Asbury Automotive Group (ABG) Sues to Block Administrative Proceeding by the FTC

Asbury Automotive Group (NYSE: ABG) today announced the filing of a lawsuit on October 4, 2024 in the United States District Court for the Northern District of Texas challenging as unconstitutional an administrative proceeding filed against Asbury by the Federal Trade Commission (“FTC”). In August, Asbury rejected as false and unfounded an FTC complaint that three Asbury dealerships in the Dallas-Ft. Worth area sold protection products to customers that the customers did not agree to buy.

The lawsuit Asbury filed in Texas seeks to enjoin the FTC’s administrative proceeding in that case on constitutional grounds. Among other things, Asbury’s lawsuit asserts that the FTC’s administrative proceeding violates Asbury’s constitutional rights by denying it the right to a jury trial and by allowing the FTC to serve as both prosecutor and judge in the same proceeding. Asbury’s lawsuit also contends that FTC commissioners and in-house administrative law judges are effectively insulated from removal by the President in contravention of the Constitution’s requirements.

Similar cases have been filed in federal courts to stop administrative proceedings conducted by federal agencies following the United States Supreme Court’s decision earlier this year in Securities and Exchange Commission (SEC) v. Jarkesy. In that case, the Supreme Court reaffirmed a defendant’s right to a jury trial, holding that the SEC could not use an internal administrative proceeding overseen by its own in-house administrative law judge to sidestep the requirements of the Constitution’s Seventh Amendment. Asbury asserts in its lawsuit that the Supreme Court’s holding in Jarkesy applies to administrative proceedings conducted by the FTC as well.

“The Supreme Court this year placed limits on the authority of executive branch agencies. One result is that agencies like the Federal Trade Commission can no longer operate as both judge and jury. In its lawsuit filed today, Asbury is seeking nothing more than the fair administration of justice and looks forward to making its case in federal court,” said Ed Burbach, counsel for Asbury and a partner of Foley & Lardner LLP in Austin, Texas.

For inquiries and information, visit https://investors.asburyauto.com/ftc.

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