TrueCar blasts dealers' suit over advertising claims as 'meritless'

TrueCar Inc. is blasting a lawsuit filed against it by dealers as “meritless.”

In a detailed statement released late Tuesday, vehicle-shopping site TrueCar says it has “high confidence that we are compliant with all laws applicable to our business, including those referenced in this litigation.”

The lawsuit, filed Monday in U.S. District Court in New York by dealers representing 117 new-car franchises, claimed they are victims of false advertising and unfair competition. Dealer lawyer Leonard Bellavia filed the suit on behalf of the dealers, who are not current users of TrueCar. Bellavia said his clients are losing sales because of TrueCar’s advertising.

TrueCar’s statement references Bellavia’s law firm and says “it appears that these dealers responded to a website sponsored by that law firm encouraging dealers to join in bringing claims against TrueCar.” Bellavia’s law firm does have a website with a section asking dealers to join the lawsuit.

No consumers in the suit

TrueCar said it has invested “substantial resources” in its compliance efforts and has “proactively engaged in dialogues about our business model with various regulatory authorities and dealer associations across the country.”

In its statement, TrueCar noted that no consumers are parties to the lawsuit.

“Consumers come to TrueCar because our platform provides real-time, upfront pricing information, and our certified dealers are committed to a better consumer experience,” the company’s statement said. “Indeed, we believe our compelling consumer value proposition is a central motivating factor behind the lawsuit.”

TrueCar says it will defend the lawsuit and its business practices “vigorously, and we expect to be fully vindicated.”