NJ Court Rules Trade Associations Cannot Sue Automakers Under Franchise Practices Act
In a landmark decision affecting the state’s business and automotive sectors, the New Jersey Supreme Court has clarified that only franchisees possess the legal standing to bring lawsuits under the Franchise Practices Act (FPA). The unanimous ruling in New Jersey Coalition of Automotive Retailers, Inc. v. Ford Motor Company (Decided July 29, 2025) underscores the importance of statutory language in determining who may pursue claims under New Jersey law. Justice Fabiana Louis-Perre, writing for the Court, emphasized that trade associations and other non-franchisee entities cannot independently file suit under the FPA.
The case arose when the New Jersey Coalition of Automotive Retailers (NJCAR), a trade association representing more than 500 franchised dealerships across the state, filed a lawsuit against Ford Motor Company. NJCAR alleged that Ford’s Lincoln Commitment Program violated provisions of the FPA prohibiting discriminatory pricing practices. While 18 Lincoln franchisees were members of NJCAR, the association itself is not a franchisee and does not operate dealerships, which became a central issue in the litigation.
At trial, the court determined that statutory language in N.J.S.A. 56:10-10 expressly limits FPA claims to franchisees, denying NJCAR standing to bring the case. The association appealed, arguing that it could exercise associational standing on behalf of its members. The Appellate Division sided with NJCAR, reasoning that the state’s traditionally broad standing doctrine allowed a representative entity to sue for its members’ interests.
The New Jersey Supreme Court reversed, clarifying that the FPA’s plain language and legislative intent sharply limit standing to individual franchisees. Justice Pierre-Louis wrote that the statute explicitly provides that “[a]ny franchisee may bring an action against its franchisor,” which unambiguously confines claims to the franchisee-franchisor relationship. The Court recognized that while nonprofit organizations can sometimes pursue claims on behalf of their members, the FPA constitutes a “specific and focused” statutory scheme that restricts remedies exclusively to franchisees.
By this ruling, NJCAR, as a trade association, lacks statutory standing to sue under the FPA, even though its members might individually have legitimate claims. The Court did not evaluate whether NJCAR could pursue alternative legal actions on behalf of its members, leaving the door open for other types of lawsuits unrelated to the FPA.
This decision carries significant implications for trade associations, business advocacy groups, and the automotive industry in New Jersey. Associations that previously assumed they could act as representatives in FPA disputes will now need to reconsider legal strategies and coordinate directly with franchisee members to pursue claims. Legal experts predict this clarification will streamline FPA litigation by ensuring that only directly affected franchisees can initiate actions, potentially reducing the volume of association-led lawsuits.
For businesses and industry stakeholders navigating New Jersey franchise law, understanding the limits of statutory standing under the FPA is now essential. For ongoing coverage of legal developments affecting New Jersey business, visit Explore New Jersey’s Business section.
