NEW YORK — The law firm representing dealers in lawsuits against TrueCar and Carfax filed suit in federal court last Wednesday against Autotrader on behalf of a dealer group that operates two franchised dealerships and a used-car lot in the Bronx and Westchester counties. The complaint alleges that the lead-generation site inflated page views the group’s vehicle listings received by 50% to 100% ore more over a five-year period.
Filed in the U.S. District Court Eastern District of New York on behalf of B&Z Auto Enterprises, which operates Riverdale Chrysler Jeep and Eastchester Chrysler Jeep Dodge, the complaint charges Autotrader with engaging in fraud, false advertising and deceptive business practices. The dealer group is seeking at least $1.487 million in direct damages and treble damages under the RICO Act as well as punitive damages under New York State law.
According to the complaint, B&Z Auto enlisted Autotrader’s services between July 2010 and September 2015 and paid in excess of $1.4 million in fees. The lawsuit alleges that B&Z Auto paid that amount under the pretense of a different level of service than it was actually receiving.
“Autotrader’s representatives advertise in sales presentations to dealer principals that their website provides a certain number of page views of a dealer’s vehicles offered for sale,” said Leonard Bellavia, a senior partner with the law firm Bellavia Blatt & Crosssett. “Every month thereafter, Autotrader provides each dealer a dealer scorecard and other reports that state the number of times the dealer’s vehicles were viewed … There is evidence that the number of page views that Autotrader claimed B&Z Auto was receiving was inflated by 50% to 100% or more on an ongoing basis throughout their five year relationship.
“In addition, we have reason to believe that Autotrader’s over reporting of page views occurred nationwide, and was based on an improperly programmed software counting system and an automated data reporting program,” Bellavia added, noting that his firm plans to file a class action suit against AutoTrader on behalf of all new and used car dealers who do business with the online marketplace.
A spokesperson for Autotrader issued the following statement to F&I and Showroom: “At Autotrader, we’re committed to growing our clients’ businesses by connecting car buyers, sellers and owners and creating exceptional experiences. The allegations in this lawsuit are meritless, and we intend to defend ourselves vigorously.”
This isn’t the first time Bellavia’s firm has targeted third-party sites on behalf of dealers. In May 2013, Bellavia, Blatt & Crosssett filed an antitrust suit against Carfax on behalf of 121 dealers. The complaint, which now counts more than 700 plaintiffs and seeks $350 million in damages, is currently in discovery. The complaint charges Carfax with impairing competition through its exclusive alliances with Autotrader, Cars.com and a majority of OEMs and their certified pre-owned programs.
This past March, the New York-based law firm filed a mass action lawsuit against TureCar on behalf of 117 former subscribing dealers as well as nonsubscribers. The complaint now counts 200 dealer plaintiffs. The firm filed a second lawsuit in July against the vehicle-shopping site on behalf of 100 subscribing dealers. They are seeking a court order requiring TrueCar, which has called both suits “meritless,” to openly disclose in its advertising and on its guaranteed savings certificates the fees it charges dealers and how they may impact the price of vehicles.
“My law firm has a low tolerance level for third-party vendors who operate more as parasites than dealer-partners. These vendors have very little skin in the game but are happy to inject themselves into my dealer clients' businesses and profits by trying to be relevant,” Bellavia told F&I and Showroom. “I have engineered the mass action model so that these lead-generation and vehicle-information sites don't underestimate the collective power of auto dealers. These initiatives, whether against Carfax, TrueCar and now AutoTrader, send a clear message to either deal fairly with my clients or face insolvency.”