Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 12

David Diersen filed a complaint against the Chicago Car Exchange (CCE), an automobile dealership, alleging that the CCE fraudulently furnished him an inaccurate odometer reading when it sold hima 1968Dodge Charger, in violation of the Vehicle Information and Cost Savings Act (''the Odometer Act'' or ''the Act''). The Odometer Act requires all persons transferring a motor vehicle to give an accurate, written odometer reading to the purchaser or recipient of the transferred vehicle. Under the Act, those who disclose an inaccurate odometer reading with the intent to defraud are subject to a private cause of action by the purchaser and may be held liable for treble damages or $1,500, whichever is greater. The trial court granted the defendant's motion for summary judgment, relying upon a regulation promulgated by the National Highway Traffic Safety Administration (NHTSA), which purports to exempt vehicles that are at least ten years old (such as the one Diersen purchased from the CCE) from the Act's odometer disclosure requirements. Diersen then filed a motion for reconsideration of the court's summary judgment order, arguing that the older-car exemption created by the NHTSA lacked any basis in the Act and was therefore invalid. What standard should the court apply in determining the validity of theNHTSA regulation?