When the Rule first was promulgated, the effective date was July 30, 2024. However, the FTC has since stayed that effective date after the National Auto Dealers Association and the Texas Auto Dealers Association filed a Petition for Review of the Review and a Motion to Stay the Rule.
June 19, 2024
By Barrie Charapp Beaty
Charapp & Weiss, LLP
bbeaty@cwattorneys.com
This month’s CARS COLUMN reminds us that the FTC’s CARS Rule, also known as the Vehicle Shopping Rule, does not go into effect next month.
When the Rule first was promulgated, the effective date was July 30, 2024. However, as you know, the FTC has since stayed that effective date after the National Auto Dealers Association and the Texas Auto Dealers Association filed a Petition for Review of the Review and a Motion to Stay the Rule in the United States Court of Appeals for the Fifth Circuit.
The NADA and TADA requested that the court vacate or modify the Rule and stay its enforcement until pending resolution of the case. NADA and TADA have argued that the FTC failed to follow proper federal procedure to give adequate notice of the Rule to the public and in issuing the Rule, failed to do an adequate cost analysis to demonstrate a justifying need for the Rule, and failed to identify a rational connection to the evidence for the Rule prior to issuing it in December.
Although the parties have completed all briefings in the matter as of June 2024, the court has not ruled on the Petition. The Court proceeding will determine if the Rule is revoked or modified by the Court order or if the Court finds in favor of the FTC. Due to the fact that the court has not ruled, it is unknown if the Rule will go into effect and if it will, when.