Leading Auto Dealer Law Firm Announces Suit against TrueCar

Tuesday, March 10, 2015

Over 100 Dealerships Join Suit against Online Car Buying Site for Deceptive Business Practices

MINEOLA, NEW YORK — Bellavia Blatt & Crossett, PC, a leading automobile dealer law firm, announced today that it has filed a mass action lawsuit in Federal Court for the Southern District of New York against TrueCar. The suit charges that the online car buying site engaged in deceptive business practices. The firm is urging additional non-TrueCar-affiliated dealerships who have been injured financially by TrueCar’s actions to join in the suit. So far, 117 dealerships are part of the mass action filed today. A second lawsuit, on behalf of TrueCar-affiliated dealers, will be filed in the coming weeks.

The suit alleges that the dealers have been injured as the result of TrueCar’s misleading claims and have lost approximately 35 to 85 sales per year, meaning $432,000 to over $1,000,000 in lost revenue, depending upon dealer sales volume. In addition, TrueCar’s actions have led to the reputations of TrueCar-affiliated dealerships being damaged by the public’s perception of the TrueCar business model and its alleged deceptive business practices.

The firm is charging the online car buying site for false advertising in violation of the Lanham Act and unfair competition and deceptive trade practices under state statutes. “TrueCar advertises that their service provides a ‘no haggle experience’ with statements like ‘no negotiation’ and ‘no surprises,’” said Leonard Bellavia, Senior Partner, Bellavia Blatt & Crossett. “Yet the buying experience is anything but that as it sets consumers up for disappointment. Our clients have invested hundreds of millions of dollars to enhance the customer experience, which TrueCar has managed to undermine.”

The firm is also representing 1,048 clients in a separate $350 million mass action lawsuit against CARFAX, seeking recovery of alleged substantial overcharges over six years — multiplied by three — in accordance with antitrust laws. The suit claims that CARFAX has illegally aligned itself with major players in the auto industry and abused its monopoly power, resulting in inferior vehicle history reports, exorbitant pricing and a marketing campaign designed to damage the reputation of auto dealers.

Mr. Bellavia has represented numerous automobile franchise dealers nationwide against the major players in the U.S. automotive industry, including auto manufacturers — such as Chrysler, GM and Saab — as well as the U.S. government, arising out of the Chrysler bankruptcy wherein dealers were unjustly terminated without compensation.

In response to TrueCar’s alleged violations of federal and state advertising laws, Bellavia Blatt is seeking $250,000,000 in damages, as well as injunctive relief compelling TrueCar to change its business model. “We urge other dealers who have been injured by TrueCar’s actions to join in this lawsuit,” Mr. Bellavia said. “We will prove that TrueCar’s business model is a bad one — not just for the consumers and dealers, but for the industry in general.”

To participate or for more information, call (516) 873-3000 or visit www.TrueJustice.DealerLaw.com.


About Bellavia Blatt & Crossett, PC

For almost 30 years, Bellavia Blatt & Crossett, PC has represented thousands of automobile and marine dealerships against manufacturers and distributors of automobiles and boats throughout the country. The firm handles a variety of legal matters on behalf of automobile and marine dealerships, ranging from franchise disputes and lease negotiations to the purchase or sale of dealership businesses, real estate matters and complex federal and state court litigation. Leonard A. Bellavia is a regularly quoted source of comment for Automotive News and a regular speaker for national automotive- and marine-related trade organizations. He serves as Chair of the Automotive Franchise Law Section of the Franchise Law Committee of the New York State Bar Association and has served as Chairperson of the Litigation Section of the National Association of Dealer Counsel and a member of its Board of Directors.