Auto dealers in Arizona are optimistic that they will prevail in a federal lawsuit brought by two U.S. dealership management system giants over control of data inside a retailer's central operating system.
Dealerships logged a win last month after a federal judge denied a request by CDK Global Inc. and Reynolds and Reynolds Co. to stop enforcement of a new Arizona statute that gives retailers more access to data contained inside their systems. That step means the law, adopted last year but put on hold while the DMS companies' preliminary injunction request was pending, can now take effect while litigation proceeds.
CDK and Reynolds appealed the injunction decision late last month. Longer term, the outcome of the case — and what it means for broader issues surrounding data access and security — could have ramifications beyond Arizona, even if the decision ultimately is not binding on other states.
Arizona is "kind of the guinea pig out there right now," said Bobbi Sparrow, president of the Arizona Automobile Dealers Association, which intervened in the lawsuit CDK and Reynolds filed in 2019 against state Attorney General Mark Brnovich.
The law allows dealerships to share data stored within their systems with third-party vendors deemed to be authorized integrators, and prevents companies including CDK and Reynolds from charging fees or placing other restrictions on that access. It is similar to statutes adopted in states such as Montana, Oregon and Hawaii.
Reynolds spokesman Tom Schwartz told Automotive News that the company doesn't speculate on potential actions in other states.