Today, the 9th Circuit Court of Appeals issued its decision on the appeal filed by CDK and Reynolds and Reynolds to an Arizona District Court ruling on a number of constitutional and other challenges to the Arizona “Dealer Law.”  Specifically, the 9th Circuit panel “affirmed the district court’s order denying plaintiffs’ motion for a preliminary injunction against enforcement of the “Dealer Law,” an Arizona statute aimed at strengthening privacy protections for consumers whose data is collected by car dealers and restricting anticompetitive business practices by technology companies that provide database services for dealers.”

This litigation and the passage of the Dealer Law was defended by the Arizona Attorney General and the Arizona Automobile Dealers Association (“AADA”), with strong financial and other support from NADA.   The 9th Circuit’s decision today is a clear victory for the AADA and Arizona dealers.

Arizona passed the “Dealer Law” in 2019 in an effort to provide tools to dealers to protect consumer data in dealer systems. Broadly speaking, the Law prohibits third parties from taking any action by contract, technical means or otherwise from preventing dealers from sharing, storing, protecting, or using their data in any way they deem appropriate, and it prohibits certain excess fees charged by third parties for access to dealer data.

CDK and R&R challenged the Law shortly after its enactment, alleging a wide array of constitutional and federal statutory violations. In 2020 the Arizona District court dismissed the majority of the claims and denied CDK/R&R’s motion to enjoin enforcement of the Law based on the four remaining claims.

CDK/R&R then appealed the District Court’s ruling on the preliminary injunction to the 9th Circuit. A panel of 9th Circuit judges heard oral argument on that challenge earlier this year.

Today’s ruling clears the way for the enforcement of the Dealer Law in Arizona, and in an important next step in helping to provide dealers nationwide with important tools and protections for dealer data.

The case is: CDK Global LLC, v. Brnovich, Case No. 20-16469, D.C. No. 2:19-cv-04849-GMS (9th Cir. Oct. 25, 2021).

Jeff Weber
Chairman, Regulatory Affairs Committee