New Jersey Automobile Industry Trends and Topics: Case Law, Regulations and Legislation

September 1, 2013

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Eckert Seamans Cherin & Mellott, LLC is pleased to partner with the New Jersey Independent Auto Dealers Association to provide an update to you on a number of important and trending issues affecting New Jersey automobile retailers. Eckert Seamans is a national law firm with over 375 attorneys located in offices throughout the eastern United States. The firm’s clients represent nearly every facet of the economy, including multinational corporations, small businesses, nonprofit institutions, municipalities, government agencies and individuals. The needs of our clients involve us in virtually every area of the law and most industries.

Eckert Seamans Cherin & Mellott, LLC is pleased to partner with the New Jersey Independent



Dealers Must Disclose If Automobile Previously Used as a Loaner Car – Under a recent decision by a Superior Court Judge in Morris County, a dealer who failed to disclose that a vehicle previously operated as a loaner car was found to have violated the New Jersey Consumer Fraud Act. If successful, a claimant under the New Jersey Consumer Fraud Act may obtain treble damages (up to three times compensatory damages) and attorney’s fees, making such a violation potentially extremely costly. When in doubt dealers are best served by disclosing as much information as possible about a used car’s history to the extent known by them to avoid future litigation.


Electronic Liens and Titles Regulations Proposed by MVC – On August 5, 2013, the New Jersey Motor Vehicle Commission (MVC) proposed regulations concerning the issuance of electronic titles, as well as electronic recording, satisfaction, and assignment of security interests. The proposed rules are designed to implement electronic titles and liens independent of and in conjunction with traditional paper title certificates of ownership, which would continue to be employed. The proposed rules would apply to new and used vehicles and lay out procedures by which there would be private providers involved in electronic lien and titling services. The proposals also would require the designation on the title of any vehicle returned to a manufacturer for a violation of any state’s Lemon Law and if the vehicle was previously used as by law enforcement. If adopted, the regulations would allow the Chief Administrator of the MVC to establish an Electronic Lien and Titling Program for the issuance and use of electronic titles. Comments may be submitted to the Commission by October 4, 2013.

New Optional Fuel Economy Window Sticker Developed By Federal Government – The U.S. Department of Energy and the Environmental Protection Agency have developed optional window labels to show fuel economy and pollution levels of used cars and trucks similar to those found on new vehicles.


On November 5, 2013, New Jersey voters will head to the polls as Republican Governor Chris Christie and all 120 members of the New Jersey Legislature face reelection. Christie currently holds a 20 point lead over his Democratic challenger, State Senator Barbara Buono. The Democratically-controlled legislature is expected to retain control over both houses as a result of the redistricting that occurred in 2011. With the focus on the pending elections, we do not anticipate much legislative activity until mid-November, when the Lame Duck session begins and the Legislature returns in full force through the end of the Session in January.

Legislative Trends: A3610: Requires Disclosure of Storm or Flood Damage in Vehicle Sales –  A3610, sponsored by Assemblyman Joseph Cryan (D-20), requires that a person wishing to sell or transfer a vehicle that he knows has incurred damage caused by water or from a weather related event arising from a storm named by the National Weather Service must disclose that damage in writing prior to the vehicle’s sale or transfer. The disclosure must be made on the vehicle’s certificate of ownership, bill of sale, or, if these documents are not available, through a secure power of attorney or other documents, as required by the Chief Administrator of the New Jersey Motor Vehicle Commission. Importantly, the proposed disclosure requirement of damage linked to a storm with a name is not limited to water damage. The bill contains a $2,500 fine provision for violations of the Act. The bill is ready for a vote by the full Assembly and was released from the Assembly Consumer Affairs Committee on March 7, 2013. A Senate counterpart bill has not yet been introduced.

A4255: Permits Sunday Motor Vehicle Sales in Certain Counties – At the end of June, Assemblyman Wayne DeAngelo (D-14) introduced legislation that would permit the sale of motor vehicles on Sunday, except in any county that prohibits commercial and retail sales on Sunday. Sunday sales are currently prohibited by law in New Jersey. The bill has been referred to the Assembly Transportation and Public Works Committee and has not yet been considered. A Senate counterpart bill has not yet been introduced. been introduced.

For more information about the NJIADA, contact Paula Frendel at For more information about any of the issues above, or any other legal issues impacting your dealership, contact Tony Bush at (609) 989-5056 or

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