The Missouri Supreme Court has upheld the constitutionality of state regulations for price-related advertising by dealerships.
The court rejected a suburban Kansas City dealership's challenge to regulations adopted by the Missouri Motor Vehicle Commission. Those rules prohibit motor-vehicle ads that refer to 'invoice price' or that mention price-matching without disclosing all limitations imposed by the dealer.
Adams Ford Belton Inc. in Belton filed the suit after the commission reprimanded it for violating both regulations in 1994 newspaper ads.
One ad said, '$5,000* guarantees we will beat any deal anywhere, any time,' with the asterisk referring to smaller print that said 'all applicable rebates to dealer.' The other ad said, '$100 over Ford factory invoice on all models in stock.'
Disciplinary charges were filed against Adams Ford, which contested them in Cole County Circuit Court. Judge Patricia Joyce ruled in favor of the state commission.
So did the Missouri Supreme Court. The court rejected Adams Ford's argument that it is unconstitutional to regulate ads by Missouri dealers but OK to regulate ads by out-of-state dealers that advertise in Missouri publications or on Missouri broadcast stations.
The regulations are not unconstitutional, the court ruled. Because advertising is 'commercial speech,' it must be truthful and not misleading to have First Amendment protection, the court said.
The provision barring price comparisons without full disclosure also is constitutional, according to the Missouri Supreme Court, because such ads are 'inherently misleading and subject to abuse by dealers.'
It noted that the undisclosed terms and conditions of Adams Ford's price-matching policy - although available at the dealership - would probably exclude most customers from making use of the advertised 'guarantee.' For example, the 'guarantee' was limited to the same day the ad ran and required that the customer already have paid a deposit to a competitor.
Adams Ford attorney Robert Jester of Kansas City said a motion for reconsideration has been filed; if that is not successful, his client may seek U.S. Supreme Court review.