Third Circuit Panel Opines On New Jersey Consumer Fraud Act

Key Takeaways

The Third Circuit held that, without more, a statutorily required surcharge disclosure was not an affirmative misrepresentation under the NJCFA even where the surcharge included undisclosed profit.

On October 3, 2025, a divided Third Circuit panel affirmed the district court's dismissal of a putative class action lawsuit brought by BCR Carpentry LLC ("BCR") against Fiat Chrysler ("FCA") for violations of the New Jersey Consumer Fraud Act ("NJCFA") and unjust enrichment. The Automobile Information Disclosure Act requires vehicle manufacturers such as FCA to attach a label on its vehicles' windows including the "destination charge," i.e., the amount charged to the dealer for transporting cars to the dealer. 15 U.S.C. § 1232(f)(3). Plaintiffs alleged that FCA's "destination charge" was inflated by including undisclosed profit to FCA, and that consumers would reasonably understand the fee to reimburse FCA only for actual delivery costs, not undisclosed markups.

In a 2-1 decision, the panel held that plaintiffs failed to plausibly allege an unlawful affirmative act or omission under the NJCFA, as the NJCFA is only violated "by an affirmative misrepresentation so misleading as to a fact material to the consumer's decision that the consumer is effectively deprived of the ability to make an intelligent decision." See BCR Carpentry LLC et al. v. FCA US LLC, No. 24-3202, ECF No. 37, at 4 (3d Cir. Oct. 3, 2025) (citing Suarez v. E. Int'l Coll., 50 A.3d 75, 88 (N.J. Super. Ct. App. Div. 2012) (emphasis added)). According to the panel, "no reasonable consumer would be surprised to learn that a 'charge' includes profit.'" Id. For this same reason, no disclosure was necessary to make a previous statement true, because "a reasonable consumer would not assume that a charge omitted profit." Id. at 5-6. The panel also rejected reliance theories predicated on statements that destination charges do not include profit, noting that none of the statements were attributable to FCA. For example, despite plaintiffs' assertions that consumers were told specifically that destination charges did not include profit, plaintiffs failed to show that FCA made any of these statements. Id. Similarly, omission-based claims failed because plaintiffs did not allege a fiduciary or other special relationship creating a duty of FCA to disclose to plaintiffs the profit components of the fee. Indeed, no special relationship arose between FCA and plaintiffs because FCA charges its dealerships for vehicle delivery and the destination charge is therefore paid to the dealership, not FCA. Id. at 5.

The dissent criticized the majority for departing from prior NJCFA decisions, which emphasized that the "prime ingredient" in the court's analysis should be whether a practice has merely the "capacity to mislead." Id. at 8. In the dissent's view, the "capacity to mislead" standard sets a uniquely low threshold relative to other states, capturing a broader range of potentially misleading conduct. Nonetheless, the majority underscores that, absent a special duty to disclose or a false statement, the NJCFA reaches only misrepresentations so materially misleading that they deprive consumers of the ability to make an intelligent decision—an exacting standard under which no reasonable consumer would be surprised that a "charge" includes profit.

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