the plaintiff’s selection of New Jersey as the forum for an accident occurring in Mexico based on this principle.

The plaintiff does not dispute the list of factors for the court to review, which are as follows:

Private interest factors

Where Can you Sue a Car Dealership?

July 8, 2009 | Jonathan Rudnick

Under the relevant due process inquiry, the forum state’s exercise of jurisdiction must be reasonable, which is measured by the “minimal contacts” doctrine, a threshold requirement for specific personal jurisdiction. Hanson v. Denckla, 357 U.S. 235, 251, 78 S.Ct. 1228, 1238, 2 L.Ed.2d 1283, 1296 (1958); International Shoe v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Waste Management, supra, 138 N.J. at 119-20, 649 A.2d 379; Lebel, supra, 115 N.J. at 322, 558 A.2d 1252. Minimal contacts requires “that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson, supra, 357 U.S. at 253, 78 S.Ct. at 1240, 2 L.Ed.2d at 1298. Under a specific jurisdiction analysis, the minimum contacts inquiry must focus on “the relationship among the defendant, the forum, and the litigation.” Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683, 698 (1977); Lebel, supra, 115 N.J. at 323, 558 A.2d 1252.

In applying the “minimum contacts” test, we focus on the relationship among the defendant, the forum, and the litigation. The “minimum contacts” requirement is satisfied so long as the contacts resulted from the defendant’s purposeful conduct and not the unilateral activities of the plaintiff. This “purposeful availment” requirement ensures that a defendant will not be hauled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts. The question is whether the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being hauled into court there. Lebel v. Everglades Marina, Inc., 115 N.J. 317, 323-24, 558 A.2d 1252 (1989)

Both the Appellate Division and the New Jersey Supreme Court have held that the seller of retail goods in another state is subject to the jurisdiction of the State of New Jersey. The Supreme Court specifically held in Lebel v. Everglades Marina, Inc., 115 N.J. 317 (1989) that, “In comparison, the marketer of a big ticket luxury item that accomplishes the sale by solicitation of out-of-state buyer in the buyer’s state can fairly be expected to contemplate that a breach of contract will expose it to a suit in the forum of the buyer. We thus find this does not offend our notions of substantial justice and fair play to ask the seller of this special order, Luxury Vessel, to account for its negotiations of the transaction in a New Jersey court.”

Class Actions & Common Questions of Facts

July 4, 2009 | Jonathan Rudnick

Courts construing R. 4:32-1(b)(3) have repeatedly stressed that the Rule only requires a predominance of common questions, not an identity of all issues. See, e.g., Fiore v. Hudson County Employees Pension Comm.,151 N.J. Super. 524, 528 (App. Div. 1977); Lusky v. Capasso Bros., 118 N.J. Super. 369, 372 (App. Div.), certif. denied, 60 N.J. 466 (1972). In Delgozzo, supra, the Appellate Division stated that a court may certify a class “even though individual questions, such as degree of damages due a particular class member, or reliance by individual class members on defendants’ alleged misrepresentations, may remain following resolution of the common questions.” 266 N.J. Super. at 181; Strawn v. Canuso, 140 N.J. 43, 67 (1995) (certifying class of landowners). Despite these instructions, defendants’ opposition offers nothing more than a hodgepodge of the typical and over-used arguments that class certification is inappropriate because generalized individual questions and affirmative defenses exist, a position routinely rejected by the New Jersey Supreme Court.

For example, in Iladis v. Wal-Mart Stores, Inc., 191 N.J. 88 (2007), the plaintiff moved to certify a class of current and former New Jersey employees of Wal-Mart for unpaid work. Before the Supreme Court, Wal-Mart argued that the trial court’s and Appellate Division’s decisions denying class certification should be affirmed because of numerous individual issues, including, but not limited to, “whether particular employees voluntarily missed rest and meal breaks; why employees who worked off-the clock did not avail themselves of the curative time-clock procedure; how much time was worked off-the-clock; whether employees worked off-the clock with the expectation of compensation; and how much in damages employees suffered, if any.” Id. at 112.

In reversing the lower courts, the Court focused on Wal-Mart’s common course of conduct towards its employees. See id. at 111-12 (describing common factual, legal and evidentiary issues). It determined that, even though there were numerous and material individual issues of fact, they did not prevent or foreclose a finding of predominance or that class certification was inappropriate. Id. at 112. In particular, the Court relied upon its earlier decision in In re Cadillac, supra. As explained by the Iliadis Court:

Truecar.com: A Consumer’s Site

June 30, 2009 | Jonathan Rudnick

Recently, I was surfing the internet and discovered a site through news releases that is actually very useful.

The site is truecar.com and the basic underpinnings of this site are the consumers’ ability to access purchase information for vehicles. Apparently truecar.com has the availability of some sort of database or survey information pertaining to what people have paid for various vehicles as well as the extras. It then provides some sort of analysis – maybe a regression analysis – as to the appropriate or average price for these vehicles. With this site, you get information pertaining to what the market is bearing for a particular vehicle with particular options. Since most individuals do not have the ability to go to auctions or have the access to information that dealerships have, I would say that the availability of this information at truecar.com would be essential, if it is in fact accurate. I have no knowledge whether or not this information is accurate or the source of their information. However, the basic concept underlying truecar.com I completely support because it assists consumers in providing them with more information on their purchasing decision. If you are buying a car, it would seem to be a reasonable resource to avail yourself of, to have as much as if not more knowledge than the dealership pertaining to the pricing practices or pricing patterns of a particular car in a particular market. With regard to information, more is always better.

Federal Trade Commission Consent Decree and Kellogg

June 12, 2009 | Jonathan Rudnick

Under New Jersey Law, it violates the New Jersey Consumer Fraud Act to make an affirmative misrepresentation of fact as the seller attempted sale of a product. It does not matter that nobody has been misled but there is the capacity to mislead, which is the primary ingredient of consumer fraud.

There has been an investigation opened by the Federal Trade Commission which has been resolved recently with Kellogg. It appears as though Kellogg was misrepresenting the benefits of Frosted Mini-Wheats. Kellogg was making claims on their advertising that Frosted Mini-Wheats was “clinically shown to improve kids’ attentiveness by 20%”. The FTC opened an investigation because they claimed that it was false and violated federal law. It appears as though the complaint was based on a certain study which demonstrated the improved attentiveness of the children. According to the FTC news release, this was in fact not accurate. It appeared as though just under 11% had better attentiveness. It appears as though the commission approved to the administrative complaint and the proposed consent agreement. It is open to public comment for 30 days beginning and continuing through May 19, 2009.

Public Citizen

New Jersey Office of Attorney General Division of Consumer Affairs

June 7, 2009 | Jonathan Rudnick

The New Jersey Attorney General’s Office, through the Division of Consumer Affairs, conducts investigations and files suits on behalf of the state against various businesses alleged to have potentially committed acts in violation of New Jersey Law. As an example, there was a press release on June 5, 2009 indicating that the state filed suits against Air Duct Cleaning Services. The defendants, United Air Care, Inc. and Indoor Air Care, LLC were alleged to have advertised “whole-house duct cleaning” for $39.95 to $69.95. The Attorney General’s Office is then alleging that the businesses induced the consumers to purchase more expensive services. It appears also that these businesses were not licensed or registered as home improvement contractors with the Division of Consumer Affairs. The Attorney General’s Office, through the Division of Consumer Affairs, filed an eight-count complaint alleging violations of the New Jersey Consumer Fraud Act, Contractor Registration Act and Home Improvement Practices Regulations. The Attorney General’s Office is alleging bait and switch advertising, failure to register, providing coupons of failing to honor those services, causing damage to consumer’s home and then failing to fix those damages, misrepresenting receipt of refunds or reimbursements, requiring consumers to sign estimates and not providing copies of those, and deceptive advertising.

This is but just one of various investigations and a complaint that the state has opened up in the last few years. Another example is on June 3, 2009, the state reached settlement with Rubin & Raine of New Jersey LLC. This pertained to certain collection efforts on behalf of Pascack Valley Hospital. Also, on April 14, 2009, the Division of Consumer Affairs issued a press release indicating that a tax preparation firm which was sued had reached settlement. The business involved was Malqui Financial Group, Inc. and Fast Tax Express Corp., both of which did business as Malqui Tax.

The Division of Consumer Affairs recently reached settlement with Rubin & Raine, Inc. and Rubin & Raine of New Jersey, LLC. There was no admission of any wrongdoing and they agreed to comply with the State Consumer Fraud Act and Collection Agency Statute and Fair Debt Collection Practices Act.

Is there individual liability for consumer fraud?

May 30, 2009 | Jonathan Rudnick

The New Jersey Consumer Fraud Act and individual liability

The definitional section of the New Jersey Consumer Fraud Act is straightforward re: The Act to persons. The New Jersey Supreme Court has explained that the Act is wide-ranging remedial legislation and should be liberally interpreted to effectuate its remedial purposes. Despite the plain language of the statute and the express statements made by the New Jersey Supreme Court, there have been various businesses and/or individuals who have argued that the New Jersey Consumer Fraud Act did not apply to them. There are some exceptions to the application of the New Jersey Consumer Fraud Act; however, these exceptions are limited. Generally, lawyers, utilities and hospitals are exempt from the New Jersey Consumer Fraud Act. The primary reason that these particular businesses are exempt from the New Jersey Consumer Fraud Act is that they have their self-contained regulatory bodies. As an example, lawyers are regulated by the Supreme Court and not by the Consumer Fraud Act.

There have been cases which have interpreted the seller’s of real estate, individual sellers, to be exempt from the wide-ranging penalties of the New Jersey Consumer Fraud Act. The New Jersey Supreme Court recently decided a case that held the definitional section of the Act is self-explanatory in that it applies to all persons. This means that if you individually sell a particular product, you will be subject to the provisions of the New Jersey Consumer Fraud Act if you are a person. A person could be an individual or a legal fiction such as a corporation. In Lyle Real v. Radir Wheels, Inc. and Richard Conklin, the individual defendant, Richard Conklin, argued that he was not subject to the penalties of the New Jersey Consumer Fraud Act and that he is exempt from liability. The Appellate Division dismissed the case but ultimately the Supreme Court held that since he is a person under the Act, he is subject to the restrictions of the New Jersey Consumer Fraud Act.

Lemon Law and Bankruptcy: Update

May 29, 2009 | Jonathan Rudnick

There is an internet news release indicating that Daimler will honor warranty claims and Lemon Law Claims.

Hopefully we will get some specifics and provide another update.

The Law Office of Jonathan Rudnick
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Lemon Law and Bankruptcy: What to Do?

May 25, 2009 | Jonathan Rudnick

What is a consumer to do when a major manufacturer declares a bankruptcy?

Many people are asking this question in light of the anticipated bankruptcy of General Motors and the currently filed bankruptcy of Daimler Chrysler. Many consumers and vehicle purchasers feel that they are without an option with regard to making a claim for breach of warranty or Lemon Law under New Jersey law or any other law. There are various other claims associated with the sale of a vehicle which do not necessarily require the presence of the manufacturer as the defendant. There are various claims which a purchaser of a vehicle can make against the seller of a vehicle. In the case in which the seller and the manufacturer are bankrupt and there are still remaining claims against the finance company, assuming it was financed through the selling dealership. Quite frequently, the finance companies are holders of the retails on the sales contract and are subject to the holder rule. The holder rule requires that the holder of the paper, usually a finance company, is subject to all claims that the purchaser of the automobile will have against the seller. In addition, the holder of the paper would have all the defenses that the seller of the automobile would have.
So hypothetically, if an individual were to purchase a vehicle from a Chrysler dealer and the dealer was still in business, the plaintiff would have most of his claims against the selling dealer as well as the finance company, if the appropriate steps were taken. The exception to this would be the Lemon Law claim, since New Jersey Lemon Law applies to new car dealers only. There are various other theories which could potentially be made against the finance company, which have been demonstrated by New Jersey case law. In Lotito v. Mercedes Benz, the court held that because of the close proximity and nature of identities between the finance company and the manufacturer, the plaintiff in essence has the same or substantially similar claims against the finance company as it would against the manufacturer due to the nature and extent of the relationship between these parties.
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Auto Dealership Pay Plan Litigation: Dealer Employees

May 20, 2009 | Jonathan Rudnick

It is not uncommon for the very employees upon whom the dealership relies to have complaints with upper management or ownership. My experience over the years has demonstrated that the dealership employees were subject to the same type of “trickery” to which the consumers are subject. In my experience, it is still common for the upper-level management and/or ownership to implement schemes or plans, intentionally or unintentionally, that reduce the commissionable gross proceeds for the salesman. The salesman and a large portion of the dealership employees rely upon the basic profit on the sale and financing of automobiles. I have seen cases where the dealerships have violated the pay plans by claiming various alleged “fictitious” costs. It is these costs, when added to the initial cost of the automobile, which reduces the gross commissionable proceeds for the dealership employees.

As an example, if a dealership acquired a vehicle at auction for $5,000 and it is placed on the books at $9,000, in my opinion the salesman has been denied the appropriate profit on the increased cost of the vehicle.

Further, hypothetically, if a dealership principal owned companies which supplied the gap or other after-market products, what would the appropriate costs be attributable to this product? The “captive” company could price a product wherein there is no profit for the dealership, thus funneling the profits into the subsidiary, which is owned and controlled by the dealership principals and/or management team. In my opinion, the sales staff or the employees have a claim against the ownership for this type of conduct.