The opinion of the court was delivered by: Michael A. Telesca United States District Judge
Plaintiffs Webster Chrysler Jeep, Inc., ("Webster") and Randy Henderson ("Henderson") as President of Webster, bring this action against defendants Chrysler Holding LLC, Chrysler, LLC, Daimlerchrysler Financial Services Americas LLC, Chrysler Motors LLC, and Chrysler Realty Company LLC pursuant to the Automobile Dealer's Day in Court Act ("ADDCA"), codified at 15 U.S.C. §§ 1221-1226, the Equal Credit Opportunity Act ("ECOA"), codified at 15 U.S.C. §§ 1691-1691f, and several state statutory and common law causes of action claiming that the defendants, inter alia, attempted to wrongfully terminate the plaintiffs' motor vehicle franchise.
Plaintiffs commenced this action on November 25, 2008. Thereafter, defendants Chrysler, LLC, Chrysler Motors LLC, and Chrysler Realty Company LLC, filed for Chapter 11 bankruptcy in the Southern District of New York. Defendants Chrysler Holding LLC, and Daimlerchrysler Financial Services Americas LLC are not parties to the bankruptcy proceedings.
Defendant Chrysler Holding LLC, ("Chrysler Holding" or "defendant") now moves to dismiss plaintiffs' Amended Complain on grounds that the Amended Complaint fails to state a claim against Chrysler Holding. Specifically, Chrysler Holding contends that it is not a proper defendant for purposes of plaintiffs' ADDCA claim because it was not a party to the franchise agreement entered into by the plaintiffs. The defendant claims that as a matter of law, it can not be held liable under the ADDCA because it was not a party to any agreement with the plaintiffs. Chrysler Holding further claims that it may not be held liable to the plaintiffs under the ECOA because it is not a creditor of the plaintiffs. Finally, defendant contends that the plaintiffs have failed to state any claim against it under state statutory or common law, and that in any event, because the court lacks original jurisdiction over Chrysler Holding, the court should dismiss the pending state claims against it.
Plaintiffs oppose defendant's motions on grounds that Chrysler Holding, as the parent company of the other named defendants, is liable to the plaintiffs as a principal under an agency theory. Plaintiffs further argue that because no discovery has taken place, and because the various Chrysler defendants and entities have complex interrelationships, it is impossible at this stage of the litigation to know exactly what role Chrysler Holding played with respect to any franchise or finance agreements entered into by the defendants with the plaintiffs, and therefore the plaintiffs should be allowed to engage in discovery to ascertain Chrysler Holding's role in allegedly attempting to wrongfully terminate the plaintiffs' dealership.
For the reasons set forth below, I find that defendant Chrysler Holding is not an "automobile manufacturer" as that term is defined under the ADDCA, and may not be held liable as a principal of any agent automobile manufacturer, and therefore, Chrysler Holding is not a proper defendant under the ADDCA. I further find that Chrysler Holding is not a creditor for purposes of the ECOA and may not be held liable as a principal of any agent creditor, and therefore, Chrysler Holding is not a proper defendant under the ECOA. Finally, I dismiss plaintiff's state law causes of action against Chrysler Holding for lack of subject matter jurisdiction over Chrysler Holding.
According to the Amended Complaint, Plaintiff Webster Chrysler Jeep, Inc., became a franchised Chrysler dealer in 1991 by entering into a franchise agreement with defendant Chrysler Motors, LLC. In 2002, Webster entered into a Master Loan Security Agreement with Chrysler Financial, a predecessor of defendant DaimlerChrysler Financial Services Americas, LLC. The Amended Complaint alleges that in 2007, a private investment group purchased an 80.1% ownership in "Chrysler," and thereby became the 100% owner of the defendant companies named in this action. Plaintiffs allege that the private investment group created a new company, defendant Chrysler Holding, LLC., which became the parent company of the named defendants.
The plaintiffs allege that the defendants collectively undertook a scheme to illegally consolidate dealerships around the country in violation of the individual dealer's franchise agreements, and federal law. Plaintiffs also claim that the defendants collectively undertook a scheme to extract money from dealerships, including Webster, by altering financing agreements or enforcing provisions which heretofore had never been enforced, thus creating financing defaults by dealers, including Webster, where previously there had been no financing problems.
The plaintiffs further allege that various Chrysler defendants interfered with Henderson's attempt to sell Webster to another dealer or to obtain third-party investments, and improperly froze Webster's line of credit for new and used car purchases. Plaintiffs contend that the Chrysler defendants were improperly attempting to force Henderson to sell his dealership at great loss or to simply relinquish his dealership.
DISCUSSION I. Standard of Review
In reviewing a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must "accept...all factual allegations in the complaint and draw...all reasonable inferences in the plaintiff's favor." See Ruotolo v. City of New York, 514 F.3d 184, 188 (2d Cir.2008) (internal quotation marks omitted). In order to withstand dismissal, the complaint must plead "enough facts to state a claim to relief that is plausible on its face." See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974 (2007) (disavowing the oft-quoted statement from Conley v. Gibson, 355 U.S. 41 (1957), that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief").
"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." See id. at 1965 (internal quotation marks omitted). Moreover, conclusory allegations are not entitled to any assumption of truth, and therefore, will not support a finding that the plaintiff has stated a valid claim. Hayden v. Patterson, 594 F.3d 150, 161 (2nd Circ., 2010). Thus, "at a bare minimum, the operative standard requires the 'plaintiff [to] provide the grounds upon which his claim rests through ...