PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

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No. 19-2961

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NEW JERSEY COALITION OF AUTOMOTIVE

RETAILERS, INC.,

Appellant

v.

MAZDA MOTOR OF AMERICA, INC.

______________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civ. No. 3-18-cv-14563)

District Judge: Honorable Brian R. Martinotti

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Argued March 24, 2020

BEFORE: JORDAN, RESTREPO and GREENBERG, 

Circuit Judges.

(Opinion Filed: April 28, 2020)

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2

Daniel J. Kluska (Argued)

Peter L. Schenke

Wilenz Goldman & Spitzer

90 Woodbridge Center Drive

Suite 900, Box 10

Woodbridge, N.J. 07095

Counsel for Appellant

Donald B. Verrilli, Jr.

Adele El-Khouri (Argued)

Munger Tolles & Olson

1155 F Street, N.W., 7

th Floor

Washington, DC 20004

Counsel for Amicus-Curiae National Automobile

Dealers Association

Jessica L. Ellsworth (Argued)

Matthew J. Higgins

Hogan Lovells US

555 Thirteenth Street, N.W.

Columbia Square

Washington, DC 20004

Counsel for Appellee

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OPINION

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GREENBERG, Circuit Judge.
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I. INTRODUCTION

This matter comes on before this Court on the appeal of 

Plaintiff-Appellant New Jersey Coalition of Automotive 

Retailers (“the Coalition”), seeking review of the District 

Court’s dismissal of its case under the New Jersey Franchise 

Practices Act (“NJFPA”) against Defendant-Appellee Mazda 

Motor of America for lack of standing in an order entered on

July 30, 2019. For the reasons stated below, we find that the 

District Court construed the complaint too narrowly in 

concluding that the Coalition lacked association standing, so we 

will reverse the Court’s order of July 30, 2019, and remand the

case to the District Court for further proceedings.

II. BACKGROUND

For the purposes of this opinion, we construe all facts 

alleged in the complaint as true, and in the light most favorable 

to the Coalition. See N. Jersey Brain & Spine Ctr. v. Aetna,

Inc., 801 F.3d 369, 371 (3d Cir. 2015). The Coalition is a trade 

association whose members consist of franchised new car 

dealerships in New Jersey, among whom sixteen members are 

Mazda dealers. According to the complaint, Mazda initiated an 

incentive program for its franchised dealers called the Mazda

Brand Experience Program 2.0 (“MBEP”), which provides 

incentives, in the form of per-vehicle discounts or rebates on the

dealers’ purchases of vehiclesfrom Mazda, to dealers who make 

certain capital investments in their physical facilities that 

highlight their sale of Mazda vehicles, or in some instances,

dedicate their dealerships exclusively to the sale of Mazda 

vehicles.
4

The incentives come in different tiers, with the highest

tier available to dealers who have exclusive Mazda facilities and

a dedicated, exclusive Mazda general manager. Mazda gives

lower incentives to dealers who do not employ an exclusive

Mazda general manager and/or dealers whose dedicated 

facilities do not conform to all appearance requirements as 

defined by Mazda. But Mazda dealers also earn incentives if

they meet customer experience metrics. Mazda dealers who do 

not have a dedicated facility, i.e., those dealers who sell other 

brands of vehicles as well as Mazdas, so-called “dual” dealers, 

do not receive any incentives for brand commitment.

Although the complaint did not set forth these

allegations, the District Court also relied on certain facts

contained in declarations the parties made in support and in 

opposition to the motion to dismiss. According to the Court, at 

the time of the filing of the complaint only three of the sixteen 

Mazda dealers in the Coalition qualified for the highest tier of 

incentives that we describe above, although eight others

qualified for some tier of incentives. N.J. Coal. of Auto.

Retailers v. Mazda Motor of Am., No. 18-14563, 2019 WL 

3423572, at *7 (D.N.J. July 30, 2019) (“NJCOA”). The 

complaint alleges that the MBEP creates unfair competitive 

advantages for dealers who qualify for incentives under the 

MBEP at the expense of those dealers who do not, and even 

among incentivized dealers through different tiers of incentives, 

in violation of the NJFPA. The Coalition seeks to enjoin the 

implementation of the MBEP and to obtain declaratory relief.

 

III. DISCUSSION
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The District Court had jurisdiction pursuant to 28 U.S.C. 

§ 1332, and we have appellate jurisdiction pursuant to 28 U.S.C. 

§ 1291. We review the District Court’s dismissal based on lack 

of standing de novo. Aetna, 801 F.3d at 371.

In dismissing the case, the District Court relied on the 

three-prong test that the Supreme Court set forth in Hunt v. 

Wash. State Apple Advertising Comm’n, 432 U.S. 333, 343, 97 

S.Ct. 2434, 2441 (1977), to find that the Coalition lacked 

association standing to bring its lawsuit on behalf of its 

members. See NJCOA, 2019 WL 3423572, at *3-8. “[A]n 

association has standing to bring suit on behalf of its members 

when: (a) its members would otherwise have standing to sue in 

their own right; (b) the interests it seeks to protect are germane

to the organization’s purpose; and (c) neither the claim asserted 

nor the relief requested requires the participation of individual 

members in the lawsuit.” Hunt, 432 U.S. at 343, 97 S.Ct. at 

2441. The Court held that the Coalition’s complaint satisfied

the first prong but failed the second prong of the Hunt criteria, 

thus the Court did not reach the third prong. NJCOA, 2019 WL 

3423572, at *5-8.

With regard to the first prong, the District Court held, 

and we agree, that it is obvious on the face of the complaint at 

least some of the Mazda dealers in the Coalition suffer

competitive harm due to implementation of the MBEP—the 

program itself expressly discriminates among Mazda dealers. 

See Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 2211-12

(1975); (noting that an association “must allege that its

members, or any one of them,” are harmed); Hosp. Council of 

W. Pa. v, City of Pittsburgh, 949 F.2d 83, 87 (3d Cir. 1991). 

When addressing the second prong, the Court held that because 

eleven of the sixteen Mazda dealers would lose the incentives 
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they currently enjoy under the MBEP, the Coalition’s lawsuit, 

which seeks to enjoin implementation of the MBEP, is in 

conflict with the interests of those dealers, who make up the 

majority of the Mazda dealers that the Coalition represents. See

NJCOA, 2019 WL 3423572, at *6. Under the Court’s rationale, 

given that only five out of the sixteen Mazda dealers would 

benefit from the lawsuit, the Coalition cannot possibly be

protecting the interests of its members. See Contractors Ass’n

of E. Pennsylvania, Inc. v. City of Philadelphia, 945 F.2d 1260,

1266 (3d Cir. 1991) (stating that an association does not have

standing to bring a lawsuit that is “contrary to the interests of a

majority of [its] members”).

We disagree. The District Court impermissibly limited 

the Coalition’s lawsuit to a single theory of harm, one that 

arguably the complaint does not even raise. Essentially, in the 

Court’s view, this case is about the haves versus the have nots. 

Because some of the Mazda dealers have been shut out of the

MBEP altogether, this lawsuit is about vindicating their rights 

and bringing competitive balance back between them and the 

other dealers who do benefit from the MBEP. Though we

understand why the Court viewed the complaint asit did, we are

satisfied that its reading was too narrow. “[W]hen standing is 

challenged on the basis of the pleadings . . . we must . . . 

construe the complaint in favor of the complaining party.” 

Hosp. Council, 949 F.2d at 86 (internal quotation marks and

citation omitted).

1

1 We point out that the information on which the District Court 

relied in dismissing the complaint regarding the three dealers in 

the highest tier and the eleven MBEP participants, came directly 

from Mazda in a declaration by one of its own regional 

managers. See App. 52. 
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According to the District Court, only three of the Mazda 

dealers enjoy the highest tier of incentives. We see no reason to

dismiss the possibility that the eight dealers who enjoy lower 

tiers of incentives would forego such incentives in order to

prevent the creation of three “super” dealers who clearly have a 

competitive advantage over all other Mazda dealers. In fact, the 

very declarations on which the Court relied in granting the 

motion to dismiss suggest this view of the complaint. Indeed,

one of the Mazda dealers declared that it qualifies for a lower

tier of incentives under the MBEP, but nevertheless supportsthe 

lawsuit. See App. 89.

We think it is also plausible that many of the Mazda 

dealers regard the capital investment required to participate fully

in the MBEP as financially unjustified, but nevertheless feel

pressured to participate due to the competitive disadvantages 

artificially created by the MBEP for non-participation or partial

participation. See compl. ¶ 16 (App. 32). As Mazda points out

in its brief, one of the dealers supporting the lawsuit had done 

just that after the District Court dismissed the case. Appellee’s 

Br. 8 n.1. Although Mazda highlights five dealers who had 

submitted declarations in opposition to this lawsuit, five does

not constitute a majority of the sixteen Mazda dealers. 

Construing the complaint most favorably to the Coalition, we 

see little support for the Court’s conclusion that the Coalition is 

acting in conflict to the interests of its members. See Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 1965

(2007) (“Asking for plausible grounds to infer [a claim] does 

not impose a probability requirement at the pleading stage . . . . 

[A] well-pleaded complaint may proceed even if it strikes a 

savvy judge that actual proof of those facts is improbable, and 

that a recovery is very remote and unlikely.”) (citation and 

internal quotation marks omitted).
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At oral argument before us, Mazda argued that the 

conflict of interest issue is a factual dispute, and the District 

Court made its ruling because the Coalition did not rebut 

Mazda’s evidence that eleven of the sixteen Mazda dealers 

enjoy some form of benefit from the MBEP. That argument 

turns the analysis at the pleading stage on its head. We construe 

the complaint in the light most favorable to the Coalition, and it 

is Mazda’s burden to present facts to attack the basis of 

jurisdiction pled in the complaint, which Mazda failed to do. 

See Davis v. Wells Fargo, 824 F.3d 333, 349 (3d Cir. 2016) 

(“Rule 12(b)(1) allows a defendant to attack the allegations in 

the complaint and submit contrary evidence in its effort to show 

that the court lacks jurisdiction.”). Instead, it submitted 

affidavits from only five dealers clearly showing opposition to 

the lawsuit, while asking the District Court to infer, from those 

affidavits, that six other dealers would have opposed the lawsuit 

as well, which the District Court unfortunately did. That is not 

construing the complaint in the light most favorable to the 

complainant.

2

2

In analyzing the conflict of interest issue, the District Court 

held that “in calculating the total membership of NJ CAR for 

the purpose of determining whether the litigation runs contrary 

to the interests of the majority, it will consider the total relevant

membership to include only Mazda dealer members. 

Accordingly, NJ CAR members that do not sell Mazda vehicles 

are not included in the calculation.” NJCOA, 2019 WL 

3423572, at *7 n.7. We question the validity of that holding. 

After all, even if fifteen out of the sixteen Mazda dealers might 

oppose a lawsuit of this kind due to the significant investment 

they have already made as MBEP participants, there can be no 

question that the last remaining Mazda dealer holding out would 
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In view of our analysis, we will reverse the Court’s July 

30, 2019 order dismissing the case, and remand the case to that

Court for further proceedings.3

have standing to bring a lawsuit against Mazda on its own, and 

the success of that lawsuit would harm the other fifteen dealers 

regardless of their opposition. The germaneness prong of the 

Hunt test, therefore, is primarily concerned with the 

association’s ability to zealously advocate the claims of that one

dealer. 432 U.S. at 343, 97 S.Ct. at 2441 (“[W]hether an 

association has standing to invoke the court’s remedial powers 

on behalf of its members depends in substantial measure on . . . 

[whether] the remedy, if granted, will inure to the benefit of 

those members of the association actually injured.” (quoting 

Warth, 422 U.S. at 515, 95 S.Ct. at 2213)). If the other nonMazda members, numbered in the hundreds, have an 

exceedingly strong interest in the success of such a lawsuit 

because, for example, they wish to prevent other manufacturers 

from implementing similar coercive programs against them, 

there should be little concern over the Coalition’s capacity to be 

a zealous advocate of that one member’s claims, even if the 

non-Mazda members may not have standing to bring a lawsuit 

on their own. In that scenario, the opposition of the fifteen

Mazda dealers would be immaterial, as they would constitute a 

tiny minority of the membership. However, we need not 

squarely address the District Court’s holding here, as it erred 

even if we accept its holding as correct.

3 We stress that in so ruling, we express no opinion as to the 

merits of this case. We limit our holding to the conclusion that 

the Coalition has association standing to bring this case. In fact, 

our opinion should not be understood as implying that the 
10

complaint sufficiently has stated a valid claimunder the NJFPA. 

On remand, the District Court is free to consider any other 

arguments for dismissal that Mazda advances.