TrueCar Inc. appears to be ending a tough 2015 with some gifts under the tree: Four of the five lawsuits filed against it this year have been dismissed or withdrawn.
But TrueCar can't break out the eggnog yet. One of the dismissed suits is likely to be amended and refiled. And the one unresolved suit could gain strength as it heads into 2016.
But the wins so far have TrueCar feeling vindicated after a year of punishing headlines, a slumping stock price, and dealer and executive defections.
"At the end of the day, we invest a lot of time, money and effort into our regulatory compliance and compliance with all laws," Johnny Stephenson, TrueCar's chief risk officer, told Automotive News. "Obviously it is of great importance to us because we are deeply committed to operating lawfully. Winning these lawsuits is a reflection of that."
This year's legal barrage against TrueCar began in March and continued through summer.
Among the suits was a federal case filed in May on behalf of TrueCar's shareholders who lost money on the company's stock after the company's 2014 initial public offering. The suit alleged that the company misled investors about how it does business. That suit was dismissed on Dec. 9. A state suit in California that made similar charges on behalf of shareholders was withdrawn weeks after it was filed in August.
In July, a suit was filed in Los Angeles on behalf of dealers in TrueCar's network claiming deceptive business practices because TrueCar's advertising doesn't disclose the fees that dealers pay TrueCar for every transaction. After TrueCar terminated contracts with dealers that were suing, lawyers for the plaintiffs withdrew the suit.
But Stephenson and his team could be kept busy in 2016 with two separate lawsuits.
One is the suit brought by the California New Car Dealers Association in May, accusing TrueCar of acting as an unregulated and unlicensed broker. A judge dismissed the suit on Dec. 7 but gave the association 20 days to amend its claim and refile.
Stephenson said the judge's ruling "fell on the side of TrueCar." But Brian Maas, president of the dealers association, sees it differently.
"On the merits of the case, we remain absolutely convinced that TrueCar is acting as a dealer and a broker," Maas told Automotive News. The judge dismissed the suit on "narrow" procedural grounds, he said, and the dealers association will refile by year end. "We're going to press on," Maas promised.