Arizona state officials, along with the state's dealer association, have asked a federal judge to toss out a lawsuit brought by dealer management system giants CDK Global Inc. and Reynolds and Reynolds Co. challenging a new state data law.
In motions to dismiss the DMS vendors' case, state Attorney General Mark Brnovich, John Halikowski, director of the Arizona Department of Transportation, and the Arizona Automobile Dealers Association argued that CDK's and Reynolds' claims are unsupported by law. The motions were filed last week in U.S. District Court in Arizona.
"None of Plaintiffs' allegations can support a cognizable claim," attorneys for Brnovich and Halikowski wrote in their motion. "Plaintiffs cannot establish that the Dealer Data Security Law is facially unconstitutional, because well-established law makes clear that each of Plaintiffs' scattershot constitutional arguments fails as a matter of law."
In their motions, state officials and the dealer association also rejected CDK's and Reynolds' claims that the state law is superseded by federal law and therefore can't be enforced.
Arizona Gov. Doug Ducey, a Republican, signed the new data law in April. The law gives dealers more control over sharing data with third parties and bans charging fees for the access. Arizona's law is similar to others passed in Montana, Oregon, North Carolina and Hawaii.
Aside from their contention that the law is unconstitutional, CDK and Reynolds also say Arizona's law will put personal customer data at risk of being used by third-party companies that don't have to protect data as stringently as dealers.
The dealer association was allowed to intervene in the case. Attorneys for association and state officials requested oral arguments in court. A timeline for next actions has not been set.