Third Circuit Upholds New Jersey Warranty Surcharge

On April 9, 2012 the U.S. Court of Appeals for the Third Circuit upheld the right of a franchisor to impose a flat, per-vehicle surcharge on all vehicles wholesaled to New Jersey dealers in order to recoup the additional costs the franchisor incurs under the state law requiring it to pay each dealer the dealer’s "prevailing retail rate" for parts used in warranty repairs rather than a lower standard handling allowance.

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