“Franchisee-Only Standing” – The New Jersey Supreme Court Conclusively Limits FPA Causes of Action to Franchisees

Introduction

New Jersey Coalition of Automotive Retailers, Inc. v. Ford Motor Company, No. A-7-24 (decided 29 July 2025), presented the Supreme Court of New Jersey with a seemingly narrow but practically significant question: Who may sue under the New Jersey Franchise Practices Act (FPA), N.J.S.A. 56:10-1 to ‑15? The plaintiff, New Jersey Coalition of Automotive Retailers (“NJCAR”), is a trade association representing over 500 franchised new-car dealerships, including 18 Lincoln franchises. It challenged Ford’s “Lincoln Commitment Program” (LCP) as an impermissible differential pricing scheme under N.J.S.A. 56:10-7.4(h). Ford responded that NJCAR lacked statutory standing because it is not itself a “franchisee.” After the trial court agreed with Ford and the Appellate Division reversed on associational-standing grounds, the Supreme Court granted certification to resolve the conflict.

Summary of the Judgment

Justice Pierre-Louis, writing for a unanimous Court, held:

• The FPA vests a private right of action only in “any franchisee … against its franchisor.” N.J.S.A. 56:10-10.
• Because NJCAR is not itself a motor-vehicle franchisee, it lacks statutory standing, notwithstanding New Jersey’s traditionally liberal doctrine of associational standing.
• The decision is expressly limited to FPA claims; the Court did not reach whether NJCAR could sue under other causes of action on an associational basis.
• The Appellate Division’s judgment was reversed and the trial court’s order granting summary judgment to Ford was reinstated.

Analysis

1. Precedents Cited and Their Influence

The Court’s reasoning wove together two lines of authority: (a) New Jersey’s liberal jurisprudence on standing and (b) cases recognizing legislative power to confine standing by express statutory language.

• Crescent Park Tenants Ass’n v. Realty Equities Corp., 58 N.J. 98 (1971) — Emphasized the State’s more expansive approach to standing compared with federal Article III. The Court cited Crescent Park to acknowledge, yet ultimately distinguish, New Jersey’s “representational-standing” tradition.
• In re Camden County, 170 N.J. 439 (2002) — Reiterated the basic test for standing (stake in outcome, adverseness, likelihood of harm). Used to frame the doctrinal backdrop.
• Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333 (1977) — Provided the familiar three-prong associational standing test adopted by the Appellate Division. The Supreme Court cited it only to note that it did not control where the Legislature has limited standing.
• Cherokee LCP Land, LLC v. City of Linden Planning Board, 234 N.J. 403 (2018) — Demonstrated that when a statute defines “interested party,” courts must respect that limitation.
• In re N.J. Firemen’s Ass’n Obligation, 230 N.J. 258 (2017) — Confirmed the Legislature’s authority to restrict the class of plaintiffs even in transparency-oriented laws.

Collectively, these precedents foreshadowed the outcome: generous standing rules yield when the Legislature explicitly confines the right of action.

2. The Court’s Legal Reasoning

1. Plain-Language Statutory Construction
   The Court embarked on a traditional textual analysis:
   • N.J.S.A. 56:10-10 authorizes claims by “any franchisee … against its franchisor.”
   • The FPA separately defines “franchisee,” “franchisor,” and “person.” The Legislature deliberately chose the narrower “franchisee,” not the broader “person.”
   • The possessive “its” underscores the bilateral nature of the statutory relationship.
   
   Therefore, only a party to the franchise agreement may sue.
2. Legislative Purpose
   The statute’s purpose clause (N.J.S.A. 56:10-2) seeks to counteract franchisor bargaining power and protect franchisees from unreasonable termination or discrimination. Conferring the right to sue solely on franchisees aligns perfectly with that purpose.
3. Distinguishing Liberal Standing Doctrine
   While New Jersey lacks an Article III “case-or-controversy” requirement, the Court emphasized that “liberal is not limitless.” Where the Legislature “speaks with a clear voice,” courts must respect the boundary notwithstanding policy arguments for broader access.
4. Statutory-Scheme Coherence
   Section 9 provides an affirmative defense allowing the franchisor to show the franchisee’s own breach. This defense only makes sense if the plaintiff is the contracting franchisee. Allowing third-party associations would render the defense incoherent.

3. Impact of the Judgment

The decision reshapes litigation strategy in several respects:

• Trade Associations. Automotive or other franchisee trade groups can no longer sue under the FPA unless they themselves hold a franchise.
• Franchise Litigation Pipeline. Individual dealerships must now shoulder the costs and potential retaliation risks of litigating discriminatory practices, potentially reducing the volume of FPA litigation.
• Legislative Signal. If the Legislature disagrees, it must amend the statute to expand standing. Until then, courts are bound by the “franchisee-only” rule.
• Spill-Over to Other Statutes. The opinion will be cited whenever litigants invoke broad associational standing under a statute with similarly specific plaintiff classes (e.g., Consumer Fraud Act, Conscientious Employee Protection Act, etc.).
• Corporate Compliance. Franchisors may perceive a litigation reprieve, but they remain vulnerable to suits by individual franchisees, class actions, and enforcement by the Attorney General.

Complex Concepts Simplified

• Standing – A prerequisite to sue. Think of it as the legal right to walk through the courthouse doors with a particular complaint.
• Associational (or Representational) Standing – Allows an organization to sue on behalf of its members when: (1) those members could sue themselves, (2) the lawsuit relates to the organization’s purpose, and (3) individual participation is unnecessary (typically when only injunctive or declaratory relief is sought).
• Statutory Standing – Even if constitutional or common-law standing exists, a plaintiff must still satisfy any plaintiff-class restrictions that the statute itself imposes.
• Franchise Practices Act (FPA) – A New Jersey statute protecting franchisees (particularly auto dealers) from abusive practices such as discriminatory pricing, sudden termination, and coerced facility investments.

Conclusion

New Jersey Coalition of Automotive Retailers, Inc. v. Ford Motor Company establishes a bright-line rule: the right of action under the FPA belongs exclusively to franchisees, not to trade associations or other third parties. The ruling underscores the supreme importance of statutory language in determining who may access the courts under a legislatively created cause of action, and it tempers New Jersey’s famously liberal standing doctrine by reaffirming that courts must not enlarge a statute beyond the class of plaintiffs the Legislature explicitly named. Future litigants — whether franchisors, franchisees, or their associations — must recalibrate both litigation and compliance strategies to this clarified boundary, and legislative advocates who seek broader enforcement mechanisms must now direct their arguments across the street to the State House rather than the courthouse.