July 29, 2025|Publications
July 29, 2025 | Supreme Court of New Jersey | Published Opinion
Executive Summary
In a published opinion, Justice Pierre-Louis of the New Jersey Supreme Court reversed the Appellate Division and held that only franchisees—not trade associations—may sue franchisors under the New Jersey Franchise Practices Act (FPA). The New Jersey Coalition of Automotive Retailers (NJCAR), a nonprofit representing dealerships, challenged Ford Motor Company’s “Lincoln Commitment Program” as creating unlawful price differentials in violation of the statute. Ford countered that NJCAR lacked standing because it was not itself a franchisee. The Court agreed, reinstating summary judgment for Ford and emphasizing that the Legislature’s intent, reflected in the plain language of the Act, was to limit standing to franchisees alone.
Relevant Background
Ford Motor Company operates Lincoln dealerships nationwide, including in New Jersey. In 2011, Ford launched the Lincoln Commitment Program (LCP), which offered dealers payments of up to 5.75 percent of the MSRP of each Lincoln vehicle sold if they met various requirements, such as upgrading facilities, adopting digital storefront standards, and providing enhanced customer services.
In 2020, NJCAR filed suit claiming the LCP violated N.J.S.A. 56:10-7.4(h), which prohibits franchisors from failing to sell motor vehicles to franchisees “at the same price for a comparably equipped motor vehicle, on the same terms, with no differential in discount, allowance, credit or bonus.” The trial court granted summary judgment to Ford, reasoning that only franchisees can sue under the FPA. On appeal, the Appellate Division reversed, holding that NJCAR had associational standing under New Jersey’s liberal standing doctrine. Ford petitioned for certification, and the Supreme Court agreed to hear the case.
Decision
The Supreme Court reversed the Appellate Division and reinstated judgment for Ford. Justice Pierre-Louis wrote that “the Legislature’s intent is paramount to a court’s analysis, and we look to the plain language of the statutory text to determine that intent.” Turning to Section 10 of the FPA, the Court noted that it provides: “Any franchisee may bring an action against its franchisor for violation of this act … [and] shall also be entitled to the costs of the action including but not limited to reasonable attorney’s fees.” By choosing the words “any franchisee” and “its franchisor,” the Legislature “made it evident that a cause of action arising from the FPA must be specific to the individual franchisee–franchisor relationship.”
The Court underscored that this drafting choice was deliberate. Although the FPA broadly defines “person” to include individuals, corporations, partnerships, and other entities, the Legislature did not use that broader term when identifying who may sue. Instead, it selected the narrower term “franchisee,” making clear that franchisees are the only parties authorized to bring claims under the statute.
The Court also clarified that its holding was limited. While NJCAR cannot bring claims under the FPA, the organization is not foreclosed from pursuing associational standing under other statutes or theories. The decision is confined to suits “for injuries made cognizable and actionable under the FPA.” Importantly, the Court acknowledged that New Jersey generally applies a “liberal standing doctrine,” but stressed that where the Legislature uses specific language, courts must respect the boundaries set by the statutory text.
Looking Forward
For franchisors, this ruling provides important clarity and protection. By holding that only franchisees can sue under the FPA, the Court eliminates the threat of association-led lawsuits seeking sweeping relief across an entire franchise system.
The case also highlights a broader principle: even in a jurisdiction known for liberal standing rules, the courts will enforce limits when the Legislature speaks clearly. Here, the Legislature’s choice of the word “franchisee” over broader terms like “person” proved decisive.
For franchisors, the lesson is straightforward: statutory text matters. Where a statute ties remedies to the franchisee–franchisor relationship, franchisors should be able to rely on those limits to defend against attempts by outside organizations to expand liability.
Thomas O’Connell is a Shareholder at Buchalter APC and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
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