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False Advertising and selling cars in a deceptive manner


The plaintiff has pleaded a deceptive practice contrary to the Consumer Fraud Act consistent with New Jersey law. The defendant’s entire argument appears to be solely based on a lack of a reasonable belief by the plaintiff and the case upon which they rely directly contradicts their argument. The defendant relies upon Smajlaj v. Campbell Soup Co. 782 F.Supp.2d 84, 98 (DNJ 2011) in which the plaintiff challenged the labeling of certain soups as false and misleading. The case also obliterates their argument that a mistake can be a defense to a violation of the Consumer Fraud Act since the Smajlaj Court adopts the New Jersey Supreme Court’s mandate that good faith is not a defense to a violation of the Consumer Fraud Act. Cox v. Sears Roebuck & Co., 138 N.J. 2, 647 A.2d 454, 461 (1994).

The Consumer Fraud Act protects consumers from unfair practices “even when, a merchant acts in good faith.” Cox v. Sears Roebuck & Co., 138 N.J. 2, 647 A.2d 454, 461 (1994). Neither the face of the pleadings nor any of Defendants' legal arguments present a basis for the Court to doubt the plausibility of the claim that reasonable consumers would have understood “REGULAR CONDENSED SOUP” in the context in which it appears to refer to Campbell's regular tomato soup and would have understood “OUR REGULAR PRODUCT” to refer to the 480 mg sodium regular tomato soup. The claims of misleading representations are therefore sufficient to satisfy the first prong of the Consumer Fraud Act test for the purposes of this Rule 12(b)(6) motion. Smajlaj v. Campbell Soup Co., 782 F. Supp. 2d 84, 98-99 (D.N.J. 2011).

Thus, based on the case cited by the defendant, the plaintiff’s allegations satisfy the requirements as set forth by the New Jersey Supreme Court. The plaintiff alleged that the defendant affirmatively misrepresented the price of the subject vehicle for advertised promotional price, as part of a dealership promotion. The plaintiff viewed this advertisement and attempted to purchase this vehicle as part of the defendant’s ongoing promotion to sell vehicles at a special price. This attempted transaction was not an isolated, regular transaction based on a one time, isolated mistake on the dealer’s website. Certainly the defendant has failed to submit a certification to support this “factual theory”.

This attempted transaction and the advertisement was part of an ongoing promotion marketed by the defendants on the website, by email and on the radio. The defendant cannot even imply that this is an isolated incident. The plaintiff has submitted a certification explaining how this promotional price was not a limited promotional price, in any way, since there are multiple vehicles available for the advertised promotional price promotional price AND the pricing continued after the plaintiff tried to purchase the car and was unsuccessful.

The plaintiff also explained how the promotional pricing which was viewed on the website was consistent with the radio advertisements and Internet email communication received from the defendants. Any implication by the defendants that this was a one-time, isolated mistake and isolated occurrence must be ignored by the court. Certainly if it were such an aberration they would have submitted a certification supporting such a claim. The plaintiff’s assertion which is been supported by the complaint and the certification establishes for the purpose of this motion that the defendants engage in a deceptive practice, bait and switch advertising., luring consumer such as the plaintiff into the website with the promise of cheap cars.

The plaintiff has submitted sufficient evidence that the defendant intended to list bogus prices on the website to draw individuals to the website to get them to purchase other vehicles.

The conduct alleged by the plaintiff satisfied the various definitions under the Consumer Fraud Act for deception, deceptive conduct and fraud. See model jury instructions 4.43

The following are taken from the model jury instructions:

An “unconscionable commercial practice” is an activity in the public marketplace which is basically unfair or unjust and/or which materially departs from standards of good faith, honesty in fact and fair dealing. To find a commercial practice to be unconscionable, there should be factual dishonesty and a lack of fair dealing.

“Deception” is conduct misleading to an average consumer. It does not matter that at a later time it could have been explained to a more knowledgeable and inquisitive consumer, nor need the conduct or advertisement actually have misled the plaintiffs. The fact that the defendants may have acted in good faith is unimportant. It is the capacity to mislead that is important.

“Fraud” is a perversion of the truth, a misstatement or a falsehood communicated to another person creating the possibility that the other person will be cheated.

A “false pretense” is an untruth knowingly expressed by a wrongdoer.

A “false promise” is an untrue commitment or pledge, which creates the possibility that the other person will be misled.

A “misrepresentation” is an untrue statement, which is made about a fact, which is important or significant to the sale or transaction and is communicated to the consumer to create the possibility that the consumer will be misled.

A “misrepresentation” is a statement made to deceive or mislead.

In the present case the plaintiff has demonstrated that the defendants attempt to sell multiple vehicles at advertised promotional price was false and misleading. The plaintiff has set forth sufficient facts to demonstrate that this attempt was done to lure customers into their store with false advertisements on a wide scale basis over long period of time.

The advertised promotional price promotion was not a mistake as asserted by the defendants. It is clear that based on the certification by the plaintiff and the allegations made in the complaint that the defendants engaged in a wide scale deceptive advertising scheme. The plaintiff attempted to purchase the vehicle which was advertised at advertised promotional price and was rebuffed. It was not one single vehicle that was advertised promotional price vehicles but many vehicles, even after the incident with the plaintiff, wherein the dealership tried to sell numerous vehicles at the advertised promotional price promotional price.

The plaintiff even attempted to purchase another vehicle advertised promotional price promotional price was refused on a second occasion. There was no listed retraction of the website and the defendants continued on a wide scale basis to list vehicles for sale at advertised promotional price. It is clear that the defendants engaged in wide scale fraud/bait and switch. They even advertised cars that did not own.

An excellent of generalized deceptive conduct is addressed by the court in Herner v. HouseMaster of America 349 N.J.Super 89 (App.Div 2002). In Herner the court held that the relationship between the realtor and the inspection company was deceptive and satisfied the requirement of the New Jersey Consumer Fraud Act. In Herner the plaintiff’s realtor recommended an inspection company whose sole purpose was to make sure the inspection report would not kill the deal. The court set forth the following:

HouseMaster's marketing and training strategy emphasizes rendering a “balanced” report which stresses the positive aspects of a house, as well as the negative in such a way as to water down negative findings such that a consumer will have as little basis as possible to call the sale off or have solid evidence upon which to renegotiate the price. This marketing and business philosophy is undisclosed to the consumer. The informational brochure reviewed by the Herners deceptively highlights HouseMaster's independence, attention to detail and thoroughness. Herner v. HouseMaster of Am., Inc., 349 N.J. Super. 89, 107 (App. Div. 2002)

The record thus establishes an inherent conflict between the essential purposes of a home inspection to a consumer as described above and the duty of a realtor who is engaged to sell a home promptly at the highest price it will bring. It further establishes a pattern of non-disclosure on the part of HouseMaster such as to render its report worthless to consumers.

HouseMaster's reports strum the chord of high hopes on the part of those consumers who, having already committed themselves, yearn for confirmation that they have made a wise decision. But its carefully couched and deliberately softened language fails to raise troubling issues which might challenge that decision. Herner v. HouseMaster of Am., Inc., 349 N.J. Super. 89, 107 (App. Div. 2002)

The New Jersey Consumer Fraud Act should be liberally interpreted to root out all types of consumer fraud and fraud. In Herner the alleged improper conduct was based on the relationship between the realtor and the inspector that worked to the detriment of the consumer. This was a novel claim that was dismissed by the trial court and reinstated by the Appellate Division based on this relationship between the parties.

The court set forth the following:

An offense arises under the Act from an affirmative act, a [knowing] omission, or a violation of an administrative regulation.” Gennari v. Weichert Co. Realtors, 148 N.J. 582, 605, 691 A.2d 350 (1997). In order to recover there must be proof that a practice forbidden by the act has resulted in ascertainable loss. Id. at 608, 691 A.2d 350. Unlike common law fraud, “[a]n intent to deceive is not a prerequisite to the imposition of liability” under the Act. Ibid.The history of the act is one of constant expansion of consumer protection. Id. at 604, 691 A.2d 350. In 1975, the Legislature amended the act to include unlawful practices in the sale or advertisement of real estate. Ibid.; Strawn v. Canuso, 140 N.J. 43, 60, 657 A.2d 420 (1995). Throughout its history, the act has protected consumers from deception and fraud, even when committed in good faith. Gennari, supra, 148 N.J. at 604, 691 A.2d 350; Fenwick v. Kay American Jeep, Inc., 72 N.J. 372, 376–77, 371 A.2d 13 (1977). In this respect it has been held to establish a broad business ethic. In Cox v. Sears Roebuck & Co., 138 N.J. 2, 18, 647 A.2d 454 (1994), the Supreme Court stated:In respect of what constitutes an “unconscionable commercial practice,” this Court explained in Kugler v. Romain, 58 N.J. 522, 279 A.2d 640 (1971), that unconscionability is “an amorphous concept obviously designed to establish a broad business ethic.” Id. at 543, 279 A.2d 640. The standard of conduct that the term “unconscionable” implies is lack of “good faith, honesty in fact and observance of fair dealing.” Id. at 544, 279 A.2d 640. Herner v. HouseMaster of Am., Inc., 349 N.J. Super. 89, 105 (App. Div. 2002)(emphasis added)

In conclusion the plaintiff has properly pleaded a claim under the New Jersey Consumer Fraud Act