SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5496-16T1

SPEEDWAY LLC,

Plaintiff-Appellant,

v.

THE STATE OF NEW JERSEY

and ATTORNEY GENERAL

GURBIR S. GREWAL,

Defendants-Respondents.

____________________________

Argued December 11, 2018 – Decided April 24, 2019

Before Judges Yannotti and Natali.

On appeal from Superior Court of New Jersey, Law 

Division, Mercer County, Docket No. L-0284-17.

Brian J. Molloy argued the cause for appellant

(Wilentz, Goldman & Spitzer, PA, attorneys; Brian J. 

Molloy and Daniel J. Kluska, of counsel and on the 

briefs).

Renee Greenberg, Deputy Attorney General, argued the 

cause for respondents (Gurbir S. Grewal, Attorney 

General, attorney; Jason W. Rockwell, Assistant 

Attorney General, of counsel; Wendy Leggett Faulk

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the 

internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
2

A-5496-16T1

and Renee Greenberg, Deputy Attorneys General, on 

the brief).

Brennan Law Firm, attorneys for amicus curiae New 

Jersey Gasoline-C-Store-Automotive Association and 

Fuel Merchants Association of New Jersey (Francis J. 

Brennan, III and Craig A. Cox, of counsel and on the 

brief). 

PER CURIAM

Over seventy-five years ago, the New Jersey Legislature established "[a]n 

act to regulate the retail sale of motor fuels" (1938 Act), N.J.S.A. 56:6-1 to -17. 

Among other provisions, the 1938 Act prohibits retail dealers from selling 

gasoline below the net cost of the fuel plus all selling expenses, defined as "all 

overhead and general business expense[s]." N.J.S.A. 56:6-2(b); N.J.S.A. 56:6-1.

On October 16, 2016, the Middlesex County Department of Weights and 

Measures filed two complaints in the Woodbridge Municipal Court against 

plaintiff Speedway, LLC, alleging it violated N.J.S.A. 56:6-2(b) because it sold 

gasoline at its Hopelawn filling station below cost. According to Speedway, it 

is the "second[] largest chain of company-owned-and-operated convenience 

stores in the United States[,] with approximately 2730 locations in [twenty-one] 

states." Speedway owns and operates approximately seventy convenience stores

in New Jersey, which all sell motor fuel. 
3

A-5496-16T1

On February 13, 2017, Speedway filed a complaint in the Law Division 

seeking a declaration that the below-cost sales prohibition violated the due 

process clause of the New Jersey and United States Constitutions, infringed

plaintiff's right to sell goods, and violated the Federal Civil Rights Act, 42 

U.S.C. § 1983, and the New Jersey Civil Rights Act, N.J.S.A. 10:6-2(c). 

Speedway also sought an injunction to prevent defendant, the State of New 

Jersey, from enforcing the provision.

After the trial court granted defendants' motion to dismiss under Rule

4:6-2(e), Speedway filed this appeal. We affirm because the trial court, after 

accepting as true all of Speedway's factual allegations, properly dismissed the

complaint. The Legislature's decision, as expressed in N.J.S.A. 56:6-2(b),

prohibiting the below-cost sale of gasoline is a rational, necessary restraint on

the market, and is in the public interest. 

We also agree with the court that N.J.S.A. 56:6-2(b) is not 

unconstitutionally vague. The challenged terms – "net cost" and "expenses" –

are words of common usage and understanding, particularly for a sophisticated 

business entity such as Speedway. Finally, because the below-cost sales 

provision addresses a specific state interest, it is not unconstitutionally 

overbroad.
4

A-5496-16T1

I.

We begin our opinion with a brief discussion of the 1938 Act, its 

subsequent amendment, and the relevant legislative history. 

A. 1938 Act 

The 1938 Act outlines the conditions for the sale of motor fuel by retail 

dealers. Among other requirements, it mandates that retailers post the per-gallon 

fuel price on each pump, and requires all dispensing equipment to conspicuously 

identify the fuel brand. N.J.S.A. 56:6-2(a) and (g). The fuel price must be 

posted inclusive of all taxes, and cannot employ rebates or concessions that 

would affect the sale of fuel below the posted price. N.J.S.A. 56:6-2(a) and (e). 

Retailers are prohibited from selling gasoline at a price below their net cost of 

the fuel plus all selling expenses, defined in the statute as "all overhead and 

general business expense[s]." N.J.S.A. 56:6-2(b); N.J.S.A. 56:6-1. As noted, 

Speedway challenges only the constitutionality of the below-cost sales 

prohibition, codified in subsection (b). 

 B. Amendments to the 1938 Act and Relevant Legislative History

The Legislature created a "Gasoline Study Commission" (Commission) in 

February 1952 to study New Jersey's gasoline industry, with an emphasis on 

those factors "governing the fixing of prices of gasoline to the public." In 
5

A-5496-16T1

addition, the Commission prepared a report that also "survey[ed] the operation 

of the entire gasoline industry in the [s]tate . . . with a view to[ward] correcting

– if it appeared necessary and desirable – by legislative recommendation[], any

practices which might be found to be injurious to the best interests of all the 

people of New Jersey." (emphasis in original). 

The report also explained that although the Commission's "paramount 

obligation" was to all New Jersey citizens, it stressed that: 

[s]pecial attention has been directed in this examination 

to the plight of those New Jersey citizens – small

businessmen – who own or operate the retail outlets in 

this State. The problem of the retailers and of all other 

phases of the petroleum industry have been carefully 

and fully reviewed both from the viewpoint of serving 

the best interests of the vast army of consumers of a

commodity – gasoline – which has become a necessity 

in modern living and from the viewpoint of recognizing 

the difficult and important position of the small 

businessman in an industry dominated by giants.

The Commission recommended that the 1938 Act be amended to make it 

a misdemeanor if any distributor offered, or any retail dealer accepted, a rebate 

or concession with respect to the distribution of motor fuel. The Commission 

also endorsed that the Legislature invoke the State's police power to protect the 

public welfare by ending unfair practices that curtailed, rather than strengthened 
6

A-5496-16T1

competition, because "[t]he motor fuel business constitutes such an important 

and necessary part in the economy of this State." 

In addition, the Commission considered proposing that any retail 

distributor of fuel be required to sell "at a price determined by the [distributor's]

cost of doing business plus the posted tankwagon price."

1

 The Commission 

explained that company-owned-and-operated retail stations (at the time 

described as "few in number") were typically "integrated corporations" that can 

"exert considerable influences on the posted retail prices" and operate retail 

outlets at a loss if necessary "in sharp contrast to the individual dealer who is 

compelled to carry on his business at a profit in order to survive." Despite 

expressly recognizing the influence company-owned retail dealers had on the 

price of fuel, the Commission declined to recommend amending the 1938 Act 

in this regard because it concluded the below-cost sales prohibition adequately 

addressed the issue and additional legislation would be "superfluous." 

The 1938 Act was amended in 1953, consistent with the Commission's 

recommendations, and retitled the Uniform Motor Fuels Practices Act, N.J.S.A. 

56:6-19 to -32 (1953 Amendments). When passing the new legislation, the 

 

1 Tankwagon price represents "the price charged to the retailer by the 

wholesaler, or the invoice cost of motor fuel to the retailer." 
7

A-5496-16T1

Legislature declared that the "practices of the distribution and sale of motor fuels 

in th[e] State have developed unfair methods of competition in the marketing of 

motor fuels" and that "conditions have . . . impair[ed] . . . the supply of motor 

fuel needed by the general public[,] thereby affecting the general economic 

welfare of the people of th[e] State." N.J.S.A. 56:6-19(a). Although the 1953 

Amendments modified the 1938 Act to prohibit certain trade practices related to 

the distribution of motor fuel that "inten[d] to injure competitors or destroy or 

substantially lessen competition," N.J.S.A. 56:6-22,2the Legislature did not 

amend or change the below-cost sales prohibition to include similar language.

Since 2008, the Legislature considered a number of bills seeking to amend 

the below-cost sales prohibition that would permit a retailer to sell gasoline at a 

price below its net cost plus selling expenses to meet competition, and deem it 

illegal for a dealer to sell at a price below net cost if done with the intent to harm 

or injure competition. See Senate Bill No. 2414 (2008 Session); Senate Bill No.

484 and Assembly Bill No. 2932 (2010 Session); Assembly Bill No. 1567 (2012 

Session); and Assembly Bill No. 1695 (2014 Session). None of these bills were 

 

2

 N.J.S.A. 56:6-22 prohibits retailers from offering "a rebate, concession, 

allowance, discount or benefit . . . in connection with the sale or distribution of 

motor fuel."
8

A-5496-16T1

enacted. Accordingly, the Legislature has not altered the original language of 

N.J.S.A. 56:6-2(b) contained in the 1938 Act. 

On appeal, Speedway raises five points of error, three of which relate to 

its claim that the 1938 Act, and specifically section (b), is unconstitutional. 

First, Speedway contends that the complaint alleged viable due process 

violations because the below-cost sales prohibition unreasonably and arbitrarily 

"deprives it of its property and liberty interests and abrogates its common-law 

right to sell goods," as the provision lacks "an element of intent and a meeting 

competition defense." Second, Speedway argues that the below-cost sales 

prohibition deprives it of due process of law because it is unconstitutionally 

vague as it "leaves retailers guessing at its meaning and application." In further 

support of this argument, Speedway contends that the State is collaterally 

estopped from disputing that section (b) is constitutionally infirm on vagueness 

grounds, because it unsuccessfully litigated the issue before another New Jersey 

court. Third, Speedway maintains that the below-cost sales provision is 

unconstitutionally overbroad. Fourth, Speedway claims that the court erred in

dismissing violations of the New Jersey and Federal Civil Rights Acts. Finally, 

Speedway asserts that the court incorrectly applied Rule 4:6-2(e), failed to issue 

findings of facts and conclusions of law in accordance with Rule 1:7-4 and
9

A-5496-16T1

requests that any remanded proceeding be conducted by a different judge. We 

disagree with all of Speedway's arguments and affirm. 

II.

We start with the standard of review. "On appeal, we engage in a de novo 

review from a trial court's decision to grant or deny a motion to dismiss filed 

pursuant to Rule 4:6-2(e)." Smith v. Datla, 451 N.J. Super. 82, 88 (App. Div. 

2017) (citing Rezem Family Assocs., LP v. Borough of Millstone, 423 N.J. 

Super. 103, 114 (App. Div. 2011)). We accord no deference to the trial court's 

legal conclusions. Rezem Family Assocs., LP, 423 N.J. Super. at 114. When a 

court grants a party's motion to dismiss, "[w]e approach our review of the 

judgment below mindful of the test for determining the adequacy of a pleading: 

whether a cause of action is 'suggested' by the facts." Printing Mart-Morristown 

v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989) (citing Velantzas v. ColgatePalmolive Co., 109 N.J. 189, 192 (1988)). "[T]he Court is not concerned with 

the ability of plaintiffs to prove the allegation contained in the complaint." Ibid.

(citing Somers Constr. Co. v. Bd. of Educ., 198 F.Supp. 732, 734 (D.N.J. 1961)).

III.

Next, and before addressing each of Speedway's points on appeal 

individually, we briefly discuss basic constitutional principles applicable to 
10 A-5496-16T1

Speedway's challenge to the below-cost sales prohibition. Legislative 

enactments carry a "strong presumption in favor of constitutionality." Paul 

Kimball Hospital, Inc. v. Brick Twp. Hospital, Inc., 86 N.J. 429, 447 (1981). 

While the presumption can be rebutted, "it places a heavy burden on the party 

seeking to overturn the [statute]." Hutton Park Gardens v. Town Council, 68 

N.J. 543, 564 (1975). 

"[I]t is up to legislatures, not courts, to decide on the wisdom and utility 

of legislation." Ferguson v. Skrupa, 372 U.S. 726, 729 (1963). Thus, courts 

reviewing the validity of a statute, should "properly defer to legislative judgment 

as to the necessity and reasonableness of a particular measure." United States 

Tr. Co. v. New Jersey, 431 U.S. 1, 22-23 (1977). A court's power to declare a 

statute invalid is to be "delicately exercised," Kimball, 86 N.J. at 447, and 

"unless the statute is clearly repugnant to the Constitution," ibid., or "plainly 

exceeds the constitutional power of the Legislature, a court should not adjudge 

it invalid." Yellow Cab Co. v. State, 126 N.J. Super. 81, 94 (App. Div. 1973). 

When a statute's facial constitutionality is challenged, courts should ask 

"whether the 'mere enactment' of [the] statute offends constitutional rights," as

the "effects on particular participants in an industry are not dispositive." State 

Farm Mut. Auto. Ins. Co. v. State, 124 N.J. 32, 46 (1991) (citing Hodel v. 
11 A-5496-16T1

Virginia Surface Mining & Reclamation Ass'n, Inc., 452 U.S. 264, 295 (1981)). 

"In cases dealing with the validity of price-control statutes . . . , holdings of 

facial unconstitutionality are exceedingly rare." Ibid. Further, if a statute may 

be construed as valid or unconstitutional, the construction "which will uphold 

its validity must be adopted." Ahto v. Weaver, 39 N.J. 418, 428 (1963) (citing 

State v. Hudson Cnty. News Co., 35 N.J. 284, 294 (1961)). The reasonableness 

of a governmental price regulation may be reinforced by "the existence of an 

'emergency'" and a "determination that the industry regulated is 'affected [with]

a public interest.'" Hutton Park Gardens, 68 N.J. at 561-62 (first quoting Como 

Farms, Inc. v. Foran, 6 N.J. Super. 306, 314 (App. Div. 1950); then quoting 

Fried v. Kervick, 34 N.J. 68, 71-74 (1961)).

Finally, when addressing the constitutionality of the 1938 Act, we note 

that we do not write on a blank slate. Indeed, in Fried, 34 N.J. at 83, our Supreme 

Court upheld subsection (e) of N.J.S.A. 56:6-2 against a constitutional challenge 

that the provision violated a retail motor fuel dealer's due process and equal 

protection rights. Subsection (e) prohibits retailers from providing rebat es that 

would permit a consumer to purchase gasoline below the posted price. Similar 

to the below-cost sales prohibition, subsection (e), does not contain an intent to 

injure element. N.J.S.A. 56:6-2(e).
12 A-5496-16T1

In rejecting the retail dealer's constitutional challenge, the Fried court

concluded the Legislature's decision to safeguard the public welfare was neither 

discriminatory nor arbitrary, but rather a reasonable exercise of the State's 

policing power. Fried, 34 N.J. at 83. The Court's holding relied upon the 1952 

New Jersey Gasoline Study Commission, the Annual Report of the Motor Fuel 

Division, and the Report of the United States Senate Select Committee on Small 

Business on Petroleum Marketing Practices in New Jersey (Senate Committee) 

(84th Congress, 2d Session 1956; Report No. 2810). Id. at 79-80. The Senate 

Committee report found that "competitive problems of gasoline retailers were 

most pronounced," in New Jersey. Id. at 80. 

When describing the appropriate use of the state's police power, the Fried

court stated:

[T]he police power of a state is incapable of precise 

definition and limitation. It develops by an empiric 

process and its boundaries expand to include authority 

to regulate an evil associated with any business which 

for the public good justifies the particular measure of 

control. The Legislature is presumed to know the needs 

of the people . . . .

[Id. at 75.]

See also United Stations of New Jersey v. Getty Oil Co., 102 N.J. Super. 459, 

474-76 (Ch. Div. 1968) (rejecting constitutional challenges to subsection (f) of 
13 A-5496-16T1

N.J.S.A. 56:6-2, which bars the use of gaming activities in connection with the 

sale of gasoline).

With these principles in mind, we turn to Speedway's specific 

constitutional challenges.

IV.

 A. Due process violations based on the below-cost sales prohibition's

unreasonable restriction on free trade and competition.

In counts one, two and three of its complaint, Speedway asserts that the 

absence of meeting competition and intent to harm elements in the below-cost 

sales prohibition deprives Speedway of its due process rights. Specifically, 

Speedway asserts that the below-cost sales prohibition "creates a conclusive 

presumption that all below-cost sales are made with an intent or effect of 

destroying competition and bars motor fuel retailers from having any 

opportunity to show they made such sales without any improper intent or unfair 

effect on competition." As a result, Speedway contends the below-cost sales 

prohibition is unreasonable, arbitrary, and discriminatory, as it restrains fair and 

open competition. We disagree. 

It is well established that "a state is free to adopt whatever economic 

policy may reasonably be deemed to promote public welfare, and to enforce that 

policy by legislation adapted to its purpose." Nebbia v. New York, 291 U.S. 
14 A-5496-16T1

502, 537 (1934). Price-control legislation is "subject to the same narrow scope 

of review under principles of substantive due process as are other enactments 

under police power: could the legislative body rationally have concluded that 

the enactment would serve the public interest without arbitrariness or 

discrimination?" Hutton Park Gardens, 68 N.J. at 563-64. 

In Nebbia, the United States Supreme Court upheld the constitutionality 

of the government's regulation of milk prices, and held that statutes that regulate 

prices are constitutional: 

[i]f the law-making body within its sphere of 

government concludes that the conditions or practices 

in an industry make unrestricted competition an 

inadequate safeguard of the consumer's interests, . . . 

statutes passed in an honest effort to correct the 

threatened consequences may not be set aside because 

the regulation adopted fixes prices reasonably deemed 

by the [L]egislature to be fair to those engaged in the 

industry and the consuming public.

[Nebbia, 291 U.S. at 538.]

The goal of the below-cost sales provision, as gleaned from the legislative

history, is to prevent improper trade practices related to the sale of motor 

fuel. Because it applies to all retailers, large and small, and to all sales 

regardless of volume, it is neither discriminatory nor arbitrary. Further, because 

it addresses Speedway's non-fundamental right to sell goods, it need only be 
15 A-5496-16T1

supported by a conceivable rational basis. That basis can be found in the

Commission's recommendation, ultimately followed by the Legislature in its 

enactment of the 1953 Amendments, not to amend or change the below-cost 

sales prohibition to include an intent to injury element, as it did with other 

provisions. See N.J.S.A. 56:6-22. The Legislature clearly determined that the 

below cost sales provision, as originally enacted, was necessary to maintain a 

competitive motor fuel market, particularly in an industry "dominated by 

giants," many of whom maintain a vertically integrated supply chain.

Further, in adopting the 1953 Amendments, the Legislature determined 

that selling gasoline at below cost would cause disorder in the marketplace, 

particularly as to smaller retailers whose survival depends upon operating at a 

profit, and who cannot sustain an extended price war. The Legislature deemed 

a broad below-cost sales provision, without an intent to injure component, or 

meeting the competition defense, was necessary not only to ensure a competitive 

market, but to avoid the adverse financial consequences that would be visited

on small, retail operators from aggressive, uncontrolled pricing practices. See

Fried, 34 N.J. at 79-80. 

We conclude that this considered judgment by our Legislature, made 

nearly seventy years ago was rational and should not be disturbed. Any changes
16 A-5496-16T1

to the below-cost sales prohibition in the manner requested by Speedway are 

best addressed by the Legislature. See Burton v. Sills, 53 N.J. 86, 95 (1968) 

(courts do not sit "as a superlegislature" and "absent a sufficient showing to the 

contrary, it . . . [is] assumed that [a] statute rested 'upon some rational basis 

within the knowledge and experience of the Legislature.'"). In this regard, 

Speedway's citation to the below-cost sales prohibition in thirty-three states' 

statutes which include a intent to injure element or meeting competition defense,

demonstrates that the legislature branch of government is the proper body to 

exercise judgment as to the necessity and reasonableness of such language in 

price control legislation after considering the public welfare of the citizens of a 

particular state, as our Legislature did when passing the 1953 Amendments. 

Speedway's reliance on State v. Packard-Bamberger & Co., Inc., 123 

N.J.L. 180 (1939) and Wilentz v. Crown Laundry Serv. Inc., 116 N.J. Eq. 40 

(1939), is misplaced as neither case supports invalidating price control 

legislation with respect to products affecting the public interest. In 

Packard-Bamberger, the Court determined that a below-cost sales prohibition of 

general merchandise, which included any personal property, was 

unconstitutional. Central to its conclusion that the statute in that case was 

unconstitutional was the court's finding that the statute contained "no limitation 
17 A-5496-16T1

to transactions which involve commodities affected with a public interest." Id.

at 184-85; see also Wilentz, 116 N.J. Eq. at 43 ("[A] few years ago every court 

in the land would have held that a statute abrogating [the] right [to sell goods], 

except in the case of a business or property affected with a public interest, would 

deprive the individual of his property without due process of law and therefore 

be void.") (emphasis added). Thus, as the Packard-Bamberger and Wilentz

courts recognized, a significant distinction exists between price regulations 

involving general commodities, and those affected with the public interest. 

Here, N.J.S.A. 56:6-19(c) expressly recognized that the "distribution and 

sale of motor fuels within this State is hereby declared to be affected with a 

public interest." As noted, while the Legislature has included an intent to harm 

element in other provisions of the statute, see N.J.S.A. 56:6-22, it has deemed it 

reasonably necessary to regulate differently the pricing of retailers' sale of 

gasoline.

Speedway also relies on three cases from Arkansas, Minnesota, and 

Pennsylvania, in which courts invalidated similar statutes for their lack of an 

intent to harm element. See Ports Petroleum Co. v. Tucker, 916 S.W.2d 749 

(Ark. 1996); Twin City Candy & Tobacco Co. v. A. Weisman Co., 149 N.W.2d 

698 (Minn. 1967); Commonwealth v. Zasloff, 13 A.2d 67 (Pa. 1940). We 
18 A-5496-16T1

conclude that the unique legislative history related to the 1938 Act and 1953

Amendments render those cases fundamentally distinguishable.

In Ports Petroleum Co., the Court considered the below-cost sales 

prohibition in the Arkansas Petroleum Trade Practices Act (APTPA). In that 

case, the Court determined the APTPA "prohibit[ed] legitimate and innocent 

competition fostered by below-cost sales," and concluded that "[h]ad the 

[APTPA] included a prohibition against such sales made with predatory intent 

to damage and destroy competition[,] . . . due process impairment would not be 

a concern." Ports Petroleum Co., 916 S.W.2d at 755. In making its

determination, the Court employed a test adopted by the Alabama Supreme 

Court in State v. Mapco Petroleum, Inc., 519 So. 2d 1275, 1284-85(Ala. 1987), 

that "[i]f the act penalizes innocent acts not reasonably related to the problem of 

monopolistic practices or other deceptive, disruptive, or destructive price 

cutting, the act strikes too broadly." Ibid. 

The Ports Petroleum Co. court, however, failed to discuss Arkansas's 

legislative history that led to the enactment of the APTPA. Similarly, the Twin 

City Candy & Tobacco Co. and Zasloff courts did not consider the legislative 

history underpinning the Minnesota and Pennsylvania statutes at issue. As we 

have previously detailed, New Jersey's unique and lengthy legislative history 
19 A-5496-16T1

related to the 1953 Amendments confirms the necessity of the below-cost sales 

provision to ensure a competitive market, while avoiding harmful financial 

consequences resulting from uncontrolled pricing practices. 

 B. Due process violations based on the vague and overbroad nature of the 

below-cost sales prohibition.

In count four of its complaint, Speedway asserts that the terms "net cost" 

and "selling expenses" in N.J.S.A. 56:6-2(b) are unconstitutionally vague, and

the State is collaterally estopped from disputing the issue. Further, in the fifth 

count of its complaint, Speedway argues the below-cost sales prohibition is 

overbroad because it "restrain[s] constitutionally-protected fair competition." 

Again, we disagree.

"A law is void if it is so vague that persons 'of common intelligence must 

necessarily guess at its meaning and differ as to its application.'" Twp. Of 

Pennsauken v. Schad, 160 N.J. 156, 181 (1999) (quoting Town Tobacconist v. 

Kimmelman, 94 N.J. 85, 118 (1983)). "[T]he requirement of statutory clarity is 

essentially a due process concept grounded in notions of fair play." In re N.N., 

146 N.J. 112, 126 (1996) (quoting State v. Cameron, 100 N.J. 586, 591 (1985)). 

Vague laws are constitutionally banned in order to "invalidate regulatory 

enactments that fail to provide adequate notice of their scope and sufficient 

guidance for their application." Cameron, 100 N.J. at 591. "The determination 
20 A-5496-16T1

of vagueness must be made against the contextual background of the particular 

law and with a firm understanding of its purpose." Ibid. "Absent any explicit

indications of special meanings, the words used in a statute carry their ordinary 

and well-understood meanings." State v, Afanador, 134 N.J. 162, 171 (1993). 

"[D]ifferent levels of 'definitional clarity' are required depending on the 

type of statute under scrutiny." Heyert v. Taddese, 431 N.J. Super. 388, 424 

(App. Div. 2013) (quoting Commc'ns. Workers of Am. v. State, Dep't of 

Treasury, 421 N.J. Super. 75, 104 (Law Div. 2011)). Economic legislation "is 

subject to a less strict vagueness test because its subject matter is often more 

narrow, and because businesses, which face economic demands to plan behavior 

carefully, can be expected to consult relevant legislation in advance of action." 

Cameron, 100 N.J. at 592 (quoting Hoffman Estates v. Flipside, Hoffman 

Estates, 455 U.S. 489, 498 (1982)). 

Further, a "regulated enterprise may have the ability to clarify the meaning 

of the regulation by its own inquiry, or by resort to an administrative process." 

In re Farmers' Mut. Fire Assurance Ass'n of New Jersey, 256 N.J. Super. 607, 

619 (App. Div. 1992) (quoting Village of Hoffman Estates, 455 U.S. at 498). 

Thus, "[a] commercial regulatory statute can be held unconstitutionally vague 

only if it is 'substantially incomprehensible.'" Ibid. (alteration in original) 
21 A-5496-16T1

(quoting In re Loans of N.J. Property Liability Ins. Guar. Ass'n, 124 N.J. 69, 78

(1991)).

We first address Speedway's claim that the State is collaterally estopped 

from defending against its vagueness challenge due to the court's ruling in Neeld 

v. Automotive Products Credit Ass'n, 21 N.J. Super. 159 (Dist. Ct. 1952.) 

Collateral estoppel "bars relitigation of any issue which was actually determined 

in a prior action, generally between the same parties, involving a different claim 

or cause of action." Ziegelheim v. Apollo, 128 N.J. 250, 265 (1992) (quoting 

State v. Gonzalez, 75 N.J. 181, 186 (1977)). A party asserting collateral estoppel 

must demonstrate:

(1) the issue to be precluded is identical to the issue 

decided in the prior proceeding; (2) the issue was 

actually litigated in the prior proceeding; (3) the court 

in the prior proceeding issued a final judgment on the 

merits; (4) the determination of the issue was essential 

to the prior judgment; and (5) the party against whom 

the doctrine is asserted was a party to or in privity with 

a party to the earlier proceeding.

[First Union Nat. Bank v. Penn Salem Marina, Inc., 190 

N.J. 342, 352 (2007) (citing Hennessy v. Winslow 

Twp., 183 N.J. 593, 599 (2005)).]

However, "[e]ven where these requirements are met, the doctrine, which has its 

roots in equity, will not be applied when it is unfair to do so." Pace v. 

Kuchinsky, 347 N.J. Super. 202, 215 (App. Div. 2002). 
22 A-5496-16T1

 In Neeld, the court addressed whether N.J.S.A. 56:6-2(b) was 

"unenforceable for uncertainty." The court noted that as a district court, it was

an "inferior court of limited jurisdiction," Neeld, 21 N.J. Super. at 161, and 

acknowledged that "the better practice is for the inferior court to assume that an 

act is constitutional until it has been passed upon by the Appellate Court." Ibid.

(quoting Legg v. County of Passaic, 122 N.J.L. 100, 104 (Sup. Ct. 1939)). Thus, 

while the court found N.J.S.A. 56:6-2(b) unenforceable due to its uncertainty, it 

did not determine the below-cost sales prohibition unconstitutional. Rather, the 

court stated, "[a]lthough [it is] inclined to think it invalid, it cannot be said to be 

clear beyond a reasonable doubt that the prohibition against selling below cost, 

without more, is unconstitutional." Id. 163. 

Further, the 1952 Neeld decision was never appealed, nor has the 

Legislature amended N.J.S.A. 56:6-2(b), despite being presented with the 

opportunity on at least four occasions. Finally, unlike the Neeld court, we have 

undertaken a thorough review of the legislative history and constitutionality of 

the below-cost sales probation, and have conclusively determined it passes 

rational basis scrutiny. Under these circumstances, we conclude it would be

fundamentally unfair to apply the equitable doctrine of collateral estoppel here. 

Winters v. North Hudson Regional Fire and Rescue, 212 N.J. 67, 93 (2012) 
23 A-5496-16T1

("Collateral estoppel is an equitable doctrine and should be invoked only to 

promote equity."); Hennessey, 368 N.J. Super. at 452 ("An equitable doctrine, 

collateral estoppel is not applied if it is unfair to do so.").

Turning to the merits of Speedway's vagueness argument, we reject 

Speedway's claim that persons of ordinary intelligence would be unable to 

understand the meaning of the terms used in N.J.S.A. 56:6-2(b). While we 

acknowledge that the phrase "net cost" is not defined, it is a commonly used 

business term used in retail settings. Further, upon an examination of the 

ordinary, well-understood definitions of "net" and "cost,"3 we conclude a person 

of ordinary intelligence can ascertain the definition of "net cost." 

We reach a similar conclusion with respect to the term "selling expense" 

which is defined in N.J.S.A. 56:6-1 as "all overhead and general business 

expense[s]." As there is no "explicit indication[] of [a] special meaning[], the 

words used in [the] statute carry their ordinary and well-understood meanings." 

Afanador, 134 N.J. at 171. The well-understood definition of "overhead," 

another commonly understood business term, is "business expenses (such as 

 

3

"Net" is defined as "remaining after the deduction of all charges, outlay, or 

loss," Merriam-Webster, https://www.merriam-webster.com/dictionary/net (last 

visited Apr. 8, 2019), and "cost" is defined as "the amount or equivalent paid or 

charged for something." Merriam-Webster, https://www.merriam-webster.com/

dictionary/cost (last visited Apr. 8, 2019).
24 A-5496-16T1

rent, insurance, or heating) not chargeable to a particular part of the work or 

product." Merriam-Webster, https://www.merriam-webster.com/dictionary/

overhead (last visited Apr. 8, 2019).

With respect to Speedway's overbreadth claim, we note that in 

determining if a statute is overbroad, "the question is whether the enactment 

reaches a 'substantial amount of constitutionally protected conduct.'" State v. 

Lee, 96 N.J. 156, 164-65 (1984). A court must ask "whether the reach of the 

law extends too far in fulfilling the State's interest." Id. at 165. Here, as 

discussed at pp. 14-16, the Legislature had a legitimate interest in regulating the 

pricing for all motor vehicle sales, regardless of intent. Thus, we conclude 

N.J.S.A. 56:6-2(b) is not overbroad.

V.

Based on our conclusion that the below-cost sales provision does not 

represent an unconstitutional restraint on trade nor is otherwise impermissibly

vague and overbroad under the Federal and New Jersey Constitutions, we reject 

Speedway's claim that the court erred in dismissing the sixth count of the 

complaint asserting violations of the Federal Civil Rights Act and New Jersey 

Civil Rights Act. Without an underlying constitutional violation, there exists no 

legal basis for those claims. See Rezem Family Assocs., LP v. Borough of 
25 A-5496-16T1

Millstone, 423 N.J. Super. 103, 114-115 (App. Div. 2011) (stating that civil 

rights laws "'[are] not [themselves] a source of substantive rights,' but merely 

provide[] 'a method of vindicating federal [or state] rights elsewhere 

conferred.'"); 42 U.S.C. § 1983; N.J.S.A. 10:6-2.

VI.

Finally, we find without merit Speedway's claims that the court 

improperly applied Rule 4:6-2(e) and that its factual findings and legal 

conclusions failed to satisfy Rule 1:7-4. In an oral decision, the court recited 

the legal standard applicable with respect to Rule 4:6-2(e) dismissal motions, 

followed by an explanation of the rational basis review to be applied to 

Speedway's constitutional claims, and a summary of each party's arguments. 

Then, the court, accepting as true Speedway's factual allegations, determined 

that they were "palpably insufficient to support [the] claim[s]." Finally, the 

court noted the presumption of constitutionality of statutes, particularly 

economic legislation, and concluded that Speedway failed to rebut this 

presumption. We are satisfied that the court properly applied Rule 4:6-2(e) and 

complied with its obligation under Rule 1:7-4. Printing Mart-Morristown, 116 

N.J. at 746 ("In reviewing a complaint dismissed under Rule 4:6-2(e) our inquiry 

is limited to examining the legal sufficiency of the facts alleged on the face of 
26 A-5496-16T1

the complaint."); Avelino-Catabran v. Catabran, 445 N.J. Super. 574, 594 (App. 

Div. 2016) ("When a trial court issues reasons for its decision, it 'must state 

clearly [its] factual findings and correlate them with relevant legal conclusions, 

so that parties and the appellate courts [are] informed of the rationale underlying 

th[ose] conclusion[s].'") 

Because we affirm the court's order dismissing the complaint, we need not 

address Speedway's request that the matter be assigned to a different judge on 

remand. We note, however, there is no support in the record for the request.

Affirmed.