Detroit Auto Dealers Association, Inc

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IN THE; MATTER OF DETROIT AUTO DEALERS ASSOCIATION, INC., ET AI, CONSENT ORDER IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket 9189. Complaint Dec. 20, 1984-Decision, Dec. , 1986 This consent order prohibits, among other things, eleven Detroit, Mich.-area Chrysler- Plymouth associations, dealerships and dealers from conspiring to not advertise in thcclassified sections of newspapers or to not advertise vehicle prices at all. Appearances For the Commission: Dennis F. Johnson, Robert C. dones, Richard B. Smith, Richard A. Wolff, Timothy Suich and Morris Bloom. For the respondents: Howard E. O'Leary, Dykema, Gossett, Spencer Goodnow Trigg, Washington, D. DECISION AND ORDER The Commission having heretofore issued its two count complaint charging the respondents named in the complaint issued in this matter on December 20, 1984, with violation of Section 5 of the Federal Trade Commission Act, as amended, and the respondents having been served with a copy ofthat complaint, together with a notice ofcontemplated relief; and The Chrysler-Plymouth association, the Chrysler-Plymouth dealers, and the Chrysler-Plymouth individual respondents identified in Attachments A, Band C to this order, their attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order for Count II of the complaint, an admission by the identified respondents of all the jurisdictional facts set forth in the complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in Count II of such complaint, and waivers and other provisions as required by the Commission s Rules; and The Secretary of the Commission having thereafter withdrawn Count II of the complaint from adjudication in accordance with Section 3.25(c) of its Rules; and The Commission having considered the matter and having there- *CompJaintpreviously published at 108 F C. 193. Decision and Order (Chrysler-Plymouth) 108 F. T:C. upon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 3.25(0 of its Rules, the Commission hereby makes the following jurisdictional findings and enters the following order:

1. Respondent Chrysler-Plymouth dealers identified in Attachment A are all corporations with their principal places of business.located at the addresses shown in Attachment A.

2. Individual respondents identified in Attachment B are offcers of various Chrysler-Plymouth dealers, as shown in Attachment B, and as such they formulate, direct and control the acts and practices ofthe dealers for which they are offcers.

3. The respondent Chrysler-Plymouth association identified in Attachment C is an incorporated trade association for Chrysler-Plymouth motor vehicle dealers with its principal place of business located at the address shown in Attachment C. 4. The Federal Trade Commission has jurisdiction of the subject matter ofthis proceeding as it relates to Count II ofthe complaint and ofthe respondents listed in Attachments A, Band C, and the proceeding is in the public interest.

ORDER For purposes of this order, the following definitions shall apply: 1. Person means any natural person, corporation, partnership, association, joint venture, trust or any other organization or entity. but not governmental entities.

2. Dealer means any person who receives on consignment, or purchases, motor vehicles for sale or lease to the public, and any director aUicer, employee, representative or agent of any such person. 3. Other dealer means any dealer not named in this order. 4. Dealer association means any trade, civic, service, or social association whose membership is comprised primarily of dealers. 5. Detroit area means the Detroit, Michigan metropolitan area comprising Macomb County, Wayne County and Oakland County in the State of Michigan.

6. Respondent means any corporation listed in Attachment A, any individual listed in Attachment B, or any association listed in Attachment C, and the offcers, directors, representatives, agents, divisions, subsidiaries and successors and assigns of any listed corporation or association.

243 Decision and Order (Chrysler-Plymouth) It is ordered That each respondent shall cease and desist from directly or indirectly, or through any corporate or other device, entering into or continuing or carrying out any agreement, contract, combination or conspiracy with any respondent or any other dealer or dealer association in the Detroit area which has the purpose or effect of:

A. Restricting, regulating or limiting the advertising of any motor vehicle in the classified section of any newspaper or the advertising or publishing by any person of any price, term, or condition of sale of any motor vehicle, except to the extent that the restriction, regulation or limitation of such advertising is necessary for the purpose of engaging in lawful joint advertising; or B. Maintaining, adopting or adhering to any policy, act or practice that restricts, regulates or limits the advertising by any person of any motor vehicle in the classified section of any newspaper or the advertising or publishing by any person of any price, term, or condition of sale of any motor vehicle, except to the extent that the restriction regulation or limitation of such advertising is necessary for the purpose of engaging in lawful joint advertising. II.

It is further ordered That each respondent shall cease and desist from, directly or indirectly, or through any corporate or other device, performing any of the following acts or practices, or encouraging any person to perform any of the following acts or practices, or entering into or continuing or carrying out any agreement, contract, combination or conspiracy with any other person in the Detroit area to do or perform any of the following acts or practices: A. Requesting, recommending, coercing, influencing, encouraging or persuading, or attempting to request, recommend, coerce, influence, encourage or persuade, any other respondent or any other dealer in the Detroit area to maintain, adopt or adhere to any policy, act or practice that restricts, regulates or limits the advertising by any person of any motor vehicle in the classified section of any newspaper or the advertising or publishing by any person of any price, term, or condition of sale of any motor vehicle, except to the extent that the restriction, regulation or limitation of such advertising is necessary for the purpose of engaging in lawful joint advertising; or B. Requesting, recommending, coercing, influencing, encouraging or persuading, or attempting to request, recommend, coerce, influ- !.

Decision and Ordcr1Chrysler-Pi"ymouthJ 108 F. ence, encourage or persuade, any other respondent or any other dealer in the Detroit area to change his advertised or published prices. III.

It is further ordered That nothing contained in Parts I or II above shall be construed to prohibit: (a) any respondent association from formulating, adopting, disseminating to its members, and enforcing lawful guidelines governing the conduct of its members with respect to advertisements that such respondent association reasonably believes would be false or deceptive within the meaning of Section 5 of the Federal Trade Commission Act; (b) any other respondent from participating in such activities as identified in Subpart (a) of an association of which such respondent is a member; or (c) any respondent from informing or advising anyone regarding what the respondent reasonably believes to be the requirements of any other existing or proposed federal, state, or local law, regulation, or order, or publishing such interpretations thereof.

IV.

It is further ordered That the respondent association listed in Attachment C shall cease and desist from failing to maintain for five (5) years following the taking of any action against a person alleged to have violated any advertising guidelines as described in Part III of this order, in a separate fie segregated by the name of any person against whom such action was taken, any document that embodies, discusses, mentions, refers, or relates to the action taken and any allegation relating to it.

It is further ordered That the respondent association listed in Attachment C shall:

A. Within sixty (60) days ofthe date this order becomes final, amend its by-laws to incorporate by reference this order, and provide each member with a copy of this order and the amended by-laws; B. For three (3) years from the date this order becomes final, provide each new member with a copy of this order and the amended by-laws within thirty (30) days of the new member s admission to the association.

243 Decision and Order (Chrysler-Plymouth) VI.

It is further ordered That, for a period of three (3) years from the date this order becomes final, the respondent association listed in Attachment C shall notify the Commission at least sixty (60) days prior to the adoption of any advertising guidelines as described in Part III of this order.

VII.

It is further ordered That each respondent shall, within. sixty (60) days after this order becomes final, and then annually thereafter for a period of three (3) years, fie with the Commission a report, in writing, signed by the respondent, setting forth in detail the manner and form in which it has complied with this order. VII.

It is further ordered That each corporate respondent shall notify the Commission at least thirty (30) days prior to any proposed change in that corporate respondent, such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in that corporate respondent that may affect compliance obligations arising out of this order. In the case of each natural person respondent named herein for a period ofthree (3) years from the date this order becomes final said respondent shall promptly notify the Commission of the discontinuance of his present business or employment and of any new affiiation or employment with any dealer or dealer association. Such notice shall include the respondent's new business address and a statement of the nature of the business or employment in which said respondent is newly engaged, as well as a description of the respondent' s duties and responsibilities in connection with the business or employment.

Decision and Order (Chrysler-Plymouth) l08F:T. ATTACHMENT A Birmingam Chrysler-Plymouth, Inc. Bil Snethkamp, Inc. 2100 West Maple Road 16430 Woodward Avenue Troy, Michigan 48084 Highland Park, Michigan 48006 Lochmoor Chrysler-Plymouth, Inc. Thompson Chrysler-Plymouth, Inc. 18165 Mack Avenue 16225 Fort Street Detroit, Michigan 48224 Southgate, Michigan 48195 Shelby Oil Company, Inc. Westborn Chrysler-Plymouth, Inc. d/b/a Monicatti Chrysler-Plymouth Sales 23300 Michigan A venue 40755 Van Dyke Avenue Dearborn, Michigan 48124 Sterling Heights, Michigan 48078 Rosevile Chrysler-Plymouth, Inc.

25800 Gratiot A venue Rosevile, Michigan 48006 ATTACHMENT B Robert M. Brent Wiliam Snethkamp Warren Chrysler-Plymouth, Inc. Bill Snethkamp, Inc. 32711 Van Dyke Avenue 16430 Woodward Avenue Warren, Michigan 48093 Highland Park, Michigan 48023 James Riehl Roseville Chrysler-Plymouth, Inc.

25800 Gratiot Avenue Rosevilc, Michigan 48006 ATTACHMENT C Chrysler-Plymouth Dealers Association of Greater Detroit, Inc. 32711 Van Dyke Warren, Michigan 48093