Opinions of the United
1998 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


1-22-1998

Liberty v. Ford Mtr Co
Precedential or Non-Precedential:

Docket 96-5762




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Filed January 22, 1998

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

Nos. 96-5762, 97-5189 and 97-5190

LIBERTY LINCOLN-MERCURY

v.

FORD MOTOR COMPANY,
       Appellant in No. 96-5762

LIBERTY LINCOLN-MERCURY, INC.

v.

FORD MOTOR COMPANY,
       Appellant in No. 97-5189

LIBERTY LINCOLN-MERCURY, INC.,
       Appellant in No. 97-5190

v.

FORD MOTOR COMPANY

On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 95-3121)

Argued December 11, 1997

BEFORE: GREENBERG, ROTH, and SEITZ,
Circuit Judges.

(Filed: January 22, 1998)
       Dennis R. LaFiura (argued)
       Pitney, Hardin, Kipp & Szuch
       P.O. Box 1945
       Morristown, NJ 07932-0950

       Michael R. Feagley
       Mayer, Brown & Platt
       190 S. LaSalle Street
       Chicago, IL 60603-3441

       John J. Sullivan
       Robert L. Bronston
       Mayer, Brown & Platt
       2000 Pennsylvania Avenue, N.W.
       Washington, D.C. 20006-1882

        Attorneys for Appellant and Cross
        Appellee Ford Motor Company

       Norman I. Klein
       Goldman, Carlett
       Garrison & Klein
       1135 Clifton Ave.,
       Clifton, NJ 07013

       Eric L. Chase (argued)
       Genevieve K. LaRobardier
       Bressler, Amery & Ross, P.C.
       P.O. Box 1980
       Morristown, NJ 07962

        Attorneys for Appellee and Cross
        Appellant Liberty Lincoln-Mercury,
        Inc.

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

Defendant Ford Motor Company ("Ford") appeals from an
order of the district court dated March 13, 1996, entered
March 15, 1996, granting partial summary judgment in

                                2
favor of plaintiff Liberty Lincoln-Mercury, Inc. ("Liberty") on
the grounds that Ford's assessment of a dealer-parity
surcharge ("DPS") violated the New Jersey Franchise
Practices Act, N.J. Stat. Ann. S 56:10-15(a) (West Supp.
1997). Ford also appeals from the district court's order of
September 19, 1996, entered September 23, 1996,
amending the March 13 order nunc pro tunc to preclude
Ford from altering certain practices that were in effect as of
the date of the March order. Liberty cross appeals from the
district court's March 13, 1996 dismissal of its claim
alleging illegal price discrimination under the Robinson-
Patman Act, 15 U.S.C. S 13(a), and from the portions of the
district court's February 26, 1997 final order entered
February 27, 1997, rejecting Liberty's claim for damages
incurred before December 1991, denying recovery of certain
fees, and awarding prejudgment interest at the rates set
forth in New Jersey Court Rule 4:42-11.

The district court had jurisdiction over Liberty's state law
claim pursuant to 28 U.S.C. S 1332 based on diversity of
citizenship and the requisite amount in controversy, and
over Liberty's federal law claim under 28 U.S.C. S 1331.
This court's jurisdiction rests on 28 U.S.C. S 1291 based on
the district court's entry of the final order dated February
26, 1997, and entered February 27, 1997.1 For the reasons
that follow, we will reverse the district court's September
19, 1996 order, and will vacate the district court's order
awarding attorneys' fees and remand that issue for
reconsideration. We otherwise will affirm.
_________________________________________________________________

1. Ford initially filed an interlocutory appeal from the district court's
September 19, 1996 order pursuant to 28 U.S.C. S 1292(a)(1), which
provides that "the courts of appeals shall have jurisdiction of appeals
from . . . [i]nterlocutory orders of the district courts . . . granting .
. .
injunctions . . . ." By order of this court the interlocutory appeal,
which
was docketed as number 96-5762, was consolidated with Ford's appeal
in number 97-5189 and Liberty's cross appeal in number 97-5190 from
the district court's final order. The district court on April 25, 1997,
entered a supplemental final order dated April 22, 1997, which is not at
issue in this appeal.

                               3
II. FACTUAL AND PROCEDURAL HISTORY

On March 11, 1976, Ford and Liberty entered into a
franchise agreement by executing Ford's standard "Lincoln
and Mercury Sales and Service Agreements." Pursuant to
the agreement, Ford, a motor vehicle manufacturer and
franchisor, sells vehicles at wholesale prices to Liberty,
which in turn sells them to consumers at retail prices. The
retail vehicle sales are accompanied by a warranty issued
by Ford to the consumer, guaranteeing that Ford will
replace certain systems or parts in the vehicle free of
charge. See app. at 38; 173.

Under the standard franchise agreement, a franchisee-
dealer such as Liberty must perform warranty repairs on
any vehicle brought to its dealership regardless of where
the owner purchased the vehicle. Ford then must
reimburse the dealer for the parts and labor associated
with the warranty repairs. From 1976 until 1991, Ford
reimbursed Liberty for parts used in warranty repairs
pursuant to a standard nationwide reimbursement formula.
Under the relevant version of that formula, Ford
reimbursed dealers at 30-40% above their cost for parts
depending on the model of the vehicle repaired. See id. at
115.

On December 12, 1991, Liberty wrote to Ford, asking to
be reimbursed for warranty parts at its retail rate of 77%
above its cost pursuant to the New Jersey Franchise
Practices Act ("NJFPA"), which provides that a motor vehicle
franchisor "shall reimburse" its franchisee for parts used in
warranty repairs at the franchisee's "prevailing retail price,"
provided that the retail price is "not unreasonable." N.J.
Stat. Ann. S 56:10-15(a). See app. at 286. Ford responded
on January 17, 1992, that it intended "to offset[any] parts
mark-up above 30%." Ford explained that it would
"estimate the incremental cost to [Ford] of the higher mark-
up" Liberty had demanded and would provide Liberty "a
menu of items" on Liberty's account from which the costs
could be recovered. Ford informed Liberty that it would
adjust the amount of its recovery charges "periodically . . .
to ensure that only incremental costs are recovered." Id. at
295.

                                4
On July 7, 1992, after several months of correspondence,
Ford agreed to reimburse Liberty at Liberty's claimed rate of
77% above cost although Ford "continue[d] to believe that
a retail markup of 77% is unreasonably high." App. at 308.
On October 1, 1992, Ford reminded Liberty "that there
would be cost recovery," and informed Liberty that it was
"reviewing the nature of the recoveries that will be
implemented." Id. at 319. Ford then wrote to Liberty on
November 5, 1992, confirming its agreement to reimburse
Liberty at a 77% markup retroactive to December 12, 1991,
the date Liberty first demanded retail-rate reimbursement,
and announcing that Ford would recover the cost of paying
the incremental reimbursement through a "dealer parity
surcharge." Id. at 321.

Ford explained,

       [a]s you know, parity between dealers, and parity in
       the overall economic relationship between Ford and its
       dealers, is essential. It is necessary for Ford to
       maintain dealer parity, notwithstanding Ford's
       acceptance of your request to be reimbursed for
       warranty parts at a markup exceeding the mark-up
       which Ford extends uniformly to all dealers nationally.

       To maintain that parity, and to ensure fairness to the
       overwhelming majority of dealers who are satisfied with
       . . . a uniform warranty parts reimbursement mark-up,
       and to recover our increased costs . . . . [c]osts
       incurred through today will be divided by the total
       number of vehicles in your dealership's inventory and
       . . . `in-transit' to your dealership . . . . The quotient
       will constitute a dealer parity surcharge to your
       wholesale price for each such vehicle.

Id. Ford informed Liberty that after this initial cost
recovery, "[i]ncremental costs incurred during each period
. . . will be divided by the total number of vehicles invoiced
. . . . The quotient will constitute the surcharge to your
wholesale vehicle price for each such vehicle." Id. Ford
assured Liberty that, [i]n the event the total monthly
surcharge differs from the incremental [reimbursement]
costs incurred by Ford, the aggregate amount of any excess
or shortfall to the surcharge . . . will be netted against the

                               5
Costs used to determine the surcharge for the immediately
subsequent Billing Period." Id. at 322.

In correspondence dated December 21, 1992, Liberty
requested additional reimbursements to supplement the
below-retail reimbursements it had received for warranty
parts it installed between 1986 and December 12, 1991.
See id. at 326. Ford rejected that claim. See id. at 346.

On October 5, 1992, Liberty filed a class action in federal
district court for the District of New Jersey on behalf of 38
New Jersey Lincoln-Mercury dealers, alleging that Ford's
warranty reimbursement practices violated the NJFPA. On
May 14, 1993, the district court, finding that the dealers'
claims required a "part-by-part, sale-by-sale" analysis of
each dealer's retail rate, denied the motion for class
certification for lack of the requisite commonality among
the dealers' claims. Liberty Lincoln Mercury, Inc. v. Ford
Mktg. Corp., 

, 76 (D.N.J. 1993) ("Liberty I").
The court later dismissed Liberty I without prejudice by
consent of the parties.

Liberty then filed this action on June 30, 1995. In its
complaint and amended complaint Liberty alleged that
Ford's imposition of the DPS violated the NJFPA's mandate
that Ford reimburse Liberty for warranty parts at Liberty's
prevailing retail price. Liberty also alleged that by imposing
the DPS on Liberty but not on its competitors, Ford had
engaged in unlawful price discrimination in violation of the
Robinson-Patman Act, 15 U.S.C. S 13(a).2

Liberty moved for summary judgment as to liability on
both claims and Ford moved to dismiss Liberty's price
discrimination claim. By order dated March 13, 1996, the
district court granted Liberty's motion for summary
judgment as to its NJFPA claim and granted Ford's motion
to dismiss Liberty's price discrimination claim. The district
court found that Ford was "engaged in a shell game, the
purpose of which is to avoid, altogether, the costs of
complying with the NJFPA." Slip op. at 9. Finding that the
DPS, by effectively reducing Liberty's reimbursements from
_________________________________________________________________

2. Liberty consented to the dismissal of several other claims which are
not at issue in this appeal.

                               6
Liberty's retail rate to Ford's standard rate, "essentially
nullified [Ford's] compliance and created an end-run
around the Act," the district court concluded that it "would
be formalistic, in the extreme," to find that Ford had paid
Liberty the requisite reimbursement "when [Ford] charges
back the very benefits which the Act intends to confer." Id.
at 8-9. The court thus held that the DPS violated the "clear
language of the NJFPA" by denying Liberty reimbursement
at its retail rate. Id. at 11. The court concluded, however,
that because the DPS placed Liberty in the same economic
position as competitors who received only standard
reimbursements at 30-40% above cost, it did not give rise
to a price discrimination claim under the Robinson-Patman
Act. See id. at 12-13.

Thereafter Ford discontinued the DPS, and on April 29,
1996, wrote to all New Jersey dealers announcing new
policies for processing retail-rate reimbursement claims.
The policies required dealers to document their claimed
retail prices as to each warranty part by attaching retail
customer repair orders for the same part installed in
similar vehicles within the preceding six months. See app.
at 513, 516. Ford also informed the dealers that "payment
of warranty parts reimbursement at levels higher than
[standard] reimbursement levels will be recovered . . . as
with other regulatory compliance costs." Id. at 514.

On May 15, 1996, Liberty submitted a request for retail-
rate reimbursement for warranty parts installed during
April and May 1996. Ford rejected the request for failure to
satisfy Ford's new documentation requirements. See app. at
736-42. On June 20, 1996, Liberty filed a "Motion to
Enforce the Order of March 13, 1996" challenging Ford's
new policies as imposing insurmountable burdens designed
to prevent Liberty from receiving retail-rate reimbursement,
in violation of the NJFPA and the district court's March
order. Liberty sought sanctions and an order enjoining Ford
from implementing the new requirements.

Ford responded that the issues raised in Liberty's Motion
to Enforce were beyond the scope of the complaint and the
March order, which had addressed only the legality of the
DPS and were silent as to the proper methods for
establishing a dealer's retail rate. Ford contended that its

                               7
new policies were appropriate in light of Liberty I's
pronouncement favoring a "part-by-part, sale-by-sale"
analysis of each dealer's retail rate, 149 F.R.D. at 76, and
sought discovery and the opportunity to develop a factual
record regarding the nature of the new policies and the
burdens they entailed. See app. at 729-30.

The district court, without allowing discovery or holding
an evidentiary hearing, held on September 19, 1996, that in
adopting its new reimbursement policies Ford had "ignored
or evaded" the "clear thrust" of the March opinion. Slip op.
at 1. The court found that the new procedure "appears to
be onerous in the extreme and designed to frustrate any
attempt to obtain statutory reimbursement . . . at the
dealer's prevailing retail rate." Finding, however, that the
terms of the March order were not "explicit," the court
denied Liberty's Motion to Enforce, but amended the March
order nunc pro tunc to forbid Ford from altering its prior
reimbursement procedure absent Liberty's consent or leave
of the court. The court also enjoined Ford from"any further
or other financial imposition on . . . Liberty . .. as a
recoupment" of Ford's NJFPA compliance costs. Slip op. at
2-3.

Liberty also moved for summary judgment as to the
issues of damages, interest, costs and fees. In afinal order
dated February 26, 1997, and supplemental final order
dated April 22, 1997, the district court granted Liberty's
motion in part, awarding Liberty a total of approximately
$800,000 in damages, attorneys' fees, costs and
prejudgment interest. This appeal and cross appeal
followed.

III. DISCUSSION

A. The New Jersey Franchise Practices Act

1. Statutory Language

The New Jersey Franchise Practices Act provides that:

       [i]f any motor vehicle franchise shall require or permit
       motor vehicle franchisees to . . . provide parts in

                               8
       satisfaction of a warranty issued by the motor vehicle
       franchisor . . . [t]he motor vehicle franchisor shall
       reimburse each motor vehicle franchisee . . . for such
       parts as are supplied, in an amount equal to the
       prevailing retail price charged by such motor vehicle
       franchisee for such . . . parts in circumstances where
       . . . such parts [are] supplied other than pursuant to
       the warranty; provided that such motor vehicle
       franchisee's prevailing retail price is not unreasonable
       when compared with that of [other franchisees] from
       the same motor vehicle franchisor for identical
       merchandise . . . in the geographic area in which the
       motor vehicle franchisee is engaged in business . . . .

N.J. Stat. Ann. S 56:10-15(a). We must decide whether the
district court erred in entering summary judgment in favor
of Liberty on the grounds that Ford's "surcharge regime
violates the clear language of the NJFPA." Slip op. at 11.
We review both the district court's interpretation of the
NJFPA and its entry of summary judgment de novo,
construing the NJFPA as we believe that the New Jersey
Supreme Court would construe it and viewing the record in
the light most favorable to Ford. See Pittston Co. Ultramar
Am. Ltd. v. Allianz Ins. Co., 

, 516 (3d Cir.
1997).

While the New Jersey courts have not interpreted the
relevant statutory language dictating that a "franchisor
shall reimburse" its franchisee for warranty parts at "the
prevailing retail price," under New Jersey law"[i]t is a
cardinal rule of statutory construction that the language of
the statute should be given its ordinary meaning and
construed in a common sense manner to accomplish the
legislative purpose." N.E.R.I. Corp. v. New Jersey Highway
Auth., 

, 335 (N.J. 1996) (citations and internal
quotations omitted). Applying an ordinary and common
sense definition of the relevant statutory language requiring
Ford to reimburse Liberty at retail rates, we conclude that
Ford's assessment of the DPS, which automatically reduced
the reimbursements Liberty received to below retail levels,
violated the plain language of the NJFPA.

According to Ford, because the NJFPA regulates "a
narrow aspect of the franchisor-franchisee relationship,"

                               9
dictating only the rate of reimbursement for warranty parts,
and "is silent regarding wholesale prices," the DPS which
Ford added to Liberty's wholesale vehicle prices falls
outside the purview of the NJFPA. Br. at 14-15. Ford
contends that the district court, in finding that the DPS
violated the NJFPA, "read into the statutory scheme a
remarkably intrusive and completely unstated requirement
that Ford silently bear the full cost of compliance,"
depriving Ford of "the freedom to control its wholesale
pricing structure without . . . support in the language of
the statute." Id. at 20.

We disagree. The district court did not forbid Ford from
adopting policies to recover the costs of complying with the
NJFPA; nor did it forbid methods of cost recovery involving
wholesale prices. The court simply held that while some
"methods of cost-recovery are permissible . . . .[Ford's]
method certainly is not." Slip op. at 9. Even though the
court, in reaching this conclusion, did not delineate the
distinctions between the DPS and permissible cost-recovery
systems, those distinctions are apparent from the record
before us.

As Ford explained to Liberty in setting forth its method
for calculating the DPS, "incremental [warranty
reimbursement] costs incurred [by Ford] during each period
. . . will be divided by the total number of vehicles invoiced
. . . that month." App. at 321. Accordingly, the DPS bore no
economic relationship to Liberty's wholesale vehicle
purchases, but rather was exacted as an automatic result
of, and in direct proportion to, Liberty's incremental
warranty reimbursement claims. Although Ford described
the DPS as a vehicle price surcharge and attributed a
portion of it to each vehicle on Liberty's invoice, the total
amount of the surcharge neither would increase if Liberty
purchased more vehicles nor would decrease if Liberty
purchased fewer. See id. at 308, 321. Thus, looking to the
practical operation of the DPS rather than to the
nomenclature Ford used to describe it, we conclude that
the DPS, the amount of which depended solely and directly
on Liberty's warranty reimbursement claims, functioned not
as a wholesale vehicle price term carried out through
unregulated vehicle sales transactions, but rather as a

                               10
warranty reimbursement policy that automatically
eliminated any reimbursement beyond Ford's standard rate
resulting, as Liberty argues, in "no payment at retail." Br.
at 23.

Because the DPS was assessed as an inevitable
consequence of incremental reimbursement claims and not
through separate, unregulated transactions, Ford's reliance
on Acadia Motors, Inc. v. Ford Motor Co., 

 (1st
Cir. 1995), is misplaced. Acadia held that a Maine retail
reimbursement statute similar to the NJFPA did not
preclude Ford from imposing a wholesale vehicle price
surcharge to recover the costs of reimbursing Maine dealers
at retail rates rather than at Ford's standard rate. 3 The
Acadia court found that "[n]othing in the[statutory]
language . . . prohibits a manufacturer from increasing
vehicle prices in order to recover its increased compliance
costs. The statute says nothing about wholesale or retail
prices, and apparently leaves the manufacturer free to
increase wholesale prices." Id. at 1056. Thus, the Acadia
court concluded, a restriction against wholesale price
increases would improperly establish "a rule unsupported
by state statute." Id. at 1057.4

We agree with Acadia's holding that the statutes at issue
do not preclude cost-recovery systems effected through
wholesale vehicle price increases, but reject Ford's
_________________________________________________________________

3. The Maine statute at issue in Acadia provides that:

       [i]f a motor vehicle franchisor requires or permits a motor vehicle
       franchisee to . . . provide parts in satisfaction of a warranty
created
       by the franchisor, the franchisor . . . shall reimburse the
franchisee
       for any parts so provided at the retail rate customarily charged by
       that franchisee for the same parts when not provided in
satisfaction
       of a warranty.

10 Me. Rev. Stat. Ann. tit. 10, S 1176 (West 1994).

4. In holding that the district court had fashioned a rule unsupported by
the statutory language, Acadia admonished that "federal courts must
take great caution when blazing new state-law trails." 44 F.3d at 1057
(citations and internal quotations omitted). This principle, which we
recognize as well, see Leo v. Kerr-McKee Chem. Corp., 

, 101
(3d Cir. 1994), is not implicated in this case where the district court
properly applied the plain statutory language.

                               11
contention that the DPS constitutes such a system. 5 In
Acadia, Ford reimbursed all Maine dealers at retail rates
and assessed a "warranty parity surcharge" ("WPS") that
added $160 to the price of every vehicle sold to Maine
dealers "to recover [the] increase in its costs of doing
business in Maine." 44 F.3d at 1052. The total amount of
the surcharge imposed on each dealer was "based on the
number of cars sold, without regard to whether the dealer
actually performed warranty work in that month." Id. at
1053.

Thus, in contrast to the DPS, Ford did not impose
the WPS as a consequence of a dealer's warranty
reimbursement claims, but instead assessed it as a result
of a separate vehicle purchase transaction. Because the
total amount of charges a dealer would incur under the
WPS scheme depended on the "number of cars sold" and
not on the dealer's reimbursement amounts, the WPS
operated as a bona fide wholesale price term that resulted
from and accrued in proportion to unregulated vehicle sales
transactions rather than regulated warranty reimbursement
transactions.

Contrary to Ford's assertion that "this factual difference
. . . is completely irrelevant," reply br. at 11, we find the
distinction to be critical. When a dealer incursfinancial
burdens upon making a retail-rate warranty reimbursement
claim, the dealer, in effect, is compensated for the warranty
transaction at a below-retail rate, which the NJFPA forbids.
When, however, the dealer incurs financial burdens as a
result of other transactions, those burdens may reduce the
return the dealer receives on those transactions, but the
terms of those transactions are unregulated. Therefore the
decreased compensation associated with those transactions
_________________________________________________________________

5. Where, as here, a New Jersey court has not construed the relevant
statutory language, New Jersey courts seek guidance from cases
construing similar statutes in other jurisdictions. See Neptune T.V. &
Appliances Serv., Inc. v. Litton Microwave Cooking Prods. Div., 

, 599 (N.J. Super. Ct. App. Div. 1983). Acadia, 

, is the
only such case of which we are aware.

                               12
does not violate the statute as does as a below-retail rate of
compensation for installing warranty parts.6

In light of these differences between the WPS at issue in
Acadia and the DPS at issue in this case, Acadia's approval
of the "chosen mechanism for cost recovery" in that case,
44 F.3d at 1058, has little bearing on our examination of
the decidedly different cost-recovery mechanism in this
case. Because the DPS, unlike the WPS, did not function as
a wholesale price increase effected through vehicle sales
transactions beyond the regulatory reach of the NJFPA, we
find Acadia inapposite and reject Ford's contention that
Acadia compels us to find the cost-recovery method before
us permissible under the NJFPA. Based upon the
uncontroverted facts regarding the structure and operation
of the DPS, we find that Ford's assessment of the DPS, by
automatically reducing Liberty's reimbursements to below-
retail rates, violates the NJFPA's clear mandate that the
franchisor "shall reimburse" the franchisee for warranty
_________________________________________________________________

6. The distinction holds practical as well as statutory significance.
Since
a dealer, under the standard franchise agreement, must perform all
warranty repairs brought to its dealership and cannot charge customers
for those repairs but instead must accept the franchisor's standard
reimbursement, the dealer cannot control the volume, timing or
profitability of those repairs. Thus dealers cannot mitigate losses they
may incur in performing warranty repairs by controlling the terms of
those transactions as they can in their other operations. Because losses
incurred in the context of warranty transactions impose these unique
hardships on dealers, so do cost-recovery systems that assess charges as
a result of and in proportion to those transactions.

While Ford attempts to obscure this reality by arguing that a dealer
can redistribute warranty transaction losses through its other
operations, see reply br. at 11 & n.2, this argument ignores the fact that
a dealer neither can predict nor can control the proportion of its
operations it will be required to devote to performing mandatory
warranty repairs, and thus could recover fluctuating warranty losses
only by constantly readjusting retail prices, which would be economically
infeasible. Thus, a rule protecting dealers fromfinancial burdens
incurred through warranty transactions but not through other
transactions not only comports with the statutory scheme dictating the
terms only of the former, but also recognizes the unique hardships
associated with warranty losses due to the dealer's lack of control over
the terms of warranty transactions.

                               13
parts "in an amount equal to the prevailing retail price."
N.J. Stat. Ann. S 56:10-15(a).7

In arguing that its DPS scheme comports with the
NJFPA, Ford essentially argues that to achieve compliance
with the retail reimbursement mandate, a franchisor only
need record a nominal retail-rate credit to the dealer, even
if an offsetting debit ensures that the dealer never receives
any reimbursement at the retail rate. Ford's definition of
statutory compliance would require us to view its initial
retail-rate reimbursement in isolation from the surcharge
that inevitably offsets that reimbursement, contrary to the
undisputed evidence that the offset followed ineluctably
from the incremental reimbursement and relegated Liberty
to the same position as if it initially had received only the
standard reimbursement.8

Ford's strained construction of the NJFPA, which the
district court properly rejected as "formalistic, in the
extreme," slip op. at 9, would ascribe paramount
importance to illusory transactions recorded on a dealer's
invoice while ignoring the reality of whether the franchisor
actually reimbursed its franchisee "in an amount equal to
the prevailing retail price" as the statute requires. Because
a statute permitting illusory transactions with no economic
effect would serve no legislative purpose, we find no
indication that the New Jersey Supreme Court would adopt
Ford's construction of the NJFPA contrary to that court's
pronouncement that statutes be construed in "a common
_________________________________________________________________

7. Because the surcharge in this case resulted automatically from
Liberty's incremental reimbursement claims and because the total
amount of the surcharge depended directly on the amount of those
claims, we need not decide the legality under the NJFPA of cost-recovery
methods that depend on a dealer's reimbursement transactions in some
less direct manner.

8. Indeed, in maintaining that the surcharge achieved "parity" between
Liberty and competitors who received only standard reimbursements,
Ford effectively recognizes that the DPS consigned Liberty to the same
position as dealers who were reimbursed at Ford's rates which were
statutorily deficient as to Liberty. See app. at 321 ("[P]arity between
dealers . . . is essential. . . . To maintain that parity . . . and to
recover
our increased costs . . . the Costs will be recovered [through] a dealer
parity surcharge.").

                                14
sense manner to accomplish the legislative purpose."
N.E.R.I Corp., 686 A.2d at 335. In fact, we are quite
confident that that court would reject Ford's NJFPA
argument.

Construing the statutory terms according to their plain
and ordinary meaning as is required under New Jersey law,
see Service Armament Co. v. Hyland, 

, 16 (N.J.
1976); Cutler v. Borough of Westwood, 

, 47
(N.J. Super. Ct. App. Div. 1996), certif. denied, 

 (N.J. 1997), we conclude that the term "reimburse,"
which is defined as "[t]o pay back, to make restoration, to
repay that expended; to indemnify, or make whole," BLACK'S
LAW DICTIONARY 1287 (6th ed. 1990), is not satisfied by
transactions that fail to result in actual payment or
restoration of the requisite sums. Accordingly we, like the
district court, hold that in reducing Liberty to"the same
position as if it were reimbursed the standard thirty to forty
percent above cost," slip op. at 10, the DPS scheme violated
"the clear language of the NJFPA" by denying Liberty
reimbursement at its prevailing retail rate. Id. at 11.

2. Legislative Purpose

Because the district court properly construed the NJFPA
"as it is written [and] . . . not according to some
unexpressed intention," Unsatisfied Claim & Judgment
Fund Bd. v. New Jersey Mfrs. Ins. Co., 

, 193
(N.J. Super. Ct. App. Div.), aff'd, 

 (N.J.
1994), we find no merit in Ford's contention that the
district court erred by relying on legislative history to
expand the NJFPA beyond the scope of its plain statutory
language. See br. at 16. The legislative history, however,
clearly does support a statutory interpretation that
prohibits spurious transactions which ultimately fail to
result in reimbursement at the dealer's retail rate.

The New Jersey courts have held that the NJFPA is a
remedial statute intended to equalize the disparity of
bargaining power in franchisor-franchisee relations. See
Kubis & Perszyk Assocs., Inc. v. Sun Microsystems, Inc., 

, 626 (N.J. 1996) (recognizing NJFPA's "basic
legislative objectives of protecting franchisees from the

                                15
superior bargaining power of franschisors"); Tynan v.
General Motors Corp., 

, 100 (N.J. 1992)
(adopting reasoning of dissent below stating that"[t]he
Franchise Practices Act is remedial in purpose [and]
focuses on the need to protect franchisees from inequitable
treatment by economically more powerful franchisors")
(citing Tynan v. General Motors Corp., 

, 1035
(N.J. Super. Ct. App. Div. 1991) (Cohen, J., dissenting in
part)); Westfield Ctr. Serv., Inc. v. Cities Serv. Oil Co., 

, 52-54 (N.J. 1981) (discussing "disparity in . . .
bargaining power" addressed in NJFPA).9 Under New Jersey
law, remedial statutes must be construed broadly to give
effect to their legislative purpose. See Lemelledo v.
Beneficial Management Corp., 

, 585 (N.J.
Super. Ct. App. Div. 1996), aff'd, 

 (N.J. 1997);
Sabella v. Lacey Township, 

, 898 (N.J. Super.
Ct. App. Div. 1985).

The motor vehicle franchise provisions at issue, which
the legislature added to the NJFPA in 1977, were "designed
to remove the franchisor's present opportunity to isolate
himself from the warranty he issues." Legislative Statement,
L. 1977, c. 84, S 3, Assembly No. 1956 (May 24, 1976)
("Legis. Statement"). In enacting the retail reimbursement
requirement, the New Jersey legislature expressed its intent
to "offer[ ] protection to the competent retailer against
arbitrary actions by manufacturers who too often hold a
life-and-death power over his business and his ability to
serve his customers." Id. In light of these statements
indicating an intent to shift responsibility toward
franchisors who issue warranties and to protect dealers in
their transactions with franchisors, we agree with the
district court that a construction of the NJFPA permitting
machinations which ultimately fail to afford the dealer
reimbursement for warranty parts at its retail rate would
"fly in the face of the intent of the New Jersey legislature
_________________________________________________________________

9. In a 1989 amendment to the NJFPA adopted after the 1977 provision
at issue, the New Jersey legislature explicitly codified its concern over
the "inequality of bargaining power . . . between motor vehicle
franchisors and motor vehicle franchisees." See N.J. Stat. Ann. S 56:10-
7.2(b).

                               16
. . . and would undermine the purpose of the Act." Slip op.
at 11.

Ford attempts to diminish the significance of the
 851legislative history by arguing that the New Jersey

legislature identified several consumer protection concerns
before expressing its intent to protect dealers. See reply br.
at 6 (citing Legis. Statement). The legislature, however, did
not indicate the relative importance of these concerns. We
therefore find no relevance in the order in which the
legislature articulated them. In any event, the stated
consumer protection concerns of ensuring that warranty
customers receive the same service as retail customers and
that warranty work be performed according to generally
acceptable standards, see Legis. Statement, are aligned
closely with the intent to protect dealers from arbitrary
actions by franchisors. Dealers who receive below-retail
compensation for installing warranty parts are discouraged
from devoting the same resources to installing those parts
as they devote to installing those for retail customers.10
Thus, the consumer protection concerns behind the NJFPA
further support a statutory interpretation which focuses on
the compensation rate the dealer effectively receives in
connection with its warranty transactions and not on
whether the franchisor recorded a nominal transaction
crediting the dealer at the requisite rate.

Ford also argues that the district court erred in
concluding that, "[a]lthough the Act is silent regarding
whether and how franchisor-manufacturers may distribute
compliance costs, it cannot be the case that the franchisee-
dealers--the class of intended beneficiaries--bear the entire
burden." Slip op. at 11. According to Ford, the district court
erred in reaching this conclusion as to the intended effect
of the NJFPA, since regulated entities frequently pass
statutory compliance costs along to retailers who do not
then "bear the entire burden" of those costs, but rather
pass those costs on to consumers. See br. at 18-19; 20-21.
_________________________________________________________________

10. Because the reimbursement rate for the labor associated with
warranty repairs is not at issue, we assume equal rates for the labor
used in warranty and non-warranty repairs.

                               17
We are unpersuaded by this argument, which ignores the
fact that the purported "compliance costs" which Ford
shifted to Liberty were not incidental to compliance with an
independent regulatory mandate, such as a vehicle safety
standard or an environmental regulation, but rather were
the very subject of the substantive regulation at issue,
which explicitly mandates that "the motor vehicle franchisor
shall reimburse" its franchisee at the "prevailing retail
price." N.J. Stat. Ann. S 56:10-15(a) (emphasis added).

In contending that it may shift to Liberty the cost of
complying with that mandate, Ford essentially insists that
it can achieve statutory compliance by requiring Liberty to
reimburse itself.11 This shifting of the retail cost of warranty
parts not only violates the clear mandate that Ford as the
franchisor pay Liberty the retail price for warranty parts,
but also frustrates the purpose behind a statute that was
intended to deny the franchisor the "opportunity to isolate
himself from the warranty he issues," to protect dealers
against "arbitrary actions by manufacturers," and to ensure
that warranty repairs are of the same quality as retail
repairs. Legis. Statement. Accordingly, we agree with the
district court's conclusion that Ford's imposition of the DPS
contravened the legislative purpose as well as the clear
statutory language of the NJFPA. We, therefore, will affirm
the March 13, 1996 order granting Liberty's motion for
summary judgment on its NJFPA claim.

B. The September 19, 1996 Order

After the district court entered its March 13, 1996 order
holding that the DPS violated the NJFPA, Ford ceased
imposing the DPS, but adopted a new policy requiring
_________________________________________________________________

11. Since the DPS deprived Liberty of the reimbursement which Ford
statutorily was obligated to pay, the issue of whether Liberty, as Ford
argues, effectively could recover the losses resulting from this
deprivation
through other transactions becomes immaterial. See br. at 18-21. We
note, however, that in light of the difficulties inherent in
redistributing
warranty losses through retail transactions, see supra note 6, the
district
court appears to have been correct in finding that dealers ultimately
would bear a significant portion of the costs shifted to them through the
DPS. See slip op. at 8.

                                  18
dealers to document claimed retail rates by submitting
proof of the prices the dealer charged actual retail
customers for the same part during the prior six months.
See app. at 513-17. After Ford rejected Liberty's
reimbursement claims for failure to comply with this
requirement, Liberty objected to the requirement in a
Motion to Enforce the district court's March order, which
alleged that Ford's new policy imposed insurmountable
burdens designed to preclude dealers from receiving retail-
rate reimbursements. See id. at 498-500. Ford responded
that it adopted its policy in a good faith attempt to comply
with the "part-by-part, sale-by-sale" retail rate analysis set
forth in Liberty I, 149 F.R.D. at 76, and sought discovery as
to how burdensome other dealers found the policy and as
to the methods other franchisors used to determine their
dealers' retail rates, in order to refute Liberty's allegations
that Ford's policies were excessively burdensome. See app.
at 729-30.

Although the district court denied Liberty's Motion to
Enforce "given the non-specific language of the March 13,
1996 order," slip op. at 1, it entered an order"nunc pro tunc
to March 13, 1996" requiring Ford to adhere to the
"procedure the parties followed . . . until . . . April 1996,
i.e., reimbursement . . . at [Liberty's] retail rate, calculated
. . . at 77% over [Liberty's] cost." Id. at 2-3. The court
ordered Ford to continue processing Liberty's
reimbursement claims based on a 77% markup "unless and
until the parties agree that a retail rate, calculated at a
later date, is more accurate, another mutually acceptable
computation of the retail rate is agreed upon, or, as long as
this court retains jurisdiction, on a showing by[Ford] that
the procedure should be changed." Id.12
_________________________________________________________________

12. The impact of this order is significant. Ford disputed whether
Liberty's claimed 77% markup was reasonable, see app. at 321, but had
no reason to pursue the issue in light of the DPS, which reduced
Liberty's reimbursements to Ford's standard 30-40% markup, rendering
the claimed retail rate irrelevant. However, after the court invalidated
the
DPS the retail rate became determinative of the required reimbursement
amount. Yet the court, in its September order, bound Ford to the 77%
rate Ford had accepted under protest and precluded Ford from adopting
any method for questioning or substantiating that rate.

                               19
Ford contends that the district court erred in restricting
Ford's new reimbursement policy, the legality of which
neither was challenged in Liberty's complaint nor was
addressed in the district court's prior order, without
providing Ford an adequate opportunity to address the
factual and legal issues surrounding the policy. We agree,
and therefore will reverse the September 19, 1996 order.

The district court did not explain the procedural grounds
upon which it proceeded to award relief restricting Ford's
policy, after denying the only motion contesting that policy.13
While it is unclear whether the district court intended the
order as a sanction for what it perceived as an "end run
around the clear intention of" the March order, slip op. at
1-2, or as an entry of judgment on Liberty's allegation that
Ford's newly adopted policy violated the NJFPA, we
conclude that we cannot sustain the order on either basis.

We cannot sustain the September order as a sanction for
noncompliance with the court's March order because the
policy which the court restricted in the September order did
not violate any clear mandate set forth in the March order.
The district court in fact denied Liberty's Motion to Enforce
the March order "given the non-specific language" thereof,
and thus recognized that the March order, in invalidating
the DPS as an offset against a dealer's claimed retail rate,
did not preclude Ford from requiring a dealer to
substantiate its claimed retail rate. Slip op. at 1. 14 This
_________________________________________________________________

13. Liberty's complaint, which challenged the imposition of the DPS to
offset its retail rate, is silent as to the proper method for establishing
the
retail rate. While the complaint sought an injunction against any
"financial imposition . . . as a recoupment . . . for reimbursements paid
or to be paid," it did not seek any relief dictating Liberty's retail rate
or
the procedure used to establish it. See app. at 19-20. The district
court's
March order is equally silent regarding the proper calculation of
Liberty's
retail rate.

14. In discussing the scope of its March order, the district court
explained,

       the specific declarations   as to liability which[Liberty] sought in
       Count One, while implicit   in [the March] order granting summary
       judgment as to Count One,   were not explicit, presumably the reason
       why the spirit if not the   letter of that order -- and certain
specific
20
court repeatedly has refused to uphold orders entered as
sanctions based on conduct that did not violate a clear,
specific mandate. See, e.g., Harris v. City of Philadelphia,

, 1352 (3d Cir. 1995) (reversing imposition of
sanctions where decree sought to be enforced lacked"an
unambiguous provision" prohibiting the conduct at issue);
Louis W. Epstein Family Partnership v. Kmart Corp., 

, 771 (3d Cir. 1994) (holding that "[b]road, non-specific
language" in an order does not give a party "fair notice of
what conduct will risk contempt" and thus cannot support
imposition of sanctions); Eavenson, Auchmuty & Greenwald
v. Holtzman, 

, 544 (3d Cir. 1985) (holding that
where party had "reasonable grounds to believe" conduct
"was in compliance with the district court's order,"
"imposition of sanctions was not warranted and constituted
an abuse of discretion"); Inmates of Allegheny County Jail v.
Wecht, 

, 129 (3d Cir. 1985) ("Persons may not
be placed at risk of contempt unless they have been given
specific notice of the norm to which they must pattern their
conduct."). Because the March order did not contain a
clear, specific mandate precluding Ford from adopting
policies for verifying a dealer's retail rate or requiring Ford
to apply a particular retail rate, we cannot sustain the
September order as a sanction against Ford's purported
"end run around the clear intention of" the March order.
Slip op. at 2.

Nor can we sustain the September order as an entry of
judgment on Liberty's claim, first raised in its Motion to
Enforce, that Ford's new policy violated the NJFPA. A court
_________________________________________________________________

       language in and the clear thrust of the opinion-- have since been
       ignored or evaded by [Ford].

Slip op. at 1. The district court did not and this court cannot identify
any "specific language" in the March opinion that was "ignored or
evaded" by Ford's new reimbursement policy. Even if the declarations of
liability Liberty sought in Count I had been "explicit" in the March
order,
those declarations dealt exclusively with surcharges that offset retail
rates and not with procedures for establishing retail rates. See app. at
18-19. Nothing in the March order explicitly or implicitly required Ford
to accept Liberty's claimed retail rate of 77% or prohibited Ford from
adopting policies for substantiating dealers' retail rates.

                               21
may enter summary judgment in favor of a party only when
the pleadings and the factual record before the court
demonstrate that there "is no genuine issue as to any
material fact" and the party is "entitled to a judgment as a
matter of law." Fed. R. Civ. P. 56(c). In applying these
standards, the court must construe the facts in the light
most favorable to the party against whom judgment is
sought. See Lawrence v. National Westminster Bank New
Jersey, 

, 65 (3d Cir. 1996). Moreover, before
entering summary judgment against a party, the court
must afford that party "adequate notice and time to present
to the district court material relevant to [its] claim in order
to demonstrate that there is a genuine issue of material fact
that renders summary disposition . . . inappropriate."
Hilfirty v. Shipman, 

, 578 (3d Cir. 1996). The
court also must provide an adequate opportunity for
discovery of the material facts. See Kachmar v. Sungard
Data Sys., Inc., 

, 183 (3d Cir. 1997).

In this case the district court entered a judgment
awarding relief against Ford without granting it an
opportunity to obtain discovery or present evidence
regarding the material issues as to the nature of the new
reimbursement procedure, the burdens associated
therewith, and the intent underlying its adoption. While the
district court made no explicit factual findings and
disavowed any attempt to resolve these factual issues,
stating that it "need not . . . and will not address the
procedure imposed by Ford . . . following this court's
[March] decision," slip op. at 3 n.2, the court, nonetheless,
clearly based the September order on implicit factual
determinations regarding the newly adopted procedure.

The court described that procedure as "onerous in the
extreme and designed to frustrate any attempt to obtain
statutory reimbursement." Id. Moreover, the court's final
order described the circumstances of the September order
as follows:

        Liberty filed a motion to enforce the March[order]
       arguing that [Ford's] new procedure acted as an
       unlawful barrier to Ford's statutory compliance . . .
       [through] an impracticable or impossible procedure

                               22
       that violates the NJFPA and this court's previous
       Opinion and Order.

        This court agreed. The new procedure . . . imposed a
       literally impossible burden . . . .

February 26, 1997 slip op. at 4. The court's final order thus
confirms that the September order rested on implicit
findings that Ford's new policy imposed "impossible" and
unlawful burdens, id. at 4, that were intended "as nothing
more and nothing less than an end-run around" the March
order. Id. at 12. Because the court made these findings
regarding Ford's newly adopted policy and awarded Liberty
relief based upon those findings without allowing Ford to
obtain discovery or demonstrate the existence of genuine
issues of material fact as to the lawfulness of the policy, we
must vacate the September order. See Kachmar, 109 F.3d
at 183; Hilfirty, 91 F.3d at 578.15

The September 19 order awarded only declaratory and
injunctive relief. Accordingly, as Ford concedes, see br. at
34, our reversing that order has no effect on the award of
damages in the district court's final order. It, however, may
affect the district court's assessment of the "result
_________________________________________________________________

15. While our holding rests on the grounds discussed above, we also
note that Liberty was awarded judgment on a claim not raised in the
complaint. See Morris v. Philadelphia Hous. Auth., 

 at
* 4 (E.D. Pa.) ("plaintiff may not move for summary judgment on claims
not raised in the complaint"), aff'd, 

 (3d Cir. 1996) (table);
Landano v. United States Dep't of Justice, 

, 891 (D.N.J.
1994) ("Plaintiff did not allege [the] claim in its complaint and cannot
raise [it] on a . . . motion for summary judgment."). The September order
awarded declaratory and injunctive relief other than that discussed
above. However, absent a properly supported determination that Ford
had violated the NJFPA or an order of the court since the entry of the
March order, we cannot sustain any of the relief awarded in the
September order.

In reversing the September order on procedural grounds, we express
no opinion on the merits of the issues implicitly resolved therein. We
note only that the existence of colorable authority for requiring dealers
to establish retail rates on a part-by-part basis, see Acadia, 44 F.3d at
1052; Liberty I, 149 F.R.D. at 76, further accentuates the need to assess
the lawfulness of Ford's documentation policy based on a properly
developed record.

                               23
obtained" by Liberty in this litigation, which the court
considered in calculating the award of attorneys' fees in its
final order. See February 26, 1997 slip op. at 10.
Accordingly, we will vacate the fee award and will remand
that portion of the district court's February 26, 1997 final
order for consideration of the effect, if any, of this opinion
on the amount of fees Liberty is entitled to recover.

C. Robinson-Patman Act

The Robinson-Patman Act, a 1936 amendment to the
Clayton Act, provides in relevant part that:

       [i]t shall be unlawful for any person engaged in
       commerce, in the course of such commerce . . . to
       discriminate in price between different purchasers of
       commodities of like grade and quality, . . . where the
       effect of such discrimination may be substantially to
       lessen competition or tend to create a monopoly . . . or
       to injure, destroy, or prevent competition . . . .

15 U.S.C. S 13(a).16 To state a claim under the Robinson-
Patman Act, a plaintiff must allege facts demonstrating the
existence of price discrimination, which the Supreme Court
has defined as "merely a price difference." Texaco Inc. v.
Hasbrouck, 

, 558, 

, 2544
(1990); Federal Trade Comm'n v. Anheuser-Busch, Inc., 

, 549, 

, 1274 (1960).17
_________________________________________________________________

16. The Act contains a proviso exempting "price differentials which make
only due allowance for differences in the cost of manufacture, sale or
delivery resulting from the differing methods or quantities in which such
commodities are . . . sold or delivered." 15 U.S.C. S 13(a). Because we
conclude that Ford did not engage in price discrimination or inflict
competitive injury within the meaning of the Act, we need not consider
the applicability of the proviso.

17. Anheuser-Busch was a primary line injury case addressing injury to
the discriminating seller's competitors, in contrast to this secondary
line
injury case, which alleges injury in competition among the
discriminating seller's customers. See Barr Labs., Inc. v. Abbott Labs.,

, 106 n.16 (3d Cir. 1992) (discussing distinction between
primary and secondary line injury cases). While Anheuser-Busch's broad
definition of price discrimination generally is applicable in secondary
line

                               24
The district court dismissed Liberty's claim on the
grounds that its allegations challenging the DPS as a form
of unlawful price discrimination "fail[ ] to demonstrate the
existence of a price difference." Slip op. at 12. The court
explained that:

       while it is true that no other . . . dealer was or is
       subject to a surcharge, this is because no other dealer
       attempted to enforce the NJFPA. [Liberty] is being
       reimbursed for warranty parts at seventy-seven percent
       above cost at the same time that [its] competitors are
       being reimbursed the standard thirty to forty percent
       above cost. The surcharge was merely a device to
       recoup the extra costs [Ford] incurred by reimbursing
       [Liberty] at the retail rate.

        Thus, the surcharge eliminated any price difference
       that existed by virtue of [Liberty's] enforcement of the
       NJFPA . . . . [Liberty] was placed in the same position
       as its competitors: all dealers were effectively
       reimbursed at the standard rate, albeit in violation of
       the NJFPA. Thus, there was no price difference.

Id. at 12-13. Exercising plenary review over the district
court's dismissal for failure to state a claim and accepting
Liberty's factual allegations as true, see Graves v. Lowery,

, 726 (3d Cir. 1997), we agree with the district
court's conclusion that Liberty's complaint fails to allege
actionable price discrimination.18
_________________________________________________________________

injury cases, see Stelwagon Mfg. Co. v. Tarmac Roofing Sys., Inc., 

, 1271 (3d Cir. 1995), cert. denied, 

 (1996), this
court has warned "against elevating this isolated passage to an all-
inclusive definition" particularly in secondary line injury cases. Edward
J. Sweeney & Sons, Inc. v. Texaco, Inc., 

, 120 (3d Cir.
1980).

18. Because the district court disposed of Liberty's Robinson-Patman Act
claim on Ford's motion to dismiss, we confine our analysis to Liberty's
allegations and do not consider matters outside the pleadings. We note,
however, that the evidentiary record regarding the operation of the DPS,
as discussed above in our analysis of the NJFPA issues resolved on a
motion for summary judgment, lends further support to our conclusion
that the DPS did not result in actionable price discrimination.

                               25
According to Liberty's own factual allegations,

       Ford would . . . recoup the increase in reimbursement
       [beyond Ford's standard rate] by assessing against
       Liberty . . . a `dealer parity' . . . surcharge to the
       wholesale price of each vehicle . . . equal to the
       incremental credit for parts; that is, Ford would
       effectively cancel out the additional reimbursement . . . .
       [and] effectually continues to underreimburse Liberty
       . . . for warranty work . . . .

App. at 17-18 (emphasis added). Thus, the facts alleged in
the complaint demonstrate that Ford used wholesale
vehicle prices as a method for implementing the DPS policy,
the intent and effect of which was to reduce Liberty's
reimbursements, not to alter vehicle prices.19 Because the
complaint fails to allege any facts demonstrating an actual
increase in vehicle prices, we agree with the district court's
conclusion that, "[a]lthough these actions violate the
NJFPA, they do not create a price difference among[Liberty]
and its competitors which violates . . . the Robinson-
Patman Act." Id. at 13. We therefore will affirm the
dismissal of Liberty's claim for failure to allege facts
demonstrating that Ford engaged in price discrimination.20
_________________________________________________________________

19. Similarly, Liberty states in its brief to this court, "Ford applied
the
surcharge to the wholesale price of each vehicle [and] thus canceled out
the incremental reimbursement. . . . Once this shell-game maneuver was
complete, Liberty did not receive retail reimbursement . . . ." Br. at 15-
16; see also id. at 23 ("the `parity surcharge' meant no [warranty parts]
payment at retail"); id. at 38 ("[t]he price differential . . . is
expressly a
recoupment of the incremental warranty reimbursement").

20. Assuming arguendo that the surcharge could be viewed as a term
affecting vehicle costs rather than reimbursement rates, a "uniform
pricing formula applicable to all customers is not a price discrimination
under the [Robinson-Patman] act." Edward J. Sweeney & Sons, Inc. v.
Texaco, Inc., 

, 120 (3d Cir. 1980); accord, FLM Collision
Parts, Inc. v. Ford Motor Co., 

, 1026 (2d Cir. 1976) (finding
"no violation . . . in pricing plans which, though varying prices
according
to different terms of sale, were administered equally to all purchasers").
Ford's policy was to recoup through the DPS any reimbursement
exceeding Ford's standard rate. The fact that Liberty, as the only dealer
to claim incremental reimbursements, was the only dealer to incur
charges under this uniform policy does not give rise to a price
discrimination claim.

                               26
Even if the DPS resulted in a vehicle price difference, we
would be compelled to affirm the dismissal on the grounds
that Liberty's allegations do not demonstrate the existence
of the competitive injury required to sustain a Robinson-
Patman Act claim. As this court has explained, "price
discriminations are not illegal per se. . . . [I]n order for a
price difference to be illegal . . . [it] must have the
proscribed anti-competitive effect." J.F. Feeser, Inc. v. Serv-
a-Portion, Inc., 

, 1532 (3d Cir. 1990) (citing
Anheuser-Busch, 363 U.S. at 533, 80 S.Ct. at 1276).
Liberty's complaint did not allege competitive injury
resulting from the imposition of the DPS. See app. at 24.
While Liberty alleged "economic loss . . . as a consequence
of . . . underreimbursement," it did not allege that this loss
placed it at a disadvantage relative to its competitors who
were subjected to the same underreimbursement. Id. at 18.
In arguing to this court that the DPS inflicted competitive
injury because it was "exacted from Liberty and none of its
competitors," br. at 38, Liberty ignores the fact that,
according to its complaint, the DPS was calibrated to "equal
. . . the incremental credit" that Liberty received while its
competitors did not. App. at 18.21 Because any
disadvantage arising from the DPS merely offset an
advantage conferred uniquely on Liberty, the DPS did not
have the anticompetitive effect required to state a claim
under the Robinson-Patman Act. See J.F. Feeser, 909 F.2d
at 1532.
_________________________________________________________________

21. Liberty suggests, in passing, that the surcharge "could exceed the
warranty parts reimbursement at any given time." Reply br. at 6. The
district court properly rejected any attempt to base a price
discrimination claim on discrepancies between the amount of the
incremental reimbursement and the amount of the surcharge, as these
discrepancies related only "to particular surcharges" and not to "the
structure of the surcharge system," slip op. at 13 n.2, which by Liberty's
own admission assessed charges that equaled the total incremental
reimbursements. See app. at 18. Thus any difference in Liberty's
economic position relative to its competitors was temporary and
incidental and therefore not actionable under the Robinson-Patman Act.
See Craig v. Sun Oil Co., 

, 224 (10th Cir. 1975) (rejecting
price discrimination claim "based upon . . . billing errors . . . which
were
corrected").

                               27
D. Parts Installed Before December 1991

In its motion for summary judgment on the issue of
 704damages, Liberty sought to recover not only the

incremental reimbursements it was denied as a result of
the surcharge, but also additional reimbursements for
warranty parts installed before December 12, 1991, the
effective date of Ford's agreement to credit Liberty at retail
rates subject to the surcharge. Citing Ford's warranty
manual, which permits dealers to submit reimbursement
claims for up to one year after a warranty part is installed,
Liberty argued that because it demanded retail-rate
reimbursements on December 12, 1991, it was entitled to
additional reimbursements to supplement the standard
reimbursements it had received for parts installed during
the year preceding December 12, 1991. See February 26,
1997 slip op. at 6.

The district court held that, "[t]his legal issue was never
addressed during the liability phase of this case because
Liberty explicitly waived all claims other than its claim for
illegal surcharge since December 12, 1991." Id. at 7. The
district court cited Liberty's brief regarding liability, in
which Liberty expressly stated that it "claim[ed] liability
only on the reimbursement amounts recovered by Ford by
illegal surcharge since December 1991." Thus, the court
concluded, "[b]ecause the court did not grant summary
judgment as to liability on this issue, it cannot now award
damages." Id.

Liberty's briefs to this court do not challenge the waiver
determination that the district court found dispositive, but
rather address only the merits of Liberty's entitlement to
additional reimbursements for parts installed before
December 12, 1991.22 The district court's order entering
_________________________________________________________________

22. Liberty addresses the waiver issue only by stating that "Ford's
liability for retail payment on claims submitted since December 12, 1991
was never waived. It is recognized in the Court's Orders and decisions,
with the exception of the final ruling on . . . damages." Reply br. at 12
(emphasis added). The district court's orders did not "recognize" any
liability as to warranty parts installed before December 12, 1991. In the
portion of Liberty's brief asserting that it preserved the issue in the
district court, Liberty states only that it raised the issue "as to
damages"
and does not cite any part of the record where it sought to establish
Ford's liability for the reimbursements at issue. See br. at xiv.

                               28
judgment as to Ford's liability under the NJFPA explicitly
stated, "[f]or the reasons stated herein, the court grants
[Liberty's] motion for summary judgment as to liability,
since December, 1991 only." Slip op. at 14. We therefore
conclude that the district court properly refused to award
damages on this claim which Liberty failed to raise at the
liability stage of the proceedings.

Even if Liberty had not waived the issue, undisputed
evidence demonstrates that Ford is not liable for any
additional reimbursements for parts installed before
December 1991. Liberty claims that it is entitled to
additional reimbursements for parts installed between
December 12, 1990, and December 12, 1991, because the
relevant warranty agreement permitted dealers to submit
reimbursement claims within one year from the date of
repair. See app. at 139 ("After 1 year from date of repair . . .
[w]arranty . . . claims will not be accepted."). Liberty
contends that, because Ford first agreed to reimburse
Liberty at retail as of December 12, 1991, Ford is obligated
to pay Liberty the incremental reimbursement for all
warranty parts Liberty installed after December 12, 1990,
to supplement the below-retail reimbursements Liberty
received for installing those parts. Br. at 40-41.

However, contrary to Liberty's assertion that it
"submitted incremental reimbursement claims" on
December 12, 1991, id., the letter of that date merely
requested an increase in Liberty's reimbursement rate and
did not submit any specific reimbursement claims or make
reference to any parts already installed and reimbursed at
a lower rate. See app. at 286 ("I hereby apply for an
increase in warranty parts markup . . . to my retail
markup."). Liberty first made specific retail-rate
reimbursement claims "for the period of December 12, 1991
to June 30, 1992," in a letter dated September 23, 1992,
again making no reference to parts installed before
December 12, 1991. App. at 316-17. It was not until
December 21, 1992, that Liberty first submitted a request
for retail-rate reimbursement for parts installed before
December 12, 1991. This request included parts installed
during "the years 1986 through 1991 inclusive." App. at
326.

                                29
Thus, Liberty did not seek the additional reimbursements
at issue until December 21, 1992. As Ford accurately
contends, pursuant to the warranty manual Liberty's
claims "were time-barred on the date they were made" as
they pertained to repairs performed before December 21,
1991. Reply br. at 30.23 Because Liberty failed to seek the
reimbursements at issue within one year of the repair date,
it is immaterial that Liberty sought a higher reimbursement
rate on December 12, 1991, in a request that did not
present any specific reimbursement claims.24 Similarly, it is
immaterial that "[a]s of December 12, 1991, all of Liberty's
claims back one year from [the] date of repair were eligible
for the incremental warranty payment," reply br. at 13,
since Liberty failed to submit those claims before that
eligibility expired on December 12, 1992. Accordingly, even
if Liberty had not waived its claim to recover additional
reimbursements for parts installed before December 12,
1991, we would affirm the district court's rejection of that
claim.

E. Prejudgment Interest Rate

In its February 26, 1997 final order the district court,
applying the principles of state law that govern awards of
prejudgment interest in federal diversity actions, see
Zippertubing Co. v. Teleflex, Inc., 

, 1414 (3d
Cir. 1985); W.A. Wright, Inc. v. KDI Sylvan Pools, Inc., 

, 219 (3d Cir. 1984), awarded Liberty prejudgment
interest on its NJFPA damages at the rates set forth in New
Jersey Court Rule 4:42-11. Slip op. at 8-9. Under New
Jersey law, a court may award prejudgment interest in its
discretion in accordance with equitable principles, and the
court's exercise of its discretion should not be disturbed on
_________________________________________________________________

23. Liberty did not distinguish the 1991 claims from the even more
untimely claims dating back to 1986.

24. While Liberty argues that "for the most part" the claims at issue were
"already submitted and approved" at Ford's standard rate, reply br. at
13, Liberty makes no argument to support its apparent suggestion that
claims for additional reimbursements are exempt from the one-year
limitation period that on its face applies to all warranty reimbursement
claims. See app. at 139.

                               30
appeal unless it represents "a manifest denial of justice." In
re Petition of County of Essex, 

, 858 (N.J.
Super. Ct. App. Div.), certif. denied, 

 (N.J.
1997); accord Coastal Group, Inc. v. Dryvit Sys., Inc., 

, 654 (N.J. Super. Ct. App. Div. 1994).

The district court found that, "because Ford has had the
use, and Liberty has not, of the funds retained by Ford by
way of illegal surcharges," Liberty was entitled to interest
on the surcharges from December 1991 through March
1996. The court concluded that New Jersey Court Rule
4:42-11, which sets forth postjudgment interest rates and
prejudgment interest rates in tort suits, "reflect[ed] an
equitable rate of return" under the circumstances of the
case. See slip op. at 8-9 (citing Zippertubing Co., 757 F.2d
at 1414; W.A. Wright, Inc., 746 F.2d at 219). Liberty
contends that the district court abused its discretion in
applying the New Jersey Court Rules instead of adopting
the involuntary loan theory recognized in A-S Dev., Inc. v.
W.R. Grace Land Corp., 

 (D.N.J. 1982),
aff'd, 

 (3d Cir. 1983) (table). Liberty argues
that under this theory, the district court should have
applied the interest rate Ford would have charged Liberty
for late payments or loans during the same period. See br.
at 41.

In arguing that the involuntary loan theory is
"particularly appropriate" since Liberty "partially
underwrote Ford's coverage of its manufacturing defects,"
id. at 41, 43, Liberty ignores the fact that A-S Development
applied the involuntary loan theory as an element of
damages and not as a measure of prejudgment interest. See
A-S Dev., 537 F. Supp. at 559 (holding that"plaintiff is
entitled to damages in an amount to be calculated on the
involuntary loan theory"). Liberty points to nothing
requiring the district court, in its discretionary weighing of
equitable considerations, to adopt this theory and nothing
indicating that the interest rates set forth in the New Jersey
Court Rules were inequitable under the circumstances of
the case.25
_________________________________________________________________

25. Liberty emphasizes that the award of prejudgment interest must be
determined by "equitable principles," reply br. at 14-15, but raises no
arguments and cites no authority indicating that the district court
misapplied these principles.

                               31
Liberty also challenges the district court's conclusion that
"[b]ecause Liberty has asserted its claim under N.J.S.A.
56:10-10 and 56:10-15, it is not entitled to prejudgment
interest at 12% under N.J.S.A. 56:10-13.5, which applies
only to claims under that section." Slip op. at 9 n.3. Liberty
argues that "this Court could properly apply" N.J. Stat.
Ann. S 56:10-13.5, br. at 42, which provides that,

       [i]f a motor vehicle franchisor fails to make any
       payment required by this 1991 amendatory and
       supplementary act within the time specified for
       payment, interest shall be added to that payment at
       the rate of 12% per annum from the date payment was
       due.

This provision, by its terms, applies only to payments
required by the 1991 amendatory and supplementary act.
It does not apply to Liberty's claim to recover a payment
required by N.J. Stat. Ann. S 56:10-15(a), which was
codified in 1977 and is not part of the 1991 amendatory
and supplementary act. Although section 56:10-15 was
amended by the 1991 act, payments required by that
section are not payments required by the 1991 act, but are
payments required by the 1977 act.26 Liberty has not
identified, and this court cannot discern, any abuse of
discretion in the district court's determination that the
interest rates provided for in New Jersey Court Rule 4:42-
11 were equitable under the circumstances of this case.
Accordingly, we will affirm the district court's award of
prejudgment interest.
_________________________________________________________________

26. Liberty argues that the N.J. Stat. Ann. S 56:10-13.5 interest
provision
was "enacted at the same time the Legislature amended the warranty
reimbursement provision" and is found in the"same statute which
amended the NJFPA Warranty Reimbursement Act." Br. at 42; reply br.
at 16. However, the 1991 amendments to N.J. Stat. Ann. S 56:10-15 did
not affect section 56:10-15(a) but simply added section 56:10-15(c)
which is not implicated in this case. Liberty's arguments do not alter the
fact that Liberty sought payments required by a preexisting provision,
N.J. Stat. Ann. S 56:10-15(a), and not by the 1991 amendatory and
supplementary act.

                               32
F. Costs Associated With The Retail Rate Analysis

The district court awarded Liberty counsel fees and costs
associated with this litigation, but rejected Liberty's claim
for fees and costs associated with Liberty I because Liberty
was not a prevailing party in that case, which culminated
in a denial of class certification and a stipulation of
dismissal. See slip op. at 10-11. Liberty contends that the
district court erroneously excluded, as a cost associated
with Liberty I, the $26,185.15 in fees Liberty incurred in
compiling a part-by-part analysis of its retail rate over six
years. Liberty contends that, because it compiled the
analysis after the dismissal in Liberty I,"in contemplation
of and in preparation for" the instant case, and because its
counsel "reviewed the analysis as part of its litigation
strategy" and "briefed and argued" the results thereof in
this litigation, the district court should have included the
fees associated with the analysis in its fee award instead of
excluding them along with the fees arising from Liberty I.
Reply br. at 17-18; br. at 44.

While the district court did not articulate a separate
rationale for excluding the disputed fees along with the
Liberty I fees, it is readily apparent that the fees at issue
are not recoverable in this litigation. Liberty prevailed in
this litigation on the issue of whether Ford could assess the
dealer-parity surcharge to offset a retail-rate
reimbursement, an issue that did not require any
verification of Liberty's claimed retail rate. 27 Therefore the
fees incurred in compiling the retail rate analysis were not
"reasonably expended" in pursuit of the "result obtained" in
this litigation, and thus properly were excluded from the fee
award even if they were not incurred in connection with
Liberty I. Slip op. at 10-11 (citing Hensley v. Eckerhart, 

, 433, 

, 1939 (1983)). We,
_________________________________________________________________

27. Liberty arguably raised the issue of its retail rate in its Motion to
Enforce the district court's March order. In that motion, however, Liberty
contended that Ford was not entitled to demand documentation of
Liberty's part-by-part retail rates over the past six months. Thus
Liberty's
motion in no way required a detailed analysis documenting those rates
over the past six years. In any event, because Liberty was not entitled to
the relief awarded in the September 19, 1996 order, Liberty has obtained
no relief on any claim implicating the validity of its retail rates.

                               33
accordingly, will affirm the district court's exclusion of fees
associated with Liberty's retail rate analysis from its fee
award.

IV. CONCLUSION

For the foregoing reasons, we will reverse the district
court's September 19, 1996 order and will vacate and
remand for reconsideration in light of this opinion the
award of attorneys' fees in the district court's February 26,
1997 final order. We, however, will affirm in all other
respects. The parties will bear their own costs on this
appeal.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                               34