Third Circuit Rules that Car Manufacturers’ Wholesale Price Increases Designed to Recover Warranty Costs to Dealers is Consistent with New Jersey Franchise Protection Act

The Third Circuit’s to-be-published opinion in Liberty Lincoln-Mercury, Inc. v. Ford Motor Company, confirms that the New Jersey Franchise Protection Act, N.J.S.A. § 56:10-1 to § 56:10-31, permits motor vehicle franchisors to use permissible cost-recovery systems to recoup the increased cost of reimbursing New Jersey motor vehicle dealers under the Act, but also clarifies that such a cost-recovery system must allow individual dealers to retain the ability to mitigate the increased costs imposed.