The dealer lawsuit accusing vehicle-shopping site TrueCar Inc. of false advertising wouldn't have happened a year ago.
A unanimous decision by the U.S. Supreme Court on March 25, 2014, opened the door for dealers representing 117 new-car franchises to file the suit last week.
That decision, in what's become known as the Lexmark case, determined that standing to bring a false advertising claim under the federal Lanham Act is not limited to direct competitors.
With that decision, in a dispute revolving around toner cartridges, legal experts expected a surge in Lanham Act lawsuits. The TrueCar case is now one of those. Lexmark meant car dealers, even though they don't compete directly with TrueCar, could seek relief if they suffer damage as a result of TrueCar advertising that is false, said Leonard Bellavia, the Mineola, N.Y., lawyer who filed the lawsuit.
The complaint argues that the dealers, who are not current users of TrueCar, have lost customers to TrueCar's "false 'no-haggle' claims," "bait-and-switch" advertising, "false transparency claims" and other false claims. It seeks more than $250 million.
TrueCar's response? Hogwash.