The U.S. Federal Trade Commission dropped racial discrimination claims against three North Texas David McDavid car dealerships in response to a Trump administration directive, according to court documents filed last month.
After the removal of those claims, which alleged unethical and discriminatory sales practices targeting Black and Latino customers, the dealerships still face allegations of misrepresenting charges, misrepresenting add-on charges and unfair practices.
An administrative law judge ruled the FTC could remove its fourth complaint to comply with an executive order from the Trump Administration diminishing the use of disparate-impact claims — referring to practices that appear neutral but may discriminate based on race, religion, or gender — by federal agencies.
Disparate impact has historically been used to prove discrimination under the 1964 Civil Rights Act. Its elimination was included in the controversial Project 2025 published by the Heritage Foundation, a conservative think tank.
Dustin Rynders, legal director for advocacy group The Texas Civil Rights project and a former University of Houston law professor, said the FTC backing away from its discrimination claim is not an isolated event — but rather part of a coordinated federal pullback from enforcing civil rights laws.
“This isn't just a legal technicality, it's a test of whether we take structural inequality seriously in 2025,” Rynders said. “We can't address systemic discrimination if we refuse to even look at the system.”
While Trump's new order does not eliminate liability from federal law, it instructs federal agencies to "deprioritize” any enforcement actions related to disparate impact liability, calling it an unlawful practice.
The order, which was signed April 23, said the move “encourages meritocracy and a colorblind society, not race- or sex-based favoritism.”
“Disparate-impact liability all but requires individuals and businesses to consider race and engage in racial balancing to avoid potentially crippling legal liability,” the order reads. “It not only undermines our national values, but also runs contrary to equal protection under the law and, therefore, violates our Constitution.”
The commission filed an administrative complaint last August against Asbury Automotive Group — which owns the three McDavid dealerships — and general manager Ali Benli for allegedly charging customers hidden fees for unwanted add-on products. The original complaint accused Benli and the dealerships of charging Black and Latino customers hundreds more on average for those same add-ons.
The FTC said company documents showed one dealership charged Black customers $298 more than white customers. For Latino consumers, it was $214 more on average.
Neither the Asbury Automotive Group nor the FTC responded to requests for comment.
Without action from federal agencies, most people can't enforce those rights on their own, Rynders said, because they often lack the resources, investigative abilities, and lawyers to bring on these kinds of cases.
“The reality is the law's still on the books, but it's becoming a dead letter,” Rynders said, “Not because the courts have rejected it, but because the executive branch isn't doing its job to enforce it.”
The FTC alleged wrongdoing at David McDavid’s three locations: the Ford location in Fort Worth, the Honda location in Frisco and the Honda location in Irving.
The add-ons included purportedly protective chemical coatings and service contracts to life and disability insurance policies, according to complaints from unidentified consumers. Some said representatives never discussed these products during sales, while others said they explicitly declined the add-ons, which were later included without their consent.
Customers weren’t shown full documents, according to the FTC, only the places where they should sign. Others say they were charged thousands of dollars for add-ons they were told were mandatory.
The commission’s amended filing includes several complaints from unnamed customers received by Asbury and Benli. And it claims Benli “tracked public complaints and pressured consumers to take down negative reviews.”
The FTC issues administrative complaints when there is reason to believe laws are being violated and a proceeding is in the public interest. Those claims are then tried in a hearing before an administrative law judge. A hearing is set for Dec. 19.
Asbury filed a lawsuit shortly after claiming in part the underlying administrative process is “unconstitutional” because the FTC did not include names of the customers who were allegedly harmed by the practices. Asbury also argued the complaint is "illegitimate" at its core because the commission is attempting to settle issues of private rights in an administrative proceeding. The proceedings also violate the company’s right to a jury trial, Asbury said, because the evidentiary hearing over the FTC’s allegations would be a non-jury trial.
That case is ongoing.
Additional reporting from KERA’s Toluwani Osibamowo.
Penelope Rivera is KERA’s breaking news reporter. Got a tip? Email Penelope Rivera at privera@kera.org.
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