Dealerships Challenge FTC's Unconstitutional Tactics in Discrimination Probe

A group of North Texas car dealerships have filed a lawsuit against the Federal Trade Commission (FTC), alleging that the agency's administrative process to accuse three dealerships of unethical and discriminatory sales practices against Black and Hispanic customers is unconstitutional. The dealerships, owned by Asbury Automotive Group, claim the FTC has refused to name the customers who were allegedly harmed or provide evidence of any complaints made.

Uncovering the Dealerships' Fight Against the FTC's Overreach

Allegations of Discriminatory Practices

The FTC has filed an administrative complaint against Asbury Automotive Group, which owns three David McDavid dealerships in North Texas, and their general manager, Ali Benli. The agency alleges that the dealerships saddled customers with hidden fees for unwanted add-on products and charged Black and Hispanic customers hundreds more on average for these same add-ons.

Asbury's Countersuit: Challenging the FTC's Unconstitutional Tactics

In response, Asbury has filed a lawsuit in the U.S. Northern District of Texas, claiming that the FTC's underlying administrative process is unconstitutional. The dealership group argues that the FTC has refused to name the customers who were allegedly harmed or provide evidence of any complaints made, violating the company's right to due process.

Asbury's Allegations of FTC Overreach

According to the lawsuit, the FTC brought the complaint after Asbury refused to agree to a proposed consent order that would have prevented the dealerships from selling some protective car products supplied by third parties. The order also would have required Asbury to pay "an exorbitant payment" to stop the FTC from putting out a press release and filing the administrative claims.

Challenging the FTC's Administrative Process

Asbury alleges that the FTC's actions violate the Constitution because the commission is attempting to settle issues of private rights in an administrative proceeding, rather than in a court of law. The dealership group also claims that the proceedings violate its right to a jury trial, as the evidentiary hearing over the FTC's allegations is scheduled to be a non-jury trial.

Concerns Over the FTC's Enforcement Methodology

The FTC's own commissioners have expressed concerns about the agency's methods in this case. Commissioner Melissa Holyoak cautioned the FTC to "tread carefully" in the methods it's using to make a case against the car dealerships, and Commissioner Andrew N. Ferguson wrote that the FTC's "novel theory" in the Asbury case was not included in a similar settlement with another dealership, suggesting the agency may not want a court to scrutinize its approach.

Asbury's Demand for Transparency and Due Process

Asbury's lead attorney, Ed Burbach, has denied the allegations of deceitful and racially discriminatory practices by the dealerships. He has called on the FTC to provide proof of the methods and surveys it used to build its case, arguing that if the allegations were true, any injured consumers would have been compensated long ago.Overall, the dispute between Asbury Automotive Group and the FTC highlights the ongoing tension between businesses and regulatory agencies, as well as the importance of upholding constitutional principles and due process in the enforcement of consumer protection laws.