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. e du/thir dc ir c uit_1998/20Filed January 22, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 96-5762, 97-5189 and 97-5190

LIBERTY LINCOLN-MERCURY

v.

FORD MOTOR COMPANY, Appellant in No. 96-5762

LIBERTY LINCOLN-MERCURY, INC.

v.

FORD MOTOR COMPANY, Appellant in No. 97-5189

LIBERTY LINCOLN-MERCURY, INC., Appellant in No. 97-5190

v.

FORD MOTOR COMPANY

On Appeal from the United States District Court for the District of New Jersey (D.C. Civ. No. 95-3121)

Argued December 11, 1997

BEFORE: GREENBERG, ROTH, and SEITZ, Circuit Judges.

(Filed: January 22, 1998)Dennis R. LaFiura (argued)

Pitney, Hardin, Kipp & Szuch

P.O. Box 1945 Morristown, NJ 07932-0950

Michael R. Feagley Mayer, Brown & Platt

190 S. LaSalle Street Chicago, IL 60603-3441

John J. Sullivan

Robert L. Bronston Mayer, Brown & Platt 2000 Pennsylvania Avenue, N.W. Washington, D.C. 20006-1882

Attorneys for Appellant and Cross Appellee Ford Motor Company

Norman I. Klein Goldman, Carlett

Garrison & Klein 1135 Clifton Ave., Clifton, NJ 07013

Eric L. Chase (argued)

Genevieve K. LaRobardier Bressler, Amery & Ross, P.C.

P.O. Box 1980 Morristown, NJ 07962

Attorneys for Appellee and Cross Appellant Liberty Lincoln-Mercury,

Inc.

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

Defendant Ford Motor Company ("Ford") appeals from an order of the district court dated March 13, 1996, e ntered March 15, 1996, granting partial summary judgment i n

2favor of plaintiff Liberty Lincoln-Mercury, Inc. (" Liberty") on

the grounds that Ford's assessment of a dealer-pari ty surcharge ("DPS") violated the New Jersey Franchise Practices Act, N.J. Stat. Ann. S 56:10-15(a) (West Supp. 1997). Ford also appeals from the district court's order of September 19, 1996, entered September 23, 1996, amending the March 13 order nunc pro tunc to preclu de Ford from altering certain practices that were in e ffect as of the date of the March order. Liberty cross appeals from the district court's March 13, 1996 dismissal of its cl aim alleging illegal price discrimination under the Rob insonPatman Act, 15 U.S.C. S 13(a), and from the portion s of the district court's February 26, 1997 final order ente red February 27, 1997, rejecting Liberty's claim for da mages incurred before December 1991, denying recovery of certain fees, and awarding prejudgment interest at the rate s set forth in New Jersey Court Rule 4:42-11.

The district court had jurisdiction over Liberty's state law claim pursuant to 28 U.S.C. S 1332 based on diversi ty of citizenship and the requisite amount in controversy , and over Liberty's federal law claim under 28 U.S.C. S 1331. This court's jurisdiction rests on 28 U.S.C. S 1291 based on the district court's entry of the final order dated February 26, 1997, and entered February 27, 1997.1 For the reasons that follow, we will reverse the district court's S eptember 19, 1996 order, and will vacate the district court' s order awarding attorneys' fees and remand that issue for

reconsideration. We otherwise will affirm.

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1. Ford initially filed an interlocutory appeal fro m the district court's September 19, 1996 order pursuant to 28 U.S.C. S 12 92(a)(1), which provides that "the courts of appeals shall have jur isdiction of appeals from . . . [i]nterlocutory orders of the district c ourts . . . granting .

. . injunctions . . . ." By order of this court the int erlocutory appeal,

which was docketed as number 96-5762, was consolidated wi th Ford's appeal in number 97-5189 and Liberty's cross appeal in num ber 97-5190 from

the district court's final order. The district cour t on April 25, 1997, entered a supplemental final order dated April 22, 1997, which is not at issue in this appeal.

3II. FACTUAL AND PROCEDURAL HISTORY

On March 11, 1976, Ford and Liberty entered into a franchise agreement by executing Ford's standard "L incoln and Mercury Sales and Service Agreements." Pursuant to the agreement, Ford, a motor vehicle manufacturer a nd franchisor, sells vehicles at wholesale prices to L iberty, which in turn sells them to consumers at retail pri ces. The retail vehicle sales are accompanied by a warranty issued by Ford to the consumer, guaranteeing that Ford wil l replace certain systems or parts in the vehicle fre e of charge. See app. at 38; 173.

Under the standard franchise agreement, a franchise edealer such as Liberty must perform warranty repair s on any vehicle brought to its dealership regardless of where the owner purchased the vehicle. Ford then must reimburse the dealer for the parts and labor associ ated with the warranty repairs. From 1976 until 1991, Fo rd reimbursed Liberty for parts used in warranty repai rs pursuant to a standard nationwide reimbursement for mula. Under the relevant version of that formula, Ford reimbursed dealers at 30-40% above their cost for p arts depending on the model of the vehicle repaired. See id. at

115.

On December 12, 1991, Liberty wrote to Ford, asking to be reimbursed for warranty parts at its retail rate of 77% above its cost pursuant to the New Jersey Franchise Practices Act ("NJFPA"), which provides that a moto r vehicle franchisor "shall reimburse" its franchisee for par ts used in warranty repairs at the franchisee's "prevailing re tail price," provided that the retail price is "not unreasonable ." N.J. Stat. Ann. S 56:10-15(a). See app. at 286. Ford res ponded on January 17, 1992, that it intended "to offset[an y] parts mark-up above 30%." Ford explained that it would "estimate the incremental cost to [Ford] of the hig her markup" Liberty had demanded and would provide Liberty "a menu of items" on Liberty's account from which the costs could be recovered. Ford informed Liberty that it w ould adjust the amount of its recovery charges "periodic ally . . . to ensure that only incremental costs are recovered ." Id. at

295.

4On July 7, 1992, after several months of correspond ence,

Ford agreed to reimburse Liberty at Liberty's claim ed rate of 77% above cost although Ford "continue[d] to believ e that a retail markup of 77% is unreasonably high." App. at 308. On October 1, 1992, Ford reminded Liberty "that the re would be cost recovery," and informed Liberty that it was "reviewing the nature of the recoveries that will b e implemented." Id. at 319. Ford then wrote to Libert y on November 5, 1992, confirming its agreement to reimb urse Liberty at a 77% markup retroactive to December 12, 1991, the date Liberty first demanded retail-rate reimbur sement, and announcing that Ford would recover the cost of paying the incremental reimbursement through a "dealer par ity surcharge." Id. at 321.

Ford explained,

[a]s you know, parity between dealers, and p arity in the overall economic relationship between Fo rd and its dealers, is essential. It is necessary for F ord to maintain dealer parity, notwithstanding Ford 's acceptance of your request to be reimbursed for warranty parts at a markup exceeding the mar k-up which Ford extends uniformly to all dealers nationally.

To maintain that parity, and to ensure fairn ess to the overwhelming majority of dealers who are sat isfied with . . . a uniform warranty parts reimbursement mark-up, and to recover our increased costs . . . . [ c]osts incurred through today will be divided by th e total number of vehicles in your dealership's inve ntory and . . . `in-transit' to your dealership . . . . The quotient will constitute a dealer parity surcharge to your wholesale price for each such vehicle.

Id. Ford informed Liberty that after this initial c ost recovery, "[i]ncremental costs incurred during each period . . . will be divided by the total number of vehicl es invoiced . . . . The quotient will constitute the surcharge to your wholesale vehicle price for each such vehicle." Id. Ford assured Liberty that, [i]n the event the total mont hly surcharge differs from the incremental [reimburseme nt] costs incurred by Ford, the aggregate amount of any excess or shortfall to the surcharge . . . will be netted against the

5Costs used to determine the surcharge for the immed iately

subsequent Billing Period." Id. at 322.

In correspondence dated December 21, 1992, Liberty requested additional reimbursements to supplement t he

below-retail reimbursements it had received for war ranty parts it installed between 1986 and December 12, 19 91. See id. at 326. Ford rejected that claim. See id. a t 346.

On October 5, 1992, Liberty filed a class action in federal district court for the District of New Jersey on be half of 38 New Jersey Lincoln-Mercury dealers, alleging that F ord's warranty reimbursement practices violated the NJFPA . On May 14, 1993, the district court, finding that the dealers' claims required a "part-by-part, sale-by-sale" anal ysis of each dealer's retail rate, denied the motion for cl ass certification for lack of the requisite commonality among the dealers' claims. Liberty Lincoln Mercury, Inc. v. Ford Mktg. Corp., 149 F.R.D. 65, 76 (D.N.J. 1993) ("Libe rty I"). The court later dismissed Liberty I without prejudi ce by consent of the parties.

Liberty then filed this action on June 30, 1995. In its complaint and amended complaint Liberty alleged tha t Ford's imposition of the DPS violated the NJFPA's m andate that Ford reimburse Liberty for warranty parts at L iberty's prevailing retail price. Liberty also alleged that by imposing the DPS on Liberty but not on its competitors, Ford had engaged in unlawful price discrimination in violati on of the Robinson-Patman Act, 15 U.S.C. S 13(a).2

Liberty moved for summary judgment as to liability on both claims and Ford moved to dismiss Liberty's pri ce discrimination claim. By order dated March 13, 1996 , the district court granted Liberty's motion for summary judgment as to its NJFPA claim and granted Ford's m otion to dismiss Liberty's price discrimination claim. Th e district court found that Ford was "engaged in a shell game, the purpose of which is to avoid, altogether, the costs of complying with the NJFPA." Slip op. at 9. Finding t hat the DPS, by effectively reducing Liberty's reimbursemen ts from

___________________________________________________ ______________

2. Liberty consented to the dismissal of several ot her claims which are not at issue in this appeal.

6Liberty's retail rate to Ford's standard rate, "ess entially

nullified [Ford's] compliance and created an end-ru n around the Act," the district court concluded that it "would be formalistic, in the extreme," to find that Ford had paid Liberty the requisite reimbursement "when [Ford] ch arges back the very benefits which the Act intends to con fer." Id.

at 8-9. The court thus held that the DPS violated t he "clear language of the NJFPA" by denying Liberty reimburse ment at its retail rate. Id. at 11. The court concluded, however, that because the DPS placed Liberty in the same eco nomic position as competitors who received only standard reimbursements at 30-40% above cost, it did not giv e rise to a price discrimination claim under the Robinson- Patman

Act. See id. at 12-13.

Thereafter Ford discontinued the DPS, and on April 29, 1996, wrote to all New Jersey dealers announcing ne w policies for processing retail-rate reimbursement c laims. The policies required dealers to document their cla imed retail prices as to each warranty part by attaching retail customer repair orders for the same part installed in similar vehicles within the preceding six months. S ee app. at 513, 516. Ford also informed the dealers that "p ayment of warranty parts reimbursement at levels higher th an [standard] reimbursement levels will be recovered . . . as with other regulatory compliance costs." Id. at 514

.

On May 15, 1996, Liberty submitted a request for re tailrate reimbursement for warranty parts installed dur ing April and May 1996. Ford rejected the request for f ailure to satisfy Ford's new documentation requirements. See app. at 736-42. On June 20, 1996, Liberty filed a "Motion t o Enforce the Order of March 13, 1996" challenging Fo rd's new policies as imposing insurmountable burdens des igned to prevent Liberty from receiving retail-rate reimb ursement,

in violation of the NJFPA and the district court's March order. Liberty sought sanctions and an order enjoin ing Ford from implementing the new requirements.

Ford responded that the issues raised in Liberty's Motion to Enforce were beyond the scope of the complaint a nd the March order, which had addressed only the legality of the DPS and were silent as to the proper methods for establishing a dealer's retail rate. Ford contended that its

7new policies were appropriate in light of Liberty I 's

pronouncement favoring a "part-by-part, sale-by-sal e" analysis of each dealer's retail rate, 149 F.R.D. a t 76, and sought discovery and the opportunity to develop a f actual record regarding the nature of the new policies and the burdens they entailed. See app. at 729-30.

The district court, without allowing discovery or h olding an evidentiary hearing, held on September 19, 1996, that in adopting its new reimbursement policies Ford had "i gnored or evaded" the "clear thrust" of the March opinion. Slip op. at 1. The court found that the new procedure "appea rs to be onerous in the extreme and designed to frustrate any attempt to obtain statutory reimbursement . . . at the dealer's prevailing retail rate." Finding, however, that the terms of the March order were not "explicit," the c ourt denied Liberty's Motion to Enforce, but amended the March order nunc pro tunc to forbid Ford from altering it s prior reimbursement procedure absent Liberty's consent or leave of the court. The court also enjoined Ford from"any further or other financial imposition on . . . Liberty . .. as a recoupment" of Ford's NJFPA compliance costs. Slip op. at

2-3.

Liberty also moved for summary judgment as to the issues of damages, interest, costs and fees. In afi nal order dated February 26, 1997, and supplemental final ord er dated April 22, 1997, the district court granted Li berty's motion in part, awarding Liberty a total of approxi mately $800,000 in damages, attorneys' fees, costs and prejudgment interest. This appeal and cross appeal

followed.

III. DISCUSSION

A. The New Jersey Franchise Practices Act

1. Statutory Language

The New Jersey Franchise Practices Act provides tha t:

[i]f any motor vehicle franchise shall requi re or permit motor vehicle franchisees to . . . provide p arts in

8satisfaction of a warranty issued by the mot or vehicle

franchisor . . . [t]he motor vehicle franchi sor shall

reimburse each motor vehicle franchisee . . . for such parts as are supplied, in an amount equal to the prevailing retail price charged by such moto r vehicle franchisee for such . . . parts in circumsta nces where . . . such parts [are] supplied other than p ursuant to the warranty; provided that such motor vehic le franchisee's prevailing retail price is not unreasonable when compared with that of [other franchisee s] from

the same motor vehicle franchisor for identi cal merchandise . . . in the geographic area in which the motor vehicle franchisee is engaged in busin ess . . . .

N.J. Stat. Ann. S 56:10-15(a). We must decide wheth er the district court erred in entering summary judgment i n favor of Liberty on the grounds that Ford's "surcharge re gime violates the clear language of the NJFPA." Slip op. at 11. We review both the district court's interpretation of the NJFPA and its entry of summary judgment de novo, construing the NJFPA as we believe that the New Jer sey Supreme Court would construe it and viewing the rec ord in the light most favorable to Ford. See Pittston Co. Ultramar Am. Ltd. v. Allianz Ins. Co., 124 F.3d 508, 516 (3d Cir. 1997).

While the New Jersey courts have not interpreted th e relevant statutory language dictating that a "franc hisor shall reimburse" its franchisee for warranty parts at "the prevailing retail price," under New Jersey law"[i]t is a cardinal rule of statutory construction that the la nguage of the statute should be given its ordinary meaning an d construed in a common sense manner to accomplish th e legislative purpose." N.E.R.I. Corp. v. New Jersey Highway Auth., 686 A.2d 328, 335 (N.J. 1996) (citations and internal quotations omitted). Applying an ordinary and commo n sense definition of the relevant statutory language requiring Ford to reimburse Liberty at retail rates, we concl ude that Ford's assessment of the DPS, which automatically r educed the reimbursements Liberty received to below retail levels, violated the plain language of the NJFPA.

According to Ford, because the NJFPA regulates "a narrow aspect of the franchisor-franchisee relation ship,"

9dictating only the rate of reimbursement for warran ty parts,

and "is silent regarding wholesale prices," the DPS which Ford added to Liberty's wholesale vehicle prices fa lls outside the purview of the NJFPA. Br. at 14-15. For d contends that the district court, in finding that t he DPS violated the NJFPA, "read into the statutory scheme a remarkably intrusive and completely unstated requir ement that Ford silently bear the full cost of compliance ," depriving Ford of "the freedom to control its whole sale pricing structure without . . . support in the lang uage of

the statute." Id. at 20.

We disagree. The district court did not forbid Ford from adopting policies to recover the costs of complying with the NJFPA; nor did it forbid methods of cost recovery i nvolving wholesale prices. The court simply held that while some "methods of cost-recovery are permissible . . . .[F ord's] method certainly is not." Slip op. at 9. Even thoug h the court, in reaching this conclusion, did not delinea te the distinctions between the DPS and permissible cost-r ecovery systems, those distinctions are apparent from the r ecord

before us.

As Ford explained to Liberty in setting forth its m ethod for calculating the DPS, "incremental [warranty reimbursement] costs incurred [by Ford] during each period . . . will be divided by the total number of vehicl es invoiced . . . that month." App. at 321. Accordingly, the DP S bore no economic relationship to Liberty's wholesale vehicl e purchases, but rather was exacted as an automatic r esult of, and in direct proportion to, Liberty's incremen tal warranty reimbursement claims. Although Ford descri bed the DPS as a vehicle price surcharge and attributed a portion of it to each vehicle on Liberty's invoice, the total amount of the surcharge neither would increase if L iberty purchased more vehicles nor would decrease if Liber ty purchased fewer. See id. at 308, 321. Thus, looking to the practical operation of the DPS rather than to the nomenclature Ford used to describe it, we conclude that the DPS, the amount of which depended solely and di rectly on Liberty's warranty reimbursement claims, functio ned not as a wholesale vehicle price term carried out throu gh unregulated vehicle sales transactions, but rather as a

10warranty reimbursement policy that automatically

eliminated any reimbursement beyond Ford's standard rate resulting, as Liberty argues, in "no payment at ret ail." Br.

at 23.

Because the DPS was assessed as an inevitable consequence of incremental reimbursement claims and not through separate, unregulated transactions, Ford's reliance on Acadia Motors, Inc. v. Ford Motor Co., 44 F.3d 1 050 (1st Cir. 1995), is misplaced. Acadia held that a Maine retail

reimbursement statute similar to the NJFPA did not preclude Ford from imposing a wholesale vehicle pri ce surcharge to recover the costs of reimbursing Maine dealers

at retail rates rather than at Ford's standard rate . 3 The Acadia court found that "[n]othing in the[statutory ] language . . . prohibits a manufacturer from increa sing vehicle prices in order to recover its increased co mpliance costs. The statute says nothing about wholesale or retail prices, and apparently leaves the manufacturer free to increase wholesale prices." Id. at 1056. Thus, the Acadia court concluded, a restriction against wholesale pr ice increases would improperly establish "a rule unsupp orted by state statute." Id. at 1057.4

We agree with Acadia's holding that the statutes at issue do not preclude cost-recovery systems effected thro ugh wholesale vehicle price increases, but reject Ford' s

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3. The Maine statute at issue in Acadia provides th at:

[i]f a motor vehicle franchisor requires or permits a motor vehicle franchisee to . . . provide parts in satisfa ction of a warranty

created by the franchisor, the franchisor . . . shal l reimburse the

franchisee for any parts so provided at the retail rate customarily charged by that franchisee for the same parts when not provided in

satisfaction of a warranty.

10 Me. Rev. Stat. Ann. tit. 10, S 1176 (West 1994).

4. In holding that the district court had fashioned a rule unsupported by the statutory language, Acadia admonished that "fed eral courts must take great caution when blazing new state-law trail s." 44 F.3d at 1057 (citations and internal quotations omitted). This p rinciple, which we recognize as well, see Leo v. Kerr-McKee Chem. Corp ., 37 F.3d 96, 101 (3d Cir. 1994), is not implicated in this case wher e the district court properly applied the plain statutory language.

11contention that the DPS constitutes such a system. 5 In

Acadia, Ford reimbursed all Maine dealers at retail rates and assessed a "warranty parity surcharge" ("WPS") that added $160 to the price of every vehicle sold to Ma ine dealers "to recover [the] increase in its costs of doing

business in Maine." 44 F.3d at 1052. The total amou nt of the surcharge imposed on each dealer was "based on the number of cars sold, without regard to whether the dealer actually performed warranty work in that month." Id . at

1053.

Thus, in contrast to the DPS, Ford did not impose the WPS as a consequence of a dealer's warranty reimbursement claims, but instead assessed it as a result of a separate vehicle purchase transaction. Because the total amount of charges a dealer would incur under the WPS scheme depended on the "number of cars sold" an d not on the dealer's reimbursement amounts, the WPS operated as a bona fide wholesale price term that r esulted from and accrued in proportion to unregulated vehic le sales transactions rather than regulated warranty reimbur sement

transactions.

Contrary to Ford's assertion that "this factual dif ference . . . is completely irrelevant," reply br. at 11, w e find the

distinction to be critical. When a dealer incursfin ancial burdens upon making a retail-rate warranty reimburs ement claim, the dealer, in effect, is compensated for th e warranty transaction at a below-retail rate, which the NJFPA forbids. When, however, the dealer incurs financial burdens as a result of other transactions, those burdens may red uce the return the dealer receives on those transactions, b ut the terms of those transactions are unregulated. Theref ore the decreased compensation associated with those transa ctions

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5. Where, as here, a New Jersey court has not const rued the relevant statutory language, New Jersey courts seek guidance from cases construing similar statutes in other jurisdictions. See Neptune T.V. & Appliances Serv., Inc. v. Litton Microwave Cooking Prods. Div., 462 A.2d 595, 599 (N.J. Super. Ct. App. Div. 1983). Acadia, 44 F.3d 1050, is the only such case of which we are aware.

12does not violate the statute as does as a below-ret ail rate of

compensation for installing warranty parts.6

In light of these differences between the WPS at is sue in Acadia and the DPS at issue in this case, Acadia's approval of the "chosen mechanism for cost recovery" in that case, 44 F.3d at 1058, has little bearing on our examinat ion of the decidedly different cost-recovery mechanism in this case. Because the DPS, unlike the WPS, did not func tion as a wholesale price increase effected through vehicle sales transactions beyond the regulatory reach of the NJF PA, we find Acadia inapposite and reject Ford's contention that Acadia compels us to find the cost-recovery method before us permissible under the NJFPA. Based upon the uncontroverted facts regarding the structure and op eration of the DPS, we find that Ford's assessment of the D PS, by automatically reducing Liberty's reimbursements to belowretail rates, violates the NJFPA's clear mandate th at the

franchisor "shall reimburse" the franchisee for war ranty

___________________________________________________ ______________

6. The distinction holds practical as well as statu tory significance.

Since a dealer, under the standard franchise agreement, m ust perform all warranty repairs brought to its dealership and cann ot charge customers for those repairs but instead must accept the franc hisor's standard reimbursement, the dealer cannot control the volume , timing or profitability of those repairs. Thus dealers cannot mitigate losses they may incur in performing warranty repairs by control ling the terms of those transactions as they can in their other opera tions. Because losses incurred in the context of warranty transactions im pose these unique hardships on dealers, so do cost-recovery systems t hat assess charges as a result of and in proportion to those transactions

.

While Ford attempts to obscure this reality by argu ing that a dealer can redistribute warranty transaction losses throug h its other operations, see reply br. at 11 & n.2, this argumen t ignores the fact that a dealer neither can predict nor can control the pr oportion of its operations it will be required to devote to perform ing mandatory warranty repairs, and thus could recover fluctuatin g warranty losses only by constantly readjusting retail prices, which would be economically infeasible. Thus, a rule protecting dealers fromfin ancial burdens incurred through warranty transactions but not thro ugh other transactions not only comports with the statutory s cheme dictating the terms only of the former, but also recognizes the u nique hardships associated with warranty losses due to the dealer's lack of control over the terms of warranty transactions.

13parts "in an amount equal to the prevailing retail price."

N.J. Stat. Ann. S 56:10-15(a).7

In arguing that its DPS scheme comports with the NJFPA, Ford essentially argues that to achieve comp liance with the retail reimbursement mandate, a franchisor only

need record a nominal retail-rate credit to the dea ler, even if an offsetting debit ensures that the dealer neve r receives any reimbursement at the retail rate. Ford's defini tion of statutory compliance would require us to view its i nitial

retail-rate reimbursement in isolation from the sur charge that inevitably offsets that reimbursement, contrar y to the undisputed evidence that the offset followed ineluc tably from the incremental reimbursement and relegated Li berty to the same position as if it initially had receive d only the

standard reimbursement.8

Ford's strained construction of the NJFPA, which th e district court properly rejected as "formalistic, i n the extreme," slip op. at 9, would ascribe paramount importance to illusory transactions recorded on a d ealer's invoice while ignoring the reality of whether the f ranchisor actually reimbursed its franchisee "in an amount eq ual to the prevailing retail price" as the statute require s. Because a statute permitting illusory transactions with no economic effect would serve no legislative purpose, we find no indication that the New Jersey Supreme Court would adopt Ford's construction of the NJFPA contrary to that c ourt's pronouncement that statutes be construed in "a comm on

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7. Because the surcharge in this case resulted auto matically from Liberty's incremental reimbursement claims and beca use the total amount of the surcharge depended directly on the am ount of those claims, we need not decide the legality under the N JFPA of cost-recovery methods that depend on a dealer's reimbursement tra nsactions in some

less direct manner.

8. Indeed, in maintaining that the surcharge achiev ed "parity" between Liberty and competitors who received only standard reimbursements, Ford effectively recognizes that the DPS consigned Liberty to the same position as dealers who were reimbursed at Ford's r ates which were statutorily deficient as to Liberty. See app. at 32 1 ("[P]arity between

dealers . . . is essential. . . . To maintain that parity . . . and to

recover our increased costs . . . the Costs will be recover ed [through] a dealer parity surcharge.").

14sense manner to accomplish the legislative purpose. "

N.E.R.I Corp., 686 A.2d at 335. In fact, we are qui te confident that that court would reject Ford's NJFPA
argument.

Construing the statutory terms according to their p lain and ordinary meaning as is required under New Jerse y law, see Service Armament Co. v. Hyland, 362 A.2d 13, 16 (N.J. 1976); Cutler v. Borough of Westwood, 685 A.2d 44, 47 (N.J. Super. Ct. App. Div. 1996), certif. denied, 6 93 A.2d 112 (N.J. 1997), we conclude that the term "reimbur se," which is defined as "[t]o pay back, to make restora tion, to repay that expended; to indemnify, or make whole," BLACK'S LAW DICTIONARY 1287 (6th ed. 1990), is not satisfie d by transactions that fail to result in actual payment or restoration of the requisite sums. Accordingly we, like the district court, hold that in reducing Liberty to"th e same position as if it were reimbursed the standard thir ty to forty percent above cost," slip op. at 10, the DPS scheme violated "the clear language of the NJFPA" by denying Libert y reimbursement at its prevailing retail rate. Id. at 11.

2. Legislative Purpose

Because the district court properly construed the N JFPA "as it is written [and] . . . not according to some unexpressed intention," Unsatisfied Claim & Judgmen t Fund Bd. v. New Jersey Mfrs. Ins. Co., 637 A.2d 191 , 193 (N.J. Super. Ct. App. Div.), aff'd, 649 A.2d 1243 ( N.J. 1994), we find no merit in Ford's contention that t he district court erred by relying on legislative hist ory to expand the NJFPA beyond the scope of its plain stat utory language. See br. at 16. The legislative history, h owever, clearly does support a statutory interpretation tha t prohibits spurious transactions which ultimately fa il to

result in reimbursement at the dealer's retail rate

.

The New Jersey courts have held that the NJFPA is a remedial statute intended to equalize the disparity of bargaining power in franchisor-franchisee relations . See Kubis & Perszyk Assocs., Inc. v. Sun Microsystems, Inc., 680 A.2d 618, 626 (N.J. 1996) (recognizing NJFPA's "bas ic legislative objectives of protecting franchisees fr om the

15superior bargaining power of franschisors"); Tynan v.

General Motors Corp., 604 A.2d 99, 100 (N.J. 1992) (adopting reasoning of dissent below stating that"[ t]he Franchise Practices Act is remedial in purpose [and ] focuses on the need to protect franchisees from ine quitable treatment by economically more powerful franchisors ") (citing Tynan v. General Motors Corp., 591 A.2d 102 4, 1035 (N.J. Super. Ct. App. Div. 1991) (Cohen, J., dissen ting in part)); Westfield Ctr. Serv., Inc. v. Cities Serv. Oil Co., 432 A.2d 48, 52-54 (N.J. 1981) (discussing "disparity i n . . . bargaining power" addressed in NJFPA).9 Under New Jersey law, remedial statutes must be construed broadly to give effect to their legislative purpose. See Lemelledo v. Beneficial Management Corp., 674 A.2d 582, 585 (N.J

. Super. Ct. App. Div. 1996), aff'd, 696 A.2d 546 (N. J. 1997); Sabella v. Lacey Township, 497 A.2d 896, 898 (N.J. Super. Ct. App. Div. 1985).

The motor vehicle franchise provisions at issue, wh ich the legislature added to the NJFPA in 1977, were "d esigned to remove the franchisor's present opportunity to i solate himself from the warranty he issues." Legislative S tatement, L. 1977, c. 84, S 3, Assembly No. 1956 (May 24, 197 6) ("Legis. Statement"). In enacting the retail reimbu rsement requirement, the New Jersey legislature expressed i ts intent to "offer[ ] protection to the competent retailer a gainst arbitrary actions by manufacturers who too often ho ld a life-and-death power over his business and his abil ity to serve his customers." Id. In light of these stateme nts indicating an intent to shift responsibility toward franchisors who issue warranties and to protect dea lers in their transactions with franchisors, we agree with the district court that a construction of the NJFPA per mitting machinations which ultimately fail to afford the de aler reimbursement for warranty parts at its retail rate would "fly in the face of the intent of the New Jersey le gislature

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9. In a 1989 amendment to the NJFPA adopted after t he 1977 provision at issue, the New Jersey legislature explicitly cod ified its concern over the "inequality of bargaining power . . . between m otor vehicle

franchisors and motor vehicle franchisees." See N.J . Stat. Ann. S 56:10- 7.2(b).

16. . . and would undermine the purpose of the Act." Slip op.

at 11.

Ford attempts to diminish the significance of the 851<!>legislative history by arguing that the New Jersey

legislature identified several consumer protection concerns before expressing its intent to protect dealers. Se e reply br. at 6 (citing Legis. Statement). The legislature, ho wever, did not indicate the relative importance of these conce rns. We

therefore find no relevance in the order in which t he legislature articulated them. In any event, the sta ted consumer protection concerns of ensuring that warra nty

customers receive the same service as retail custom ers and that warranty work be performed according to genera lly acceptable standards, see Legis. Statement, are ali gned closely with the intent to protect dealers from arb itrary actions by franchisors. Dealers who receive below-r etail compensation for installing warranty parts are disc ouraged from devoting the same resources to installing thos e parts as they devote to installing those for retail custo mers.10 Thus, the consumer protection concerns behind the N JFPA further support a statutory interpretation which fo cuses on the compensation rate the dealer effectively receiv es in connection with its warranty transactions and not o n whether the franchisor recorded a nominal transacti on crediting the dealer at the requisite rate.

Ford also argues that the district court erred in concluding that, "[a]lthough the Act is silent rega rding whether and how franchisor-manufacturers may distri bute compliance costs, it cannot be the case that the fr anchiseedealers--the class of intended beneficiaries--bear the entire burden." Slip op. at 11. According to Ford, the dis trict court erred in reaching this conclusion as to the intende d effect of the NJFPA, since regulated entities frequently p ass statutory compliance costs along to retailers who d o not then "bear the entire burden" of those costs, but r ather pass those costs on to consumers. See br. at 18-19; 20-21.

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10. Because the reimbursement rate for the labor as sociated with warranty repairs is not at issue, we assume equal r ates for the labor used in warranty and non-warranty repairs.

17We are unpersuaded by this argument, which ignores the

fact that the purported "compliance costs" which Fo rd shifted to Liberty were not incidental to complianc e with an independent regulatory mandate, such as a vehicle s afety standard or an environmental regulation, but rather were the very subject of the substantive regulation at i ssue, which explicitly mandates that "the motor vehicle f ranchisor shall reimburse" its franchisee at the "prevailing retail price." N.J. Stat. Ann. S 56:10-15(a) (emphasis add ed).

In contending that it may shift to Liberty the cost of complying with that mandate, Ford essentially insis ts that it can achieve statutory compliance by requiring Li berty to reimburse itself.11 This shifting of the retail cos t of warranty parts not only violates the clear mandate that Ford as the franchisor pay Liberty the retail price for warrant y parts, but also frustrates the purpose behind a statute th at was intended to deny the franchisor the "opportunity to isolate himself from the warranty he issues," to protect de alers against "arbitrary actions by manufacturers," and t o ensure that warranty repairs are of the same quality as re tail repairs. Legis. Statement. Accordingly, we agree wi th the district court's conclusion that Ford's imposition of the DPS contravened the legislative purpose as well as the clear statutory language of the NJFPA. We, therefore, wil l affirm the March 13, 1996 order granting Liberty's motion for summary judgment on its NJFPA claim.

B. The September 19, 1996 Order

After the district court entered its March 13, 1996 order holding that the DPS violated the NJFPA, Ford cease d imposing the DPS, but adopted a new policy requirin g

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11. Since the DPS deprived Liberty of the reimburse ment which Ford statutorily was obligated to pay, the issue of whet her Liberty, as Ford argues, effectively could recover the losses result ing from this deprivation through other transactions becomes immaterial. See br. at 18-21. We note, however, that in light of the difficulties in herent in redistributing warranty losses through retail transactions, see su pra note 6, the

district court appears to have been correct in finding that dealers ultimately would bear a significant portion of the costs shift ed to them through the DPS. See slip op. at 8.

18dealers to document claimed retail rates by submitt ing

proof of the prices the dealer charged actual retai l customers for the same part during the prior six mo nths. See app. at 513-17. After Ford rejected Liberty's reimbursement claims for failure to comply with thi s requirement, Liberty objected to the requirement in a Motion to Enforce the district court's March order, which alleged that Ford's new policy imposed insurmountab le burdens designed to preclude dealers from receiving retailrate reimbursements. See id. at 498-500. Ford respo nded that it adopted its policy in a good faith attempt to comply with the "part-by-part, sale-by-sale" retail rate a nalysis set forth in Liberty I, 149 F.R.D. at 76, and sought di scovery as to how burdensome other dealers found the policy an d as

to the methods other franchisors used to determine their dealers' retail rates, in order to refute Liberty's allegations that Ford's policies were excessively burdensome. S ee app. at 729-30.

Although the district court denied Liberty's Motion to Enforce "given the non-specific language of the Mar ch 13, 1996 order," slip op. at 1, it entered an order"nun c pro tunc to March 13, 1996" requiring Ford to adhere to the "procedure the parties followed . . . until . . . A pril 1996, i.e., reimbursement . . . at [Liberty's] retail rat e, calculated . . . at 77% over [Liberty's] cost." Id. at 2-3. Th e court ordered Ford to continue processing Liberty's reimbursement claims based on a 77% markup "unless and until the parties agree that a retail rate, calcula ted at a later date, is more accurate, another mutually acce ptable computation of the retail rate is agreed upon, or, as long as this court retains jurisdiction, on a showing by[Fo rd] that the procedure should be changed." Id.12

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12. The impact of this order is significant. Ford d isputed whether Liberty's claimed 77% markup was reasonable, see ap p. at 321, but had no reason to pursue the issue in light of the DPS, which reduced Liberty's reimbursements to Ford's standard 30-40% markup, rendering the claimed retail rate irrelevant. However, after the court invalidated

the DPS the retail rate became determinative of the req uired reimbursement amount. Yet the court, in its September order, boun d Ford to the 77% rate Ford had accepted under protest and precluded Ford from adopting any method for questioning or substantiating that r ate.

19Ford contends that the district court erred in rest ricting

Ford's new reimbursement policy, the legality of wh ich neither was challenged in Liberty's complaint nor w as addressed in the district court's prior order, with out providing Ford an adequate opportunity to address t he factual and legal issues surrounding the policy. We agree, and therefore will reverse the September 19, 1996 o rder.

The district court did not explain the procedural g rounds upon which it proceeded to award relief restricting Ford's policy, after denying the only motion contesting th at policy.13

While it is unclear whether the district court inte nded the order as a sanction for what it perceived as an "en d run around the clear intention of" the March order, sli p op. at 1-2, or as an entry of judgment on Liberty's allega tion that Ford's newly adopted policy violated the NJFPA, we

conclude that we cannot sustain the order on either basis.

We cannot sustain the September order as a sanction for noncompliance with the court's March order because the policy which the court restricted in the September order did not violate any clear mandate set forth in the Marc h order. The district court in fact denied Liberty's Motion to Enforce the March order "given the non-specific language" t hereof, and thus recognized that the March order, in invali dating the DPS as an offset against a dealer's claimed ret ail rate, did not preclude Ford from requiring a dealer to substantiate its claimed retail rate. Slip op. at 1 . 14 This

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13. Liberty's complaint, which challenged the impos ition of the DPS to offset its retail rate, is silent as to the proper method for establishing

the retail rate. While the complaint sought an injuncti on against any "financial imposition . . . as a recoupment . . . f or reimbursements paid or to be paid," it did not seek any relief dictatin g Liberty's retail rate

or the procedure used to establish it. See app. at 19- 20. The district

court's March order is equally silent regarding the proper calculation of Liberty's

retail rate.

14. In discussing the scope of its March order, the district court explained,

the specific declarations as to liability wh ich[Liberty] sought in Count One, while implicit in [the March] ord er granting summary judgment as to Count One, were not explicit, presumably the reason why the spirit if not the letter of that ord er -- and certain specific20court repeatedly has refused to uphold orders enter ed as

sanctions based on conduct that did not violate a c lear, specific mandate. See, e.g., Harris v. City of Phil adelphia, 47 F.3d 1342, 1352 (3d Cir. 1995) (reversing imposi tion of sanctions where decree sought to be enforced lacked "an unambiguous provision" prohibiting the conduct at i ssue); Louis W. Epstein Family Partnership v. Kmart Corp., 13 F.3d 762, 771 (3d Cir. 1994) (holding that "[b]road, non -specific language" in an order does not give a party "fair n otice of what conduct will risk contempt" and thus cannot su pport imposition of sanctions); Eavenson, Auchmuty & Gree nwald v. Holtzman, 775 F.2d 535, 544 (3d Cir. 1985) (hold ing that where party had "reasonable grounds to believe" con duct "was in compliance with the district court's order, " "imposition of sanctions was not warranted and cons tituted an abuse of discretion"); Inmates of Allegheny Coun ty Jail v. Wecht, 754 F.2d 120, 129 (3d Cir. 1985) ("Persons m ay not be placed at risk of contempt unless they have been given specific notice of the norm to which they must patt ern their conduct."). Because the March order did not contain a clear, specific mandate precluding Ford from adopti ng policies for verifying a dealer's retail rate or re quiring Ford to apply a particular retail rate, we cannot sustai n the September order as a sanction against Ford's purpor ted

"end run around the clear intention of" the March o rder. Slip op. at 2.

Nor can we sustain the September order as an entry of judgment on Liberty's claim, first raised in its Mo tion to Enforce, that Ford's new policy violated the NJFPA. A court

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language in and the clear thrust of the opin ion-- have since been ignored or evaded by [Ford].

Slip op. at 1. The district court did not and this court cannot identify any "specific language" in the March opinion that w as "ignored or evaded" by Ford's new reimbursement policy. Even if the declarations of liability Liberty sought in Count I had been "expli cit" in the March order, those declarations dealt exclusively with surcharge s that offset retail rates and not with procedures for establishing reta il rates. See app. at 18-19. Nothing in the March order explicitly or imp licitly required Ford to accept Liberty's claimed retail rate of 77% or p rohibited Ford from adopting policies for substantiating dealers' retai l rates.

21may enter summary judgment in favor of a party only when

the pleadings and the factual record before the cou rt demonstrate that there "is no genuine issue as to a ny material fact" and the party is "entitled to a judg ment as a matter of law." Fed. R. Civ. P. 56(c). In applying these standards, the court must construe the facts in the light most favorable to the party against whom judgment i s sought. See Lawrence v. National Westminster Bank N ew Jersey, 98 F.3d 61, 65 (3d Cir. 1996). Moreover, be fore entering summary judgment against a party, the cour t must afford that party "adequate notice and time to present to the district court material relevant to [its] cl aim in order to demonstrate that there is a genuine issue of mat erial fact that renders summary disposition . . . inappropriat e." Hilfirty v. Shipman, 91 F.3d 573, 578 (3d Cir. 1996 ). The court also must provide an adequate opportunity for discovery of the material facts. See Kachmar v. Sun gard Data Sys., Inc., 109 F.3d 173, 183 (3d Cir. 1997).

In this case the district court entered a judgment awarding relief against Ford without granting it an opportunity to obtain discovery or present evidence regarding the material issues as to the nature of t he new reimbursement procedure, the burdens associated therewith, and the intent underlying its adoption. While the district court made no explicit factual findings an d disavowed any attempt to resolve these factual issu es, stating that it "need not . . . and will not addres s the procedure imposed by Ford . . . following this cour t's [March] decision," slip op. at 3 n.2, the court, no netheless, clearly based the September order on implicit factu al determinations regarding the newly adopted procedur e.

The court described that procedure as "onerous in t he extreme and designed to frustrate any attempt to ob tain statutory reimbursement." Id. Moreover, the court's final order described the circumstances of the September order

as follows:

Liberty filed a motion to enforce the March [order] arguing that [Ford's] new procedure acted as an unlawful barrier to Ford's statutory complia nce . . . [through] an impracticable or impossible pro cedure

22that violates the NJFPA and this court's pre vious

Opinion and Order.

This court agreed. The new procedure . . . imposed a literally impossible burden . . . .

February 26, 1997 slip op. at 4. The court's final order thus confirms that the September order rested on implici t findings that Ford's new policy imposed "impossible " and unlawful burdens, id. at 4, that were intended "as nothing more and nothing less than an end-run around" the M arch

order. Id. at 12. Because the court made these find ings regarding Ford's newly adopted policy and awarded L iberty relief based upon those findings without allowing F ord to obtain discovery or demonstrate the existence of ge nuine

issues of material fact as to the lawfulness of the policy, we must vacate the September order. See Kachmar, 109 F .3d at 183; Hilfirty, 91 F.3d at 578.15

The September 19 order awarded only declaratory and injunctive relief. Accordingly, as Ford concedes, s ee br. at 34, our reversing that order has no effect on the a ward of damages in the district court's final order. It, ho wever, may affect the district court's assessment of the "resu lt

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15. While our holding rests on the grounds discusse d above, we also note that Liberty was awarded judgment on a claim n ot raised in the complaint. See Morris v. Philadelphia Hous. Auth., 1996 WL 167615 at * 4 (E.D. Pa.) ("plaintiff may not move for summary judgment on claims not raised in the complaint"), aff'd, 106 F.3d 386 (3d Cir. 1996) (table); Landano v. United States Dep't of Justice, 873 F. S upp. 884, 891 (D.N.J. 1994) ("Plaintiff did not allege [the] claim in its complaint and cannot raise [it] on a . . . motion for summary judgment." ). The September order awarded declaratory and injunctive relief other tha n that discussed above. However, absent a properly supported determi nation that Ford

had violated the NJFPA or an order of the court sin ce the entry of the March order, we cannot sustain any of the relief aw arded in the September order.

In reversing the September order on procedural grou nds, we express no opinion on the merits of the issues implicitly r esolved therein. We note only that the existence of colorable authority for requiring dealers to establish retail rates on a part-by-part basis, see Acadia, 44 F.3d at 1052; Liberty I, 149 F.R.D. at 76, further accentua tes the need to assess the lawfulness of Ford's documentation policy based on a properly developed record.

23obtained" by Liberty in this litigation, which the court

considered in calculating the award of attorneys' f ees in its final order. See February 26, 1997 slip op. at 10. Accordingly, we will vacate the fee award and will remand that portion of the district court's February 26, 1 997 final order for consideration of the effect, if any, of t his opinion on the amount of fees Liberty is entitled to recove r.

C. Robinson-Patman Act

The Robinson-Patman Act, a 1936 amendment to the Clayton Act, provides in relevant part that:

[i]t shall be unlawful for any person engage d in commerce, in the course of such commerce . . . to discriminate in price between different purc hasers of commodities of like grade and quality, . . . where the effect of such discrimination may be substan tially to lessen competition or tend to create a monop oly . . . or to injure, destroy, or prevent competition .

. . .

15 U.S.C. S 13(a).16 To state a claim under the Rob insonPatman Act, a plaintiff must allege facts demonstra ting the existence of price discrimination, which the Suprem e Court has defined as "merely a price difference." Texaco Inc. v. Hasbrouck, 496 U.S. 543, 558, 110 S.Ct. 2535, 2544 (1990); Federal Trade Comm'n v. Anheuser-Busch, Inc ., 363 U.S. 536, 549, 80 S.Ct. 1267, 1274 (1960).17

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16. The Act contains a proviso exempting "price dif ferentials which make only due allowance for differences in the cost of m anufacture, sale or delivery resulting from the differing methods or qu antities in which such

commodities are . . . sold or delivered." 15 U.S.C. S 13(a). Because we conclude that Ford did not engage in price discrimi nation or inflict competitive injury within the meaning of the Act, w e need not consider the applicability of the proviso.

17. Anheuser-Busch was a primary line injury case a ddressing injury to the discriminating seller's competitors, in contras t to this secondary

line injury case, which alleges injury in competition am ong the discriminating seller's customers. See Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98, 106 n.16 (3d Cir. 1992) (discussing di stinction between primary and secondary line injury cases). While Anh euser-Busch's broad definition of price discrimination generally is app licable in secondary

line

24The district court dismissed Liberty's claim on the

grounds that its allegations challenging the DPS as a form of unlawful price discrimination "fail[ ] to demons trate the existence of a price difference." Slip op. at 12. T he court explained that:

while it is true that no other . . . dealer was or is subject to a surcharge, this is because no o ther dealer attempted to enforce the NJFPA. [Liberty] is being reimbursed for warranty parts at seventy-sev en percent above cost at the same time that [its] compe titors are being reimbursed the standard thirty to fort y percent above cost. The surcharge was merely a devic e to recoup the extra costs [Ford] incurred by re imbursing [Liberty] at the retail rate.

Thus, the surcharge eliminated any price di fference that existed by virtue of [Liberty's] enforc ement of the NJFPA . . . . [Liberty] was placed in the sa me position as its competitors: all dealers were effecti vely reimbursed at the standard rate, albeit in v iolation of the NJFPA. Thus, there was no price differen ce.

Id. at 12-13. Exercising plenary review over the di strict

court's dismissal for failure to state a claim and accepting Liberty's factual allegations as true, see Graves v . Lowery, 117 F.3d 723, 726 (3d Cir. 1997), we agree with the district court's conclusion that Liberty's complaint fails t o allege actionable price discrimination.18

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injury cases, see Stelwagon Mfg. Co. v. Tarmac Roof ing Sys., Inc., 63 F.3d 1267, 1271 (3d Cir. 1995), cert. denied, 116 S .Ct. 1264 (1996), this court has warned "against elevating this isolated p assage to an allinclusive definition" particularly in secondary lin e injury cases. Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 1 05, 120 (3d Cir. 1980).

18. Because the district court disposed of Liberty' s Robinson-Patman Act claim on Ford's motion to dismiss, we confine our a nalysis to Liberty's allegations and do not consider matters outside the pleadings. We note, however, that the evidentiary record regarding the operation of the DPS, as discussed above in our analysis of the NJFPA iss ues resolved on a motion for summary judgment, lends further support to our conclusion that the DPS did not result in actionable price dis crimination.

25According to Liberty's own factual allegations,

Ford would . . . recoup the increase in reim bursement [beyond Ford's standard rate] by assessing a gainst Liberty . . . a `dealer parity' . . . surcha rge to the wholesale price of each vehicle . . . equal to the incremental credit for parts; that is, Ford would effectively cancel out the additional reimbu rsement . . . . [and] effectually continues to underreimburs e Liberty . . . for warranty work . . . .

App. at 17-18 (emphasis added). Thus, the facts all eged in the complaint demonstrate that Ford used wholesale vehicle prices as a method for implementing the DPS policy,

the intent and effect of which was to reduce Libert y's reimbursements, not to alter vehicle prices.19 Beca use the complaint fails to allege any facts demonstrating a n actual increase in vehicle prices, we agree with the distr ict court's conclusion that, "[a]lthough these actions violate the NJFPA, they do not create a price difference among[ Liberty] and its competitors which violates . . . the Robins onPatman Act." Id. at 13. We therefore will affirm th e dismissal of Liberty's claim for failure to allege facts demonstrating that Ford engaged in price discrimina tion.20

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19. Similarly, Liberty states in its brief to this court, "Ford applied

the surcharge to the wholesale price of each vehicle [a nd] thus canceled out

the incremental reimbursement. . . . Once this shel l-game maneuver was complete, Liberty did not receive retail reimbursem ent . . . ." Br. at 15- 16; see also id. at 23 ("the `parity surcharge' mea nt no [warranty parts] payment at retail"); id. at 38 ("[t]he price differ ential . . . is expressly a recoupment of the incremental warranty reimbursemen t").

20. Assuming arguendo that the surcharge could be v iewed as a term affecting vehicle costs rather than reimbursement r ates, a "uniform pricing formula applicable to all customers is not a price discrimination under the [Robinson-Patman] act." Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 120 (3d Cir. 1980); acc ord, FLM Collision Parts, Inc. v. Ford Motor Co., 543 F.2d 1019, 1026 (2d Cir. 1976) (finding "no violation . . . in pricing plans which, though varying prices according to different terms of sale, were administered equal ly to all purchasers"). Ford's policy was to recoup through the DPS any rei mbursement exceeding Ford's standard rate. The fact that Liber ty, as the only dealer to claim incremental reimbursements, was the only d ealer to incur charges under this uniform policy does not give ris e to a price

discrimination claim.

26Even if the DPS resulted in a vehicle price differe nce, we

would be compelled to affirm the dismissal on the g rounds that Liberty's allegations do not demonstrate the e xistence of the competitive injury required to sustain a Rob insonPatman Act claim. As this court has explained, "pri ce discriminations are not illegal per se. . . . [I]n order for a price difference to be illegal . . . [it] must have the proscribed anti-competitive effect." J.F. Feeser, I nc. v. Serva-Portion, Inc., 909 F.2d 1524, 1532 (3d Cir. 1990) (citing Anheuser-Busch, 363 U.S. at 533, 80 S.Ct. at 1276). Liberty's complaint did not allege competitive inju ry resulting from the imposition of the DPS. See app. at 24. While Liberty alleged "economic loss . . . as a con sequence of . . . underreimbursement," it did not allege tha t this loss placed it at a disadvantage relative to its competi tors who were subjected to the same underreimbursement. Id. at 18. In arguing to this court that the DPS inflicted com petitive injury because it was "exacted from Liberty and non e of its competitors," br. at 38, Liberty ignores the fact t hat, according to its complaint, the DPS was calibrated to "equal . . . the incremental credit" that Liberty received while its competitors did not. App. at 18.21 Because any disadvantage arising from the DPS merely offset an advantage conferred uniquely on Liberty, the DPS di d not have the anticompetitive effect required to state a claim under the Robinson-Patman Act. See J.F. Feeser, 909 F.2d

at 1532.

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21. Liberty suggests, in passing, that the surcharg e "could exceed the warranty parts reimbursement at any given time." Re ply br. at 6. The district court properly rejected any attempt to bas e a price discrimination claim on discrepancies between the a mount of the

incremental reimbursement and the amount of the sur charge, as these discrepancies related only "to particular surcharge s" and not to "the structure of the surcharge system," slip op. at 13 n.2, which by Liberty's own admission assessed charges that equaled the tot al incremental reimbursements. See app. at 18. Thus any difference in Liberty's economic position relative to its competitors was t emporary and

incidental and therefore not actionable under the R obinson-Patman Act. See Craig v. Sun Oil Co., 515 F.2d 221, 224 (10th C ir. 1975) (rejecting price discrimination claim "based upon . . . billin g errors . . . which

were corrected").

27D. Parts Installed Before December 1991

In its motion for summary judgment on the issue of 704<!>damages, Liberty sought to recover not only the

incremental reimbursements it was denied as a resul t of the surcharge, but also additional reimbursements f or warranty parts installed before December 12, 1991, the effective date of Ford's agreement to credit Libert y at retail rates subject to the surcharge. Citing Ford's warra nty manual, which permits dealers to submit reimburseme nt claims for up to one year after a warranty part is installed, Liberty argued that because it demanded retail-rate reimbursements on December 12, 1991, it was entitle d to additional reimbursements to supplement the standar d reimbursements it had received for parts installed during the year preceding December 12, 1991. See February 26, 1997 slip op. at 6.

The district court held that, "[t]his legal issue w as never addressed during the liability phase of this case b ecause Liberty explicitly waived all claims other than its claim for illegal surcharge since December 12, 1991." Id. at 7. The district court cited Liberty's brief regarding liab ility, in which Liberty expressly stated that it "claim[ed] l iability only on the reimbursement amounts recovered by Ford by illegal surcharge since December 1991." Thus, the c ourt concluded, "[b]ecause the court did not grant summa ry judgment as to liability on this issue, it cannot n ow award damages." Id.

Liberty's briefs to this court do not challenge the waiver determination that the district court found disposi tive, but rather address only the merits of Liberty's entitle ment to additional reimbursements for parts installed befor e December 12, 1991.22 The district court's order ent ering

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22. Liberty addresses the waiver issue only by stat ing that "Ford's liability for retail payment on claims submitted si nce December 12, 1991 was never waived. It is recognized in the Court's O rders and decisions, with the exception of the final ruling on . . . dam ages." Reply br. at 12 (emphasis added). The district court's orders did n ot "recognize" any liability as to warranty parts installed before Dec ember 12, 1991. In the portion of Liberty's brief asserting that it preser ved the issue in the district court, Liberty states only that it raised the issue "as to damages" and does not cite any part of the record where it s ought to establish Ford's liability for the reimbursements at issue. S ee br. at xiv.

28judgment as to Ford's liability under the NJFPA exp licitly

stated, "[f]or the reasons stated herein, the court grants [Liberty's] motion for summary judgment as to liabi lity, since December, 1991 only." Slip op. at 14. We ther efore conclude that the district court properly refused t o award damages on this claim which Liberty failed to raise at the liability stage of the proceedings.

Even if Liberty had not waived the issue, undispute d

evidence demonstrates that Ford is not liable for a ny additional reimbursements for parts installed befor e December 1991. Liberty claims that it is entitled t o additional reimbursements for parts installed betwe en December 12, 1990, and December 12, 1991, because t he relevant warranty agreement permitted dealers to su bmit reimbursement claims within one year from the date of repair. See app. at 139 ("After 1 year from date of repair . . . [w]arranty . . . claims will not be accepted."). Li berty contends that, because Ford first agreed to reimbur se Liberty at retail as of December 12, 1991, Ford is obligated to pay Liberty the incremental reimbursement for al l warranty parts Liberty installed after December 12, 1990, to supplement the below-retail reimbursements Liber ty received for installing those parts. Br. at 40-41.

However, contrary to Liberty's assertion that it

"submitted incremental reimbursement claims" on December 12, 1991, id., the letter of that date mer ely requested an increase in Liberty's reimbursement ra te and did not submit any specific reimbursement claims or make reference to any parts already installed and reimbu rsed at a lower rate. See app. at 286 ("I hereby apply for an increase in warranty parts markup . . . to my retai l markup."). Liberty first made specific retail-rate reimbursement claims "for the period of December 12 , 1991 to June 30, 1992," in a letter dated September 23, 1992, again making no reference to parts installed before December 12, 1991. App. at 316-17. It was not until December 21, 1992, that Liberty first submitted a r equest for retail-rate reimbursement for parts installed b efore December 12, 1991. This request included parts inst alled during "the years 1986 through 1991 inclusive." App . at

326.

29Thus, Liberty did not seek the additional reimburse ments

at issue until December 21, 1992. As Ford accuratel y contends, pursuant to the warranty manual Liberty's claims "were time-barred on the date they were made " as they pertained to repairs performed before December 21, 1991. Reply br. at 30.23 Because Liberty failed to seek the reimbursements at issue within one year of the repa ir date, it is immaterial that Liberty sought a higher reimb ursement rate on December 12, 1991, in a request that did no t present any specific reimbursement claims.24 Simila rly, it is immaterial that "[a]s of December 12, 1991, all of Liberty's claims back one year from [the] date of repair were eligible for the incremental warranty payment," reply br. at 13, since Liberty failed to submit those claims before that eligibility expired on December 12, 1992. According ly, even if Liberty had not waived its claim to recover addi tional reimbursements for parts installed before December 12, 1991, we would affirm the district court's rejectio n of that

claim.

E. Prejudgment Interest Rate

In its February 26, 1997 final order the district c ourt, applying the principles of state law that govern aw ards of prejudgment interest in federal diversity actions, see Zippertubing Co. v. Teleflex, Inc., 757 F.2d 1401, 1414 (3d Cir. 1985); W.A. Wright, Inc. v. KDI Sylvan Pools, Inc., 746 F.2d 215, 219 (3d Cir. 1984), awarded Liberty preju dgment interest on its NJFPA damages at the rates set fort h in New Jersey Court Rule 4:42-11. Slip op. at 8-9. Under N ew Jersey law, a court may award prejudgment interest in its discretion in accordance with equitable principles, and the

court's exercise of its discretion should not be di sturbed on

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23. Liberty did not distinguish the 1991 claims fro m the even more untimely claims dating back to 1986.

24. While Liberty argues that "for the most part" t he claims at issue were "already submitted and approved" at Ford's standard rate, reply br. at 13, Liberty makes no argument to support its appare nt suggestion that claims for additional reimbursements are exempt fro m the one-year limitation period that on its face applies to all w arranty reimbursement claims. See app. at 139.

30appeal unless it represents "a manifest denial of j ustice." In

re Petition of County of Essex, 691 A.2d 846, 858 ( N.J. Super. Ct. App. Div.), certif. denied, 700 A.2d 876 (N.J. 1997); accord Coastal Group, Inc. v. Dryvit Sys., I nc., 643 A.2d 649, 654 (N.J. Super. Ct. App. Div. 1994).

The district court found that, "because Ford has ha d the use, and Liberty has not, of the funds retained by Ford by way of illegal surcharges," Liberty was entitled to interest on the surcharges from December 1991 through March 1996. The court concluded that New Jersey Court Rul e 4:42-11, which sets forth postjudgment interest rat es and prejudgment interest rates in tort suits, "reflect[ ed] an equitable rate of return" under the circumstances o f the case. See slip op. at 8-9 (citing Zippertubing Co., 757 F.2d at 1414; W.A. Wright, Inc., 746 F.2d at 219). Liber ty

contends that the district court abused its discret ion in applying the New Jersey Court Rules instead of adop ting the involuntary loan theory recognized in A-S Dev., Inc. v. W.R. Grace Land Corp., 537 F. Supp. 549 (D.N.J. 198 2), aff'd, 707 F.2d 1388 (3d Cir. 1983) (table). Libert y argues that under this theory, the district court should h ave applied the interest rate Ford would have charged L iberty for late payments or loans during the same period. See br.

at 41.

In arguing that the involuntary loan theory is "particularly appropriate" since Liberty "partially underwrote Ford's coverage of its manufacturing def ects," id. at 41, 43, Liberty ignores the fact that A-S De velopment applied the involuntary loan theory as an element o f damages and not as a measure of prejudgment interes t. See A-S Dev., 537 F. Supp. at 559 (holding that"plainti ff is entitled to damages in an amount to be calculated o n the involuntary loan theory"). Liberty points to nothin g requiring the district court, in its discretionary weighing of equitable considerations, to adopt this theory and nothing indicating that the interest rates set forth in the New Jersey Court Rules were inequitable under the circumstance s of

the case.25

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25. Liberty emphasizes that the award of prejudgmen t interest must be determined by "equitable principles," reply br. at 14-15, but raises no arguments and cites no authority indicating that th e district court misapplied these principles.

31Liberty also challenges the district court's conclu sion that

"[b]ecause Liberty has asserted its claim under N.J .S.A. 56:10-10 and 56:10-15, it is not entitled to prejud gment interest at 12% under N.J.S.A. 56:10-13.5, which ap plies only to claims under that section." Slip op. at 9 n .3. Liberty argues that "this Court could properly apply" N.J. Stat. Ann. S 56:10-13.5, br. at 42, which provides that,

[i]f a motor vehicle franchisor fails to mak e any payment required by this 1991 amendatory and supplementary act within the time specified for payment, interest shall be added to that pay ment at the rate of 12% per annum from the date paym ent was

due.

This provision, by its terms, applies only to payme nts required by the 1991 amendatory and supplementary a ct. It does not apply to Liberty's claim to recover a p ayment required by N.J. Stat. Ann. S 56:10-15(a), which wa s codified in 1977 and is not part of the 1991 amenda tory and supplementary act. Although section 56:10-15 wa s amended by the 1991 act, payments required by that section are not payments required by the 1991 act, but are payments required by the 1977 act.26 Liberty has no t identified, and this court cannot discern, any abus e of

discretion in the district court's determination th at the interest rates provided for in New Jersey Court Rul e 4:42- 11 were equitable under the circumstances of this c ase. Accordingly, we will affirm the district court's aw ard of prejudgment interest.

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26. Liberty argues that the N.J. Stat. Ann. S 56:10 -13.5 interest provision was "enacted at the same time the Legislature amend ed the warranty reimbursement provision" and is found in the"same s tatute which amended the NJFPA Warranty Reimbursement Act." Br. at 42; reply br. at 16. However, the 1991 amendments to N.J. Stat. A nn. S 56:10-15 did not affect section 56:10-15(a) but simply added sec tion 56:10-15(c) which is not implicated in this case. Liberty's arg uments do not alter the fact that Liberty sought payments required by a pre existing provision, N.J. Stat. Ann. S 56:10-15(a), and not by the 1991 amendatory and supplementary act.

32F. Costs Associated With The Retail Rate Analysis

The district court awarded Liberty counsel fees and costs associated with this litigation, but rejected Liber ty's claim for fees and costs associated with Liberty I becaus e Liberty was not a prevailing party in that case, which culm inated in a denial of class certification and a stipulatio n of dismissal. See slip op. at 10-11. Liberty contends that the district court erroneously excluded, as a cost asso ciated with Liberty I, the $26,185.15 in fees Liberty incu rred in compiling a part-by-part analysis of its retail rat e over six years. Liberty contends that, because it compiled t he analysis after the dismissal in Liberty I,"in conte mplation of and in preparation for" the instant case, and be cause its counsel "reviewed the analysis as part of its litig ation strategy" and "briefed and argued" the results ther eof in this litigation, the district court should have inc luded the fees associated with the analysis in its fee award instead of excluding them along with the fees arising from Lib erty I. Reply br. at 17-18; br. at 44.

While the district court did not articulate a separ ate rationale for excluding the disputed fees along wit h the Liberty I fees, it is readily apparent that the fee s at issue are not recoverable in this litigation. Liberty pre vailed in this litigation on the issue of whether Ford could assess the dealer-parity surcharge to offset a retail-rate reimbursement, an issue that did not require any verification of Liberty's claimed retail rate. 27 T herefore the fees incurred in compiling the retail rate analysis were not "reasonably expended" in pursuit of the "result obt ained" in this litigation, and thus properly were excluded fr om the fee award even if they were not incurred in connection with Liberty I. Slip op. at 10-11 (citing Hensley v. Eck erhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939 (1983)). We,

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27. Liberty arguably raised the issue of its retail rate in its Motion to

Enforce the district court's March order. In that m otion, however, Liberty

contended that Ford was not entitled to demand docu mentation of Liberty's part-by-part retail rates over the past s ix months. Thus Liberty's motion in no way required a detailed analysis docum enting those rates over the past six years. In any event, because Libe rty was not entitled to the relief awarded in the September 19, 1996 order, Liberty has obtained no relief on any claim implicating the validity of its retail rates.

33accordingly, will affirm the district court's exclu sion of fees

associated with Liberty's retail rate analysis from its fee

award.

IV. CONCLUSION

For the foregoing reasons, we will reverse the dist rict court's September 19, 1996 order and will vacate an d remand for reconsideration in light of this opinion the award of attorneys' fees in the district court's Fe bruary 26, 1997 final order. We, however, will affirm in all o ther respects. The parties will bear their own costs on this appeal.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

34