New Jersey Destination Charge Case Reaches Final Destination

On Wednesday, October 23, 2024, FCA US LLC, the manufacturer of Chrysler, Jeep, Dodge, Ram vehicles, among others, put the final nail in the coffin of claims by consumers that “destination charges” for the delivery of vehicles to dealers are somehow unlawful if those charges exceed the actual cost of delivery and generate profit. In BCR Carpentry LLC at al. v. FCA US LLC, a New Jersey federal district court granted a Rule 12(b)(6) motion to dismiss the Second Amended Complaint filed by the consumer plaintiffs asserting these claims in a putative consumer class action first filed in October 2021, this time granting the motion with prejudice.

The court in this case had previously dismissed in December 2023 a complaint by these consumer plaintiffs alleging that the manufacturer—required by federal law to place a “Monroney Sticker” on vehicles disclosing to consumers the “destination charge” for delivery of vehicles to dealers—violated the New Jersey Consumer Fraud Act (“NJCFA”) and state common law by charging more than the actual costs of delivery. In their Second Amended Complaint, the plaintiffs attempted to bolster their claim that “reasonable consumers do not view destination charges as a means of generating a profit by auto manufacturers” with citations to third-party articles, the Kelley Blue Book, and a 2013 statement from a Chrysler spokesperson, together with an allegation that the OEM’s markup was higher than the markup imposed by other manufacturers.

The court was unmoved by these additional allegations, finding that because the term “charge” did not imply an absence of profit, and because nothing the manufacturer allegedly said or did had thwarted the consumer plaintiffs from comparison shopping before deciding to pay the charge, the plaintiffs had not plausibly alleged any claim. Noting that a federal court in Delaware had recently denied a motion for leave by plaintiffs in a similar case to amend their complaint to add the same type of allegations because such a motion would be futile, the court found that any amendment by the New Jersey plaintiffs would likewise be futile and so dismissed the case with prejudice.

This is the latest in a string of defeats for plaintiffs asserting these kinds of statutory and common law consumer fraud claims, including a 2023 Ninth Circuit decision affirming the dismissal of such claims because “the destination fee is charged to the dealers and paid by them . . . regardless of Plaintiffs’ speculative reasoning concerning what is responsible for the makeup of such fees.” With plaintiffs having failed in every instance to establish these claims, perhaps efforts to challenge OEM destination charges have reached their final destination.