The Greater New York Automobile Dealers Association ("GNYADA") and the New York State Automobile Dealers Association ("NYSADA") separately met with representatives of the New York City Department of Consumer Affairs ("DCA") to address the subpoenas mailed to 200 new and used car dealers alleging possible violations of consumer protection laws from the sale of used vehicles subject to open recalls.  At these meetings GNYADA and NYSADA pointed out that federal, state and NYC laws/regulations do not explicitly prohibit dealers from selling used vehicles with open recalls.  However, DCA argued that vehicles sold with open recalls are illegal based upon the fact that the vehicle is not "roadworthy".

      GNYADA and NYSADA each asked for additional time for dealers to respond to the subpoenas and this request is currently under consideration.  DCA, however, still plans to move forward with the review of the documents and issue fines to dealers who they determine are not in compliance with their interpretation of the law.  Therefore, regardless of whether the deadline is September 4, 2014 or a later to be determined date DCA will require the dealers who received the subpoenas to submit the requested documents.

      This leaves dealers with only two choices; comply or fight.  In order to comply dealers will have to submit the requested documents and enter into a Consent Order with DCA that will likely involve a monetary fine plus a representation that the dealer will agree to:

1. Check all used vehicles for open recalls at the time of delivery;
2. Suspend the sale and delivery of any vehicle subject to an open recall; and
3. Send letters to customers who purchased a used vehicle subject to an open recall within the past year (or possibly longer) and offer to resolve the open recall issue at no charge.     

The alternative is to file a motion to quash the subpoena in court along with another motion seeking to stay the enforcement of the subpoena while the motion to quash is under consideration.  Clearly there is merit to our case in that the subpoena is over-broad and overly burdensome and that DCA is attempting to retroactively enforce a new interpretation of long standing laws and regulations.  DCA, however, has extremely wide authority to issue subpoenas to investigate potential acts of deceptive trade practices so there is no guaranty of a legal victory.

 

     Please contact me at your earliest opportunity to discuss how you would like to proceed with the DCA subpoena.  Our phone number is 516-2802-8580.  The deadline for filing our motion is August 22, 2014 so time is of the essence.