The recent Supreme Court ruling to eliminate the Chevron Doctrine has significant implications for how administrative rules are challenged. This decision could impact the ongoing challenge to the FTC’s CARS rule by the National Automobile Dealers Association (NADA) and Texas auto dealers. Here’s an overview of what this change means for the auto industry.
What is Chevron Deference?
The Chevron Doctrine, established in the 1980s, required courts to defer to federal agencies’ interpretations of ambiguous laws. This made it difficult to overturn agency rules and strengthened what’s known as the “administrative state.”
What Has Changed?
The Supreme Court has now ruled that challenges to administrative rules should be judged by the same standard as other legal challenges. This means that courts will no longer automatically side with agencies if their rules are contested. Instead, challengers only need to prove their case to have a rule overturned.
Impact on the Auto Industry
NADA and Texas auto dealers are currently challenging the FTC’s CARS rule in the Fifth Federal Circuit. With the elimination of Chevron Deference, the standard for challenging this rule is now more favorable to those opposing it. While there is no guarantee of a specific outcome, the case is expected to receive increased scrutiny and media attention.
Impact on Colorado Auto Dealers
To learn more about Chevron Deference and how it affects dealers, watch the video below where Matthew Groves, President and CEO at the Colorado Auto Dealers Association, explains the the details and the steps dealers need to take.
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About The Colorado Auto Dealers Association (CADA)
Founded in 1933 and officially incorporated in 1938, the Colorado Automobile Dealers Association (CADA) began as a collective effort by dealers to contest a federal excise tax. Today, CADA is a dynamic trade association dedicated to advocating for the interests of Colorado’s auto dealers. It addresses legislative, regulatory, and operational challenges, ensuring that the state’s automotive sector and driving public are well-represented and supported.
CADA keeps dealers well-informed through various channels, including our publications, such as Above the Fold, the Bulletin, and our LinkedIn updates. CADA also provides essential resources to help dealers understand new legislation and industry trends, especially after the legislative session concludes each May.