Opinion No. (1999) ( 1999 )

Dear Executive Director Eckenrode,

¶ 0 This Office has received your letter asking for an official Opinion addressing, in effect, the following question:

Is the Oklahoma Motor Vehicle Commission prohibited fromdisciplining new motor vehicle dealers who use false ormisleading advertising involving used motor vehicles at afranchised new motor vehicle dealership?

¶ 1 The Oklahoma Motor Vehicle Commission ("Motor Vehicle Commission") licenses new motor vehicle dealers, 47 O.S.561-47 Ohio St. 580.2 (1991-1998), while its counterpart, the Used Motor Vehicle and Parts Commission ("Used Motor Vehicle Commission"), regulates used motor vehicle dealers. 47 O.S.581-47 Ohio St. 591.14 (1991-1998). The Motor Vehicle Commission licenses approximately 430 new motor vehicle dealers in Oklahoma. According to the Motor Vehicle Commission, new motor vehicle dealers typically obtain used motor vehicle licenses because new motor vehicle transactions frequently involve a trade-in from purchaser to dealer. Dual licensure permits the dealer to sell both new and used motor vehicles.

¶ 2 An administrative agency may exercise only those powers granted to it by the Legislature. See Matador Pipelines v.Oklahoma Water Resources Bd., 742 P.2d 15, 16 (Okla. 1987). There is no question that the Motor Vehicle Commission may discipline new motor vehicle dealers who use false or misleading advertising of new motor vehicles.¹ Your inquiry asks whether the Motor Vehicle Commission may discipline new motor vehicles dealers who engage in false or misleading advertising ofused motor vehicles.²

¶ 3 The Motor Vehicle Commission has the express power to regulate new motor vehicle dealers, 47 Ohio St. 563(F) (1998), and discipline those new motor vehicle dealers who use false or misleading advertising, 47 Ohio St. 565(5)(b) (1998). The Oklahoma Motor Vehicle License and Registration Act provides that:

The Commission may deny an application for a license, or revoke or suspend a license or impose a fine . . . against a dealer for . . . [b]eing a new motor vehicle dealer or new motor vehicle salesperson who . . . uses any false or misleading advertising in connection with his business as such new motor vehicle dealer or vehicle salesperson. . . ."

47 Ohio St. 565(5)(b) (1998).

¶ 4 Both the Motor Vehicle Commission and Used Motor Vehicle Commission have promulgated rules setting forth a list of "prohibited statements," representations which are presumed false or misleading and which shift to the dealer the burden of proving the statement's veracity. See OAC 465:15-3-14 and OAC765:16-3-11. Both rules provide that "[a] used vehicle shall not be advertised in any manner that creates the impression it is new." OAC 465:15-3-14(10) and OAC 765:16-3-11(8). These burden-shifting provisions focus on the truthfulness rather than the subject matter of the advertising.

¶ 5 The Oklahoma Motor Vehicle License and Registration Act's general prohibition against false or misleading advertising applies to all advertisements made by new motor vehicle dealers in connection with the licensee's business as a new motor vehicle dealer. See 47 Ohio St. 565(5)(b) (1998). The Motor Vehicle Commission is prohibited from disciplining used motor vehicle dealers; however, to the extent that a new motor vehicle dealer represents a used motor vehicle as a new motor vehicle in connection with the new motor vehicle dealer's business, the Motor Vehicle Commission may discipline the dealer's new motor vehicle license. The Motor Vehicle Commission's jurisdiction is confined to the dealer's new motor vehicle license, however, and the disciplinary action would not prohibit the Used Motor Vehicle Commission from disciplining the dealer's used motor vehicle license.

¶ 6 It is, therefore, the official Opinion of the AttorneyGeneral that: The Oklahoma Motor Vehicle Commission is generally prohibitedfrom exercising jurisdiction over used motor vehicle dealers;however, pursuant to 47 Ohio St. 565(5)(b) (1998) and OAC465:15-3-14(10), the Oklahoma Motor Vehicle Commission maydiscipline a new motor vehicle dealer who represents a used motorvehicle as a new motor vehicle in connection with the dealer'snew motor vehicle business.

W.A. DREW EDMONDSON ATTORNEY GENERAL OF OKLAHOMA

JOHN A. MAISCH ASSISTANT ATTORNEY GENERAL

¹ The Oklahoma Motor Vehicle License and Registration Act defines new or unused motor vehicle as "a vehicle which is in the possession of the manufacturer or distributor or has been sold only to the holder of a valid selling agreement, franchise or contract, granted by the manufacturer or distributor for the sale of said make of new vehicle so long as the manufacturer's statement of origin has not been assigned to anyone other than a licensed franchised new motor vehicle dealer of the same line-make." 47 Ohio St. 562 (1991).

² The Used Motor Vehicle and Parts Dealers statutes defineused motor vehicle as "any motor vehicle, as that term is defined in the Oklahoma Motor Vehicle License and Registration Act, which has been sold, bargained, exchanged, given away, or the title thereto transferred from the person who first took title from the manufacturer, importer, or dealer or agent of the manufacturer or importer. . . ." 47 Ohio St. 581 (1991).