Online car-pricing website TrueCar Inc. has hit a bump in the road that could force it to comply with many of the same rules as traditional car dealers.
A Los Angeles Superior Court judge has cleared the way for a lawsuit against the Santa Monica company to go to trial. Initially filed by the California New Car Dealers Association in May of last year, the suit alleges that TrueCar violates California Vehicle Code by illegally operating as a car dealer and broker.
“They are able to do things in a way that our licensed dealers cannot,” said Brian Maas, president of the association. “And that’s not fair.”
Licensed car dealers have to abide by environmental laws, contract regulations, and other rules, which TrueCar can sidestep by claiming it’s not a broker, said Maas.
Shoppers go to the TrueCar website to check out car prices at local dealerships, secure a sale price online, and then bring a certificate into the dealer to purchase the vehicle. TrueCar gets paid a fee whenever someone buys a car with the help of its marketplace at one of the more than 13,000 dealerships the company partners with.
TrueCar has disputed the claims and called the judge’s decision completely unremarkable.
“TrueCar remains confident that its business model complies fully with California law and it looks forward to being fully vindicated,” the company said in a statement.
TrueCar has had a rough few years. After raising $70 million in a May 2014 IPO priced at $9 a share, its value peaked at more than $24 a share. It tumbled last year, however, and its share price bottomed out at $4.79 in August. The slide came as the car dealers association, which represents 1,200 new-car dealerships in California, filed its initial complaint against TrueCar in May 2015. That was followed in July of last year with the cancellation of its contract with Auto Nation, the largest car dealer in the United States and the August announcement by founder and Chief Executive Scott Painter that he would step down by the end of last year.
Transnational Law Center
USC’s Gould School of Law has launched a center aimed at training attorneys to navigate an increasingly complex global business economy. The USC Center for Transnational Law and Business will be led by director Brian Peck, who previously served as deputy director of international affairs and business development for Gov. Jerry Brown and has worked as a USC adjunct professor for the past seven years.
Peck said the center will focus on teaching new generations of attorneys how to navigate international trade and compliance policies, and will bring together trade and business law and policy to discover better ways for companies to conduct business across borders.
“This is an area that needs (an) increasing amount of attention, but at this point there’s been very little first-rate scholarship in this area,” said Peck.
He was to assume his new role on Nov. 15 and said he’ll spend the first few months developing the program, including a comprehensive curriculum of classes that will launch next fall. A limited number of classes will be available in the spring.
The center will also serve as a forum for debate, discussion, and development of new policies in the field of transnational business law.
“The mission of the center is to engage in cutting-edge research in the area of international law and business and to bring academics, business people, lawyers, and government officials together to discuss and debate the most important topics in the field,” Andrew Guzman, dean of the law school, said in a statement.
The law center will host a conference in January that addresses international antitrust issues, specifically those faced by tech companies. Scheduled to participate are a U.S. Federal Trade Commission commissioner and trade representatives from Japan and Canada.
Legal Landscape
Latham & Watkins released its annual list of employee promotions this month. John C. Heintz, Jordan A. Miller, and Winston P. Stromberg were promoted to partner, and Brian Duff and Ghaith Mahmood were named counsel, all in the downtown office. The firm also announced the recent hiring of Christopher Shoff – previously of Cooley – who joins as a partner in its emerging companies practice. … Mark Sayre, founding partner at Valorem Law Group, has made the jump to downtown’s Foley & Mansfield. An asbestos litigator, Sayre will work as a trial lawyer focusing on product liability and toxic and mass tort litigation. … Liner, a Westwood-based, business-focused law firm, has acquired a litigation team from the L.A. office of Milbank Tweed Hadley & McCloy. Delilah Vinzon is joining as a partner, Ashlee Lin as senior counsel, and Ryan Austin as an associate. Milbank is handling Bill Cosby’s defense in California, Massachusetts, and Pennsylvania civil cases relating to sexual misconduct allegations.
