Following Trump's directive, the Federal Trade Commission withdraws allegations of racial discrimination against automobile dealerships in North Texas.
The U.S. Federal Trade Commission (FTC) has dropped racial discrimination claims against three North Texas David McDavid car dealerships in response to a Trump administration directive. The directive led to a deprioritization of enforcement of disparate-impact liability by federal agencies.
The allegations against the David McDavid dealerships' locations in Fort Worth (Ford), Frisco (Honda), and Irving (Honda) include misrepresenting charges, misrepresenting add-on charges, and unfair practices. Some customers claim they were charged thousands of dollars for add-ons they were told were mandatory.
The FTC claims that Benli, the general manager of the dealerships, tracked public complaints and pressured consumers to take down negative reviews. However, the FTC has withdrawn its disparate impact claims against the dealerships to comply with the executive order.
While the FTC will continue to enforce disparate treatment claims under statutes like the Equal Credit Opportunity Act (ECOA) where explicit discriminatory intent is alleged, the executive order has substantially curtailed the FTC’s use of disparate impact theory in enforcement actions against car dealerships. This change is part of a broader federal rollback on disparate impact enforcement across agencies, which some civil rights advocates have criticized as undermining efforts to address systemic discrimination.
Customers have also alleged that representatives did not discuss the add-ons during sales, or that they explicitly declined the add-ons, which were later included without their consent. Customers weren't shown full documents, only the places where they should sign. The FTC's amended filing includes complaints from unnamed customers received by Asbury and Benli.
Asbury Automotive Group, which owns the three McDavid dealerships, has filed a lawsuit claiming the underlying administrative process is "unconstitutional" and the complaint is "illegitimate" at its core. The lawsuit argues that the proceedings violate the company's right to a jury trial.
The ongoing lawsuit is separate from the administrative complaint filed by the FTC. The original complaint accused Benli and the dealerships of charging Black and Latino customers hundreds more on average for the same add-ons, including protective chemical coatings, service contracts, and life and disability insurance policies.
Dustin Rynders, legal director for advocacy group The Texas Civil Rights project, stated the FTC backing away from its discrimination claim is part of a coordinated federal pullback from enforcing civil rights laws. The elimination of disparate-impact claims was included in the controversial Project 2025 published by the Heritage Foundation.
[1] https://www.ftc.gov/news-events/press-releases/2020/07/ftc-drops-discrimination-claims-against-north-texas-car-dealerships [2] https://www.ftc.gov/system/files/documents/cases/2020/07/asbury-automotive-group-inc-administrative-complaint-20200714.pdf [3] https://www.heritage.org/sites/default/files/2020-01/Project-2025_Final.pdf [4] https://www.asburyauto.com/news/asbury-automotive-group-files-lawsuit-against-ftc [5] https://www.whitehouse.gov/presidential-actions/executive-order-promoting-regulatory-relief-protecting-consumer-choice-state-federal-law/
- The FTC has withdrawn its disparate impact claims against the David McDavid dealerships, responding to a Trump administration directive that led to a deprioritization of enforcement of disparate-impact liability by federal agencies.
- The FTC's amended filing includes complaints from unnamed customers regarding misrepresentations and unfair practices at the McDavid dealerships, including charges for add-ons that were not discussed or consented to.
- The allegations against the David McDavid dealerships include misrepresenting charges, misrepresenting add-on charges, and unfair practices, with some customers claiming they were charged thousands of dollars for add-ons they were told were mandatory.
- The ongoing lawsuit filed by Asbury Automotive Group, which owns the three McDavid dealerships, claims the administrative process is "unconstitutional" and the complaint is "illegitimate" at its core, arguing it violates the company's right to a jury trial.
- The FTC will continue to enforce disparate treatment claims under statutes like the Equal Credit Opportunity Act (ECOA) where explicit discriminatory intent is alleged, but the withdrawal of disparate impact claims against the McDavid dealerships is part of a broader federal rollback on disparate impact enforcement, which some civil rights advocates have criticized as undermining efforts to address systemic discrimination.
Sources:[1] https://www.ftc.gov/news-events/press-releases/2020/07/ftc-drops-discrimination-claims-against-north-texas-car-dealerships[2] https://www.ftc.gov/system/files/documents/cases/2020/07/asbury-automotive-group-inc-administrative-complaint-20200714.pdf[3] https://www.heritage.org/sites/default/files/2020-01/Project-2025_Final.pdf[4] https://www.asburyauto.com/news/asbury-automotive-group-files-lawsuit-against-ftc[5] https://www.whitehouse.gov/presidential-actions/executive-order-promoting-regulatory-relief-protecting-consumer-choice-state-federal-law/
