On October 4, 2024, Asbury Automotive Group, a Fortune 500 company and one of the largest automobile dealer groups in the United States, sued the Federal Trade Commission (FTC) to enjoin as unconstitutional the FTC's administrative proceeding against Asbury over alleged junk fees and discriminatory lending practices. The administrative complaint filed by the FTC against Asbury in August 2024 alleged that three Texas dealerships owned by Asbury "systematically" packed junk fees into the cost of the vehicles it sold to consumers and discriminated against Black and Latino consumers by targeting them with unwanted and higher-priced add-ons.
Asbury's complaint against the FTC, filed in federal court in Texas, seeks preliminary and permanent injunctive relief "to prevent irreparable harm to [Asbury's] business, reputation, and constitutional rights—including [Asbury's] rights to due process and trial by jury." Asbury contends the FTC's administrative proceedings is unconstitutional for several reasons. First, Asbury alleges that the FTC seeks to adjudicate private rights—e.g., whether Asbury may sell third-party products like surface protective coatings or the terms on which it may extend credit—in an administrative proceeding in violation of Article III of the U.S. Constitution. Second, Asbury argues the FTC proceeding violates its Seventh Amendment right to a jury trial, because the FTC seeks to adjudicate claims akin to common law fraud and deceit, and its due process rights, because the FTC has allegedly denied Asbury sufficient notice of the factual basis for its claims. Finally, Asbury contends the statutory constraint placing FTC commissioners beyond presidential removal power renders the administrative proceeding unconstitutional.
The FTC's action against Asbury follows settlements reached with other auto dealers over the past couple of years for similar practices, but Asbury's lawsuit against the FTC suggests that U.S. car dealers may be inclined to push back. In addition to Asbury's lawsuit, the National Automobile Dealers Association (NADA) in January 2024 filed a lawsuit challenging the FTC's adoption of its "Combating Auto Retail Scams" (CARS) Rule targeting allegedly misleading advertising and sales tactics by new car dealers. The FTC has since paused the effective date of the final CARS Rule pending resolution of that protest, with the Fifth Circuit slated to hear the challenge on October 9, 2024.
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