Kelley Blue Book Co. v. Louisiana Motor Vehicle Commission

204 So. 3d 1139, 16 La.App. 5 Cir. 281, 2016 La. App. LEXIS 2485
CourtLouisiana Court of Appeal
DecidedDecember 7, 2016
DocketNO. 16-CA-281
StatusPublished
Cited by6 cases

This text of 204 So. 3d 1139 (Kelley Blue Book Co. v. Louisiana Motor Vehicle Commission) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kelley Blue Book Co. v. Louisiana Motor Vehicle Commission, 204 So. 3d 1139, 16 La.App. 5 Cir. 281, 2016 La. App. LEXIS 2485 (La. Ct. App. 2016).

Opinion

LILJEBERG, J.

hPlaintiff, Kelley Blue Book Co., Inc. (“KBB”), appeals the district court’s judgment affirming the decision of the Louisiana Motor Vehicle Commission (the “Commission”), which assessed a $5,000.00 fine and costs in the amount of $2,819.96 against KBB. The Commission assessed the fine and costs based on its finding that KBB engaged in internet • advertising in violation of Section 723.A of Title 46, Part V of the Louisiana Administrative Code, by using the term “invoice” in an advertisement. For the following reasons, we affirm the district court’s judgment.

FACTUAL AND PROCEDURAL HISTORY

KBB is a digital media company which offers a wide range of motor vehicle related information to its constituents, including consumers, government entities, manufacturers, dealers, insurance companies and financial institutions. The issue before this Court relates to the portion of KBB’s internet website, which on August 5, 2013, invited the consumer to conduct a search to obtain a fair purchase price for his or her vehicle of choice. According to KBB, the fair purchase price provides consumers with a target price based on what other consumers in the same market paid for a specific make and model of vehicle. KBB contends that in addition to providing the fair purchase price, its website provides a range of prices which includes the manufacturer’s suggested retail price (“MSRP”) and the dealer invoice price. After obtaining this pricing range, the consumer can obtain a free quote from dealers that advertise with KBB by providing their contact information.

On August 5, 2013, the Commission conducted a search on KBB’s website to obtain a fair purchase price for a 2014 Ford Fusion Titanium. However, KBB’s website provided the Commission with only the dealer invoice price and MSRP. |2Next to the fair purchase price, it read “N/A.”1 [1143]*1143After conducting its investigation of KBB’s website on August 5, 2013, -the Commission issued a Notice of Hearing to KBB stating as follows:

An investigation by the Commission revealed that Kelly (sic)' Blue Book, Co., Inc. d/b/a www.kbb.com, on and/or around August 5, 2013, conducted or designed advertising for the sale or offer to sell new motor vehicles to Louisiana consumers on its kbb.com website, i.e., advertising a 2014 Ford Fusion Titanium Sedan utilizing a dealer invoice price of $33,342.00 (Chapter- 7. § 703A., § 705A. & § 723A.)

In this notice, the Commission alleged that KBB “violated the following sections of the Louisiana Motor Vehicle Commission Law and its Rules and Regulations:” Louisiana Revised Statutes

LSA-R.S. 32:1254(N). Any person who sells or offers to sell new motor vehicles, recreational products, or specialty vehicles, or leases, rents, or offers to lease or rent new motor vehicles, recreational products, or specialty vehicles, or conducts and designs advertising or participates in special sales events on behalf of licensees, and which is not a licensee of the commission shall, nonetheless, be subject to the provisions of Chapter 6 of Title 32 and the rules- and regulations of the commission.
Louisiana Administrative Code Title 46. Part V. Subpart 1. Chapter 7. Advertising
§ 703. General Prohibition
A. A person advertising vehicles shall not use false, deceptive, unfair, or misleading advertising.
§ 705. Specific Rules
A. The violation of an advertising rule shall be considered by the commisr sion as a prima facie violation of R.S. 32:1251 et seq. In addition to a violation of a specific advertising rule, any other advertising or advertising practices found by the commission to be false, deceptive, or misleading shall be deemed a violation of R.S. 32:1251 et seq., and shall also be considered a violation of the general prohibition. I ü§ 723. Advertising at Cost or Invoice
A. No advertisement shall be run which uses the term or terms “invoice”; “cost”; “percent over/under cost, invoice or profit”; “$$$ over/under cost, invoice or profit”.

The Commission held an administrative hearing on May 19, 2014. At the beginning of the hearing, the Commission’s counsel explained its position that KBB violated the advertising rules and regulations by providing the consumer with a dealer invoice price accompanied by a link inviting the consumer to request free quotes from dealers that advertise with KBB. The Commission alleged that providing the dealer invoice price in combination with the referral to the dealers constituted an advertisement.

The Commission’s Executive Director, Lessie House, testified at the hearing and explained the Commission conducted the search after learning traditional consumer research sites, such as KBB, were no longer simply providing consumer research information, but also referring consumers to dealers advertising on their websites. Ms. House testified regarding the specifics of the search conducted on KBB’s website on August 5, 2013. She explained that the KBB website contained language stating, [1144]*1144“Trust KBB for new car pricing. Our fair purchase price is updated weekly so you can get your best deal. Select a car.” The website then contained prompts to type in a zip code and select a make and model of a vehicle'. The Commission chose to search for a fair purchase price for a 2014 Ford Fusion Titanium. The website then contained prompts to select options and packages including color, steering, safety and security, seats, roofing glass, wheels and tires.

After completing these selections, the website prompted the Commission to click a button to see the fair purchase price. However, after clicking the button, the website stated “N/A” next to the fair purchase price, and only provided an MSRP in the amount of $36,235.00 and a dealer invoice price in the amount of $33,342.00. Ms. House testified that immediately under the dealer invoice price, |4the page contained a button which stated, “Find dealers near you. Get your free quote.” The Commission clicked on the free quote button and received a list of five motor vehicle dealers from which it could choose to obtain a quote by providing contact information.

Scott Ehlers, KBB’s Vice President, also testified at the hearing and agreed that when a consumer clicks on the button to receive a free quote, the list only includes those motor vehicle dealers which advertise with KBB. KBB sends an email with the consumer’s contact information to the dealers selected by the consumer. Mr. Ehl-ers also testified that KBB provides dealer invoice price information to educate the consumer because this is a data point dealers use when negotiating a sale with a consumer in the showroom. He agreed the dealer invoice price provided to the consumer is not the actual price the dealer pays to the manufacturer because the invoice price does not reflect any hold backs, incentives or rebates the manufacturer provides to its dealers.

Mr. Ehlers also explained that KBB normally provides all three data points, the fair purchase price, dealer invoice price and MSRP, to assist the consumer in negotiating a vehicle purchase.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
204 So. 3d 1139, 16 La.App. 5 Cir. 281, 2016 La. App. LEXIS 2485, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kelley-blue-book-co-v-louisiana-motor-vehicle-commission-lactapp-2016.