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Inside the Legal Battle Over the CARS Rule

Scene depicting a legal battle over the FTC's CARS Rule in a courtroom setting with lawyers, judges, and legal documents, representing the high stakes and complexity of the regulatory challenge.

On January 4th, 2024, just one day after the publication of the CARS Rule, the National Automobile Dealer Association (NADA) took swift action by filing litigation against the Federal Trade Commission (FTC) alongside the Texas Automobile Dealer Association (TADA).

This legal battle, as revealed by James Ganther, in his keynote at Agent Summit 2024, sheds light on the complexities and stakes involved in challenging regulatory measures in the automotive industry.

NADA Challenges the CARS Rule

NADA, representing dealerships nationwide, has taken a strong stance against the CARS Rule. They filed a petition for review, aiming to overturn the rule entirely. Additionally, they requested a stay on the rule's enforcement, originally set for July 30th, 2024, and expedited consideration of the case.

FTC Opposes Stay, Setting Stage for Legal Battle

The FTC contested NADA's motion for stay, signaling their unwavering support for the CARS Rule. This move positioned both parties for a head-to-head legal clash, with NADA and TADA intensifying their arguments against the rule.

Unexpected Turn: FTC Voluntarily Stays Enforcement

In a surprising turn of events, the FTC voluntarily postponed enforcement of the CARS Rule on the day they were due to submit their opposing brief. This unexpected move sparked speculation about the FTC's motives.

Expert Opinions: NADA Gains Advantage, But Outcome Uncertain

According to Ganther, NADA's attorney Paul Metrey suggests the FTC's decision might be a strategic maneuver. By staying enforcement themselves, the FTC may be attempting to avoid a potential legal defeat and maintain a positive image.

High Stakes for the Automotive Industry

While NADA currently seems to hold the upper hand, the ultimate outcome remains unclear. Both sides are preparing for a legal battle that could significantly impact the automotive industry, shaping the future of car sales and consumer protection regulations.

Stay Informed: The Legal Saga Continues

The legal battle surrounding the CARS Rule is far from over. This blog will be updated with further developments as this saga unfolds. Stay tuned to learn how this fight for regulatory clarity and fairness in car sales plays out.

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