Automotive Practice Group News

Automotive Practice Group News is an email and online publication offering insights and industry interests for the automotive industry. For a complete description of our practice, visit us here.

Employment
 

4/3/13: “Piece or ‘Flag’ Rate and Commission Earnings Cannot Be Averaged Over a Workweek to Satisfy California Minimum Wage Obligations”
The California Court of Appeal for the Second Appellate District published its March 6, 2013 opinion in Gonzalez v. Downtown LA Motors, LP.
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Regulatory Updates
 

4/18/13: “FTC Amends Alternative Fuels Rule to Make Compliance Easier”
The FTC approved the changes to consolidate FTC labels with EPA fuel economy labels for all AFVs, and eliminate FTC labeling requirements for used AFVs. The final rule is effective May 31, 2013.
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4/10/13: “Tesla Takes on Texas Auto Franchise Laws”
Tesla pushes the Texas Legislature to allow Tesla electric cars to be sold directly to consumers instead of through franchised dealers.
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4/2/13: “NHTSA Checking 2006-08 Hyundai Sonatas After Reports of Rusted Suspension Frames”
NHTSA is checking Hyundai Sonatas from the 2006-08 model years in response to complaints about rusted rear suspension frames. The results of NHTSA’s investigation could influence the launching of a recall affecting about 393,000 cars.
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3/30/13: “The CFPB Threatens to Sue Banks Over Dealer Participation”
CFPB issues letters to at least four banks involved in auto financing indicating that the banks may be sued by the CFPB due to their payment of dealer participation in violation of the Equal Credit Opportunity Act.
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3/29/13: “EPA Proposes Tougher Tailpipe, Gasoline Rules”
EPA proposes lower-sulfur gasoline and emission Tier 3 rules for 2017.
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3/28/13: “Auto Loans Prompt 1,585 Complaints to New US Consumer Watchdog”
The US Consumer Financial Protection Bureau releases data on vehicle-finance complaints for the first time.
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3/27/13: “Service Contract Execs to Pay $53,000 to Settle Dispute with Missouri Attorney General”
The Missouri Attorney General’s office reached a $53,000 settlement with the former Enterprise Warranty Group for claims of improperly selling extended-service contracts and “additive warranties” in ways designed to get around insurance regulations. Most of the money will go toward consumer refunds.
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3/22/13: “Biased Loans By Auto Dealers to Bring Bank Suits By CFPB”
In a recently released CFPB guidance, the agency indicates lenders may be sued for funding discriminatory vehicle loans made by auto dealers.
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3/18/13: “Louder EVs May Turn Off Drivers, Automakers Say”
Automakers worry about NHTSA’s proposed rules for quiet cars saying the noises could irritate drivers and the public, mask the sounds of approaching cars, make it difficult to tell when an EV or hybrid has started to move, increase vehicle cost and complicate marketing efforts.
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3/16/13: “Tesla Bill Removed from Legislative Consideration”
The Minnesota Auto Dealer’s Association forfeited its franchise bill restricting Tesla factory owned stores in Minnesota after the Senate Transportation Committee’s adoption of Tesla’s amendment.
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3/12/13: “FTC Updates ‘Dot Com Disclosures’”
The FTC updates the “Dot Com Disclosure” to address online and mobile advertising.
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2/13/13: Office of Attorney General, State of Florida, Department of Legal Affairs v. Toyota Motor Corporation, etc., et al.
On February 13, 2013, Florida’s Attorney General filed a complaint against Toyota Motor Corporation and its various subsidiaries, seeking a permanent injunction, payment of civil penalties of $10,000 for each violation of Florida’s Deceptive and Unfair Trade Practices Act, and payment of civil penalties of $15,000 for each violation involving senior citizen or handicapped person. The Complaint alleges Toyota knew of the “sticky pedal” defect causing unintended sudden acceleration as early as September of 2009, but waited until January of 2010 to notify NHTSA of the defect. The Complaint alleges Toyota advertised its vehicles as safe and reliable transportation but such advertising had the capacity of deceiving or misleading consumers, thereby constituting unfair or deceptive trade practices.

Industry Interests
 

4/11/13: “Japan Carmakers Recall 3.4 Million Vehicles for Takata Airbag Flaw”
Four Japanese automakers recall 3.4 million vehicles sold world-wide because airbags supplied by Takata Corp. pose risk of combustibility and injury to passengers. Toyota Motor Corp. and Nissan Motor Co. are among the automakers committing to the recall.
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4/8/13: “Massive Fisker Layoffs May Be Prelude to Bankruptcy”
Fisker Automotive lays off three-quarters of its employees in what may be the prelude to the company’s bankruptcy.
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4/8/13: “As Obama’s CO2 Regulations Get Tough, Automakers — Especially Japanese — Have Already Earned a Big Cushion”
Future planning has paid off for Toyota, Honda, and Nissan as other automakers struggle to meet increasingly tight CO2 regulations. At the beginning of the standards phase-in for the 2012 model year, Toyota held 86 million EPA credits.
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4/4/13: “GM to Invest $332 Million in Four Sites to Build Fuel-Efficient Engines”
General Motors Co. announces it will invest $332 million on four North American manufacturing sites in a push to produce more fuel efficient vehicles.
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4/4/13: “Mazda, Aided By Weaker Yen, Eyes First Annual Profit in 5 Years”
Weakening of the Yen allows Mazda some financial breathing room as its US market becomes more profitable. The Japanese automaker is expected to post boosted profit for the January-March quarter.
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4/3/13: “Former A123 Battery Maker Settles Supply Claim with Fisker”
Bankrupt battery maker A123 Systems Inc. reached a settlement in which Fisker Automotive reduced its claims by 89% to $15 million in a settlement. Fisker’s breach-of-warranty claim will be reduced from $48.7 million to a $15 million unsecured claim and its $91.2 million claim for damages from the rejection of its supply agreement will be disallowed. The confirmation hearing for the bankruptcy plan is scheduled April 30, 2013.
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4/3/13: “Hyundai, Kia Recalling 1.9 Million Vehicles”
In three separate service actions, Hyundai and Kia will recall 1.9 million vehicles in the US market. Subaru will also recall 200,000 vehicles due to brake line corrosion issues.
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4/3/13: “VW in Legal Row with Former Qatari Sales Partner”
Qatari distributor Saad Buzwair Automotive (SBA) demands $193 million in damages from Volkswagen in a legal dispute over lost sales. VW terminated a 2007 agreement with SBA for the distribution of Audi cars in Qatar. The case is pending in a Paris-based court.
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3/27/13: “Georgia Fixes Tax Hike on Leases”
The Georgia legislature has fixed a glitch in a new state tax law that disproportionately penalized auto leases.
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