MINUTES OF THE MEETING OF THE LOUISIANA MOTOR VEHICLE COMMISSION 3519 12th Street Metairie, Louisiana 70002 Monday, May 19, 2014 The meeting was called to order at 10:20 a.m. by Chairman Raymond J. Brandt. Present were: Chairman Raymond J. Brandt Commissioner V. Price LeBlanc, Jr. Commissioner Troy J. Duhon Commissioner Brian C. Bent Commissioner Alexis D. Hocevar Commissioner John W. Timmons Commissioner James C. “Jim” Hicks Commissioner Joseph W. “Bill” Westbrook Commissioner Philip E. Tarver Commissioner Donna S. Corley Commissioner Maurice C. Guidry Commissioner Don P. Hargroder L. A. House, Executive Director Adrian F. LaPeyronnie, III, Counselor Gregory F. Reggie, Counselor Burgess E. McCranie, Jr., Counselor Absent were: Commissioner John B. Fabre Commissioner Thad J. Ryan, III ***************************************************** Also, in attendance were Jeanne Comeaux, Attorney for CG Group, LLC DBA Toyota of Bastrop; representing Kelley Blue Book Co., Inc. were Scott Ehlers, Vice President; Peter Cassat, Vice President and General Counsel; Heidi Dorn, Assistant General Counsel; Kristy Brown, Counsel; Peter Connick, Counsel; and David Carpenter, Counsel; and Commission staff: Ingya Cattle, Assistant Executive Director; Art Quick, Commission Investigator 5; Commission Investigator Supervisor, Wayne Lee; Commission Investigators, Amy Lawson, Neil Rogers, and Michael Delrie; Administrative Coordinators, Pam Mangin, Gaynelle Mitchell, Stacey Broussard, and Trina Adams. ***************************************************** The Chairman called to order Hearing #2014-014, CG Group, LLC DBA Toyota of Bastrop for alleged violations of LSA-R.S.32:1258.A. (1), (4), & (8) Denial, revocation, grounds, imposition of a civil penalty, or suspension of license; grounds; expiration. In attendance representing CG Group, LLC DBA Toyota of Bastrop was Jeanne Comeaux, Esq. Prior the hearing, Ms. Comeaux and Counselor Reggie concluded that Ms. Comeaux and her client, Butch Carter, accepted the following Consent Judgment, if accepted and ratified by the Commission. Commissioner Duhon made a motion to accept and ratify the Consent Judgment in this matter. Commissioner Tarvar seconded this motion and it was unanimously approved. A court reporter was brought in to record the transcript of this hearing, which will be made a permanent part of the Commission’s files. IN THE MATTER BEFORE THE LOUISIANA MOTOR VEHICLE COMMISSION IN RE: CG GROUP, LLC d/b/a § NO. 2014-014 (Amended) TOYOTA OF BASTROP, 2329 EAST § MADISON AVENUE § BASTROP, LOUISIANA 71220 § CONSENT JUDGMENT The CG Group, LLC d/b/a Toyota of Bastrop (Toyota of Bastrop) and the Louisiana Motor Vehicle Commission (the “Commission”) have reached an agreement to resolve the Commission’s pending revocation proceeding (No. 2014-014, Amended), and to facilitate the sale of Toyota of Bastrop to Mr. Art Allen and/or any Art Allen-owned or controlled entity (collectively referred to as “Art Allen”) that will ultimately purchase Toyota of Bastrop, herein enters this Consent Judgment resolving the issues raised in Docket No. 2014-014, to wit: 1.Art Allen must complete any and all Gulf Coast Toyota (“Toyota”) application requirements, in full, within 30 days of the final execution of this Consent Judgment. LMVC.05.19.14.#1 2.Toyota has 90 days from the final execution of this Consent Judgment to accept or reject Art Allen as a qualified transferee. 3.Butch Carter, as owner of the CG Group, LLC and dealer principal of Toyota of Bastrop, will tender Toyota of Bastrop’s motor vehicle dealer license in 90 days from final execution of this Consent Judgment, regardless of Toyota’s acceptance or rejection of Art Allen as a proposed qualified transferee. 4.Butch Carter and Toyota of Bastrop reserve and retain limited protest rights only as to whether Toyota unfairly or unreasonably rejected Art Allen as a qualified transferee. Specifically, Butch Carter and Toyota of Bastrop specifically waive the right to protest or appeal the revocation of Toyota of Bastrop’s dealer license 90 days from the final execution of this Consent Judgment. 5.The Commission shall dismiss Docket No. 2014-014 upon the revocation of Toyota of Bastrop’s license pursuant to the terms of this Consent Judgment, or upon Toyota of Bastrop’s tender of its dealer license, whichever comes first. ________________________________________ ________________________ TOYOTA OF BASTROP Date BUTCH CARTER, Dealer Principal _________________________________________ ________________________ LOUISIANA MOTOR VEHICLE COMMISSION Date GREGORY REGGIE, General Counsel ACCEPTED BY: _________________________________ LOUISIANA MOTOR VEHICLE COMMISSION RAY BRANDT, Commissioner ________________ Date ***************************************************** The Chairman called to order Hearing #2013-079, KELLEY BLUE BOOK CO., INC. d/b/a www.kbb.com for alleged violations of Section 723.A (Advertising at Cost or Invoice) of the Louisiana Administrative Code, Title 26, Part V, Subpart 1, Chapter 7. Advertising. In attendance representing KELLEY BLUE BOOK CO., INC. was Scott Ehlers, Vice President; Peter Cassat, Vice President and General Counsel; Heidi Dorn, Assistant General Counsel; Kristy Brown, Counsel; Peter Connick, Counsel; and David Carpenter, Counsel. A court reporter was brought in to record the transcript of this hearing, which will be made a permanent part of the Commission’s files. IN RE: Hearing #2013-079 KELLEY BLUE BOOK CO., INC. d/b/a www.kbb.com JUDGMENT This cause came to be heard on Monday, May 19, 2014 APPEARANCES: Peter Connick, Esq. of Connick and Connick, LLC; Kristy Brown, Esq., and David Carpenter, Esq. of Alston & Bird LLP, representing KELLEY BLUE BOOK CO., INC. d/b/a www.kbb.com Adrian F. LaPeyronnie, III, Attorney for the Louisiana Motor Vehicle Commission And after hearing the testimony adduced at trial, the receipt of documentary evidence into the record, and for reasons orally assigned, the Commissioners of the Louisiana Motor Vehicle Commission (“the Commission”) make the following findings of fact and conclusion of law: Finding of Fact: KELLEY BLUE BOOK CO., INC. d/b/a www.kbb.com, on or around August 5, 2013 engaged in Internet invoice advertising in the state of Louisiana; Conclusion of Law: KELLEY BLUE BOOK CO., INC. d/b/a www.kbb.com, violated Section 723.A (Advertising at Cost or Invoice) of the Louisiana Administrative Code, Title 26, Part V, Subpart 1, Chapter 7. Advertising. Considering the forgoing and pursuant to the authority vested in the Louisiana Motor Vehicle Commission set forth in LSA-R.S. 32:1251, et seq.: IT IS ORDERED, ADJUDGED AND DECREED that KELLEY BLUE BOOK CO., INC. d/b/a www.kbb.com be and is hereby assessed a fine in the amount of FIVE THOUSAND AND NO/100 ($5,000.00) DOLLARS. LMVC.05.19.14.#2 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that KELLEY BLUE BOOK CO., INC. d/b/a www.kbb.com pay the cost of the full board hearing to the Commission in the amount of TWO THOUSAND EIGHT HUNDRED AND NINETEEN DOLLARS AND NINETY-SIX CENTS ($2,819.96), in addition to the FIVE THOUSAND DOLLARS ($5,000.00) fine assessed herein. Judgment read and rendered on the 19th day of May, 2014. Judgment signed this ________ day of June, 2014. __________________________________ Raymond J. Brandt, Chairman Louisiana Motor Vehicle Commission ***************************************************** The Executive Director presented to the Commission Members the below attached Internet research regarding Giles Automotive giving away cash to “Acadiana Local Heroes.” The Executive Director pointed out the cash giveaway is link to advertising of the Giles’ dealership names. A brief discussion ensued after the Commission Members reviewed the attachment. Commissioner Duhon made a motion that Giles Automotive’s cash give away event was not to a non-profitable charity, 501C.3, and would be in violation of §735 of the Rules and Regulations. Commission Duhon continued the motion by adding the cash could be given to a 501C charity. Commissioner LeBlanc seconded this motion. LMVC.05.19.14.#3 LMVC.05.19.14.#4 LMVC.05.19.14.#5 **************************************************** At this time, the Executive Director advised the Commission Members Commissioner Tarver had expressed concerns regarding several advertising campaigns being utilized at this time. The Chairman opened the floor for Commissioner Tarver who brought up the issues regarding advertising of “supplier’s pricing” and manufacturer’s advertisement on vehicle lease price, copies of examples of these types of advertising are below. Commissioner Tarver stated he feels the advertising of “supplier’s price” is in violation of §757. Fleet Prices: A. Terms such as “fleet prices,” “fleet sales,” suppliers prices,” or other terms implying that retail individual customers will be afforded the same price and/or discount as multi-purchase commercial businesses shall not be used in advertising. the “invoice” from manufacturer. After a brief discussion, Commissioner Tarver made a motion to that advertising with “supplier’s pricing” is misleading and not in compliance with Louisiana Administrative Code Title 46. Part V. Subpart 1. Chapter 5. § 757 Fleet Prices. Commissioner LeBlanc seconded this motion. The motion passed. Commissioners Duhon, Guidry and Hargroder voted against the motion. LMVC.05.19.14.#6 Commissioner Tarver the information below regarding an ad that was being aired on TV, explaining this was an example of his complaint regarding the setting of a lease payment, which requires dealer participation.