A Los Angeles Superior Court judge has ruled that the California New Car Dealers Association’s lawsuit against TrueCar Inc. of Santa Monica will go forward.
The CNCDA sued TrueCar in May 2015 alleging the company has flouted California state law by operating as an auto dealer and broker without a license. TrueCar denies that it needs a license and was seeking an injunction to stop the lawsuit from moving forward.
Judge Nancy Newman found that the complaint properly states a legal claim for violation of the California Unfair Competition Law.
TrueCar’s Chief Risk Officer Johnny Stephenson offered his assessment of the ruling in an emailed statement.
“The court has simply concluded that further information is necessary before the (state law claims) can be resolved,” he said.
Dealerships have in the past boycotted TrueCar, fearing its business model encouraged price wars among dealers vying to underbid each other.
Last week, TrueCar Chief Executive Chip Perry rolled out changes including revised marketing language and billing practices designed to better serve the company’s dealer customers.