A group of North Texas car dealerships says the Federal Trade Commission is pursuing an unconstitutional administrative process to accuse three dealerships of unethical and discriminatory sales practices against Black and Hispanic customers, according to a lawsuit filed Friday.
The FTC filed an administrative complaint against Asbury Automotive Group 鈥� which owns three David McDavid dealerships in North Texas 鈥� and general manager Ali Benli in August for allegedly saddling customers with hidden fees for unwanted add-on products. Benli and the dealerships allegedly charged Black and Hispanic customers hundreds more on average for those same add-ons.
But in a lawsuit filed Oct. 4 in the U.S. Northern District of Texas, Asbury alleges the underlying administrative process is unconstitutional because, among other reasons, the FTC has refused to name the customers who were harmed by the practices or show evidence of any complaints made.
鈥淭he injury here simply arises from the fact that the Asbury Plaintiffs are being subjected to a constitutionally infirm proceeding,鈥� the suit states. 鈥淥nce the harm is done, it cannot be undone. Any subsequent judicial review of the Asbury Plaintiffs鈥� claims would come too late in the game to be meaningfully remedied.鈥�
Asbury wants a federal judge to stop the administrative process from moving forward until the merits of the company鈥檚 new countersuit are decided. An FTC spokesperson said the commission currently has no comment on the suit.
The FTC issues administrative complaints when it has reason to believe the law is being violated and a proceeding is in the public interest. The FTC alleged wrongdoing at three David McDavid locations: the Ford location in Fort Worth, the Honda location in Frisco and the Honda location in Irving.
Ed Burbach, the lead attorney for Asbury Automotive, denied the allegations of deceitful and racially discriminatory practices by the dealerships. If the FTC moves forward with its claims, Burbach said the agency needs to provide proof of the methods and surveys it used to build its case.
"I think if they would have done it that, by now, if the allegations were as they claimed they are, any injured consumers 鈥� if anybody 鈥� would have been taken care of a long time ago," he said.
According to the lawsuit, the FTC brought the complaint after Asbury didn鈥檛 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 鈥渁n exorbitant payment鈥� to stop the FTC from putting out a press release and filing the administrative claims, according to the lawsuit.
Asbury says the FTC鈥檚 actions violate the Constitution because the commission is attempting to settle issues of private rights in an administrative proceeding. The proceedings also violate the company鈥檚 right to a jury trial, Asbury alleges 鈥� the evidentiary hearing over the FTC鈥檚 allegations, scheduled for April 16, 2025, would be a non-jury trial.
Administrative Law Judge Dania Ayoubi can鈥檛 be removed from Asbury鈥檚 case , and only the president from the FTC if there's 鈥渋nefficiency, neglect of duty, or malfeasance in office.鈥�
This unconstitutionally protects the people presiding over the process, Asbury argues.
鈥淭he result is that enforcement actions that can have wide-ranging impacts on the American economy are currently taken by unelected individuals that are not controlled by the President,鈥� the suit states.
The FTC voted unanimously to bring the complaint against Asbury, but two commissioners issued statements with further commentary at the time. Commissioner Melissa Holyoak in the methods it鈥檚 using to make a case against the car dealerships.
鈥淚n guidance to the public鈥攁nd, when it would not compromise our enforcement, during pre-litigation discussions with potential defendants鈥攖he Commission and Commission staff should be clear about the methodology the Commission uses to assess liability under (the Equal Credit Opportunity Act),鈥� Holyoak wrote. 鈥淟ack of awareness of agency enforcement methodology can lead to significant backlash.鈥�
that while the FTC settled similar claims against Coulter Motor Company for violating Section 5 of the Federal Trade Commission Act earlier this year, Asbury made it clear that the company would challenge the FTC in court.
鈥淭he reader can do the math,鈥� Ferguson wrote. 鈥淭he majority has advanced its novel theory in a case no court will decide but omitted it from a proceeding that could very well go to court. The only inference to draw is that the majority does not want a court to look under the hood of its new Section 5 theory.鈥�
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