SPEEDWAY LLC VS. THE STATE OF NEW JERSEY (L-0284-17, MERCER COUNTY AND STATEWIDE), A-5496-16T1

Background

Speedway LLC (large, company-owned convenience store chain) was cited for selling gasoline below cost at a New Jersey station; Speedway sued seeking declaratory and injunctive relief challenging N.J.S.A. 56:6-2(b).
N.J.S.A. 56:6-2(b) (part of the 1938 Uniform Motor Fuels Practices Act and later 1953 Amendments) bars retail sale of gasoline below "net cost" plus "selling expenses" (defined as "all overhead and general business expense[s]").
Speedway alleged the statute violated due process (no intent-to-injure element; no meeting-competition defense), was unconstitutionally vague (terms like "net cost" and "selling expenses"), and overbroad; it also asserted civil-rights claims under 42 U.S.C. § 1983 and the New Jersey Civil Rights Act.
Trial court granted the State’s Rule 4:6-2(e) motion to dismiss; appeal followed. The Appellate Division reviewed de novo, accepting Speedway’s factual allegations as true for pleading-stage analysis.
The court placed weight on the statute’s long legislative history (1938 Act, 1952 Gasoline Study Commission, 1953 Amendments) and prior New Jersey precedent upholding related provisions regulating motor-fuel marketing.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether N.J.S.A. 56:6-2(b) violates substantive due process by lacking an intent-to-injure element or meeting-competition defense	Speedway: Absolute prohibition irrationally deprives property/liberty and forecloses innocent below-cost competition	State: Legislature rationally regulated fuel pricing to protect public interest and small retailers; rational-basis review applies	Held: Statute survives rational-basis review; not an unreasonable restraint on trade
Whether terms "net cost" and "selling expenses" are unconstitutionally vague	Speedway: Terms are ambiguous; leave regulated parties guessing; collateral estoppel based on an earlier district-court decision (Neeld) should bar State defense	State: Terms are ordinary commercial terms; businesses can ascertain meaning; Neeld is non-binding and applying collateral estoppel would be unfair	Held: Terms are sufficiently definite for persons of ordinary intelligence; vagueness claim rejected; collateral estoppel inapplicable
Whether the statute is overbroad by reaching constitutionally protected competition	Speedway: Broad prohibition sweeps in legitimate competitive below-cost sales	State: Legislature permissibly regulated an industry "affected with a public interest" to prevent harmful price practices	Held: Not overbroad; statute appropriately tailored to legitimate public-interest purpose
Whether civil-rights claims (42 U.S.C. § 1983 and NJCRA) survive absent substantive constitutional violation	Speedway: Civil-rights remedies appropriate for asserted constitutional deprivations	State: No underlying constitutional violation, so civil-rights claims fail	Held: Claims dismissed because no underlying constitutional violation was shown

Key Cases Cited

Nebbia v. New York, 291 U.S. 502 (upholding price regulation under rational-basis review)
Fried v. Kervick, 34 N.J. 68 (1961) (upholding related motor-fuel price restriction; endorsing police-power regulation for public interest)
Hutton Park Gardens v. Town Council, 68 N.J. 543 (1975) (discussing narrow scope of substantive-due-process review for economic regulation)
Paul Kimball Hospital, Inc. v. Brick Twp. Hospital, Inc., 86 N.J. 429 (1981) (statutes carry strong presumption of constitutionality)
State Farm Mut. Auto. Ins. Co. v. State, 124 N.J. 32 (1991) (facial challenges to price-control statutes are rarely sustained)
Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739 (1989) (pleading adequacy standard on motion to dismiss)