Fifth Circuit Court of Appeals Vacates FTC CARS Rule

The U.S. Court of Appeals for the Fifth Circuit ordered the FTC to vacate the CARS rule, finding the agency did not issue proper notice of the rule change.

“The FTC violated section 706(2) of the APA when it elected to issue an ANPRM before publishing the final CARS Rule, a requirement of its own regulations and an error that was not harmless. We GRANT the petition for review and VACATE the CARS Rule,” the court stated.

“The FTC asserts that even if the Commission was required to publish an ANPRM, its failure to do so was ultimately harmless error,” two of the judges on the three-judge panel wrote. “We disagree.”

The NIADA states, “We support transparency and fairness in vehicle sales, which are already heavily regulated without the additional requirements of the CARS rule. We look forward to continuing conversations with the FTC on issues related to our industry. NIADA will continue to advocate on behalf of its members and keep you abreast of issues as they arise.”

Your membership in GIADA and NIADA makes this type of advocacy possible, protecting your livelihood and the industry.

Read the ruling here: https://www.ca5.uscourts.gov/opinions/pub/24/24-60013-CV0.pdf