ALEJANDRO N. MAYORKAS
United States Attorney

CONSUELO S. WOODHEAD
California Bar No.: 69653
Assistant U.S. Attorney
U.S. District Courthouse
Room 7516, Federal Building
300 North Los Angeles Street
Los Angeles, CA 90012
(213) 894-3987 (office)
(213) 894-2380 (fax)

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

MAZDA MOTOR OF AMERICA, INC., a corporation, Defendant.

Civil Action No.

CONSENT DECREE

WHEREAS: Plaintiff, the United States of America, has commenced this action by filing the Complaint herein; defendant has waived service of the Summons and Complaint; the parties have been represented by the attorneys whose names appear hereafter; and the parties have agreed to settlement of this action upon the following terms and conditions, without adjudication of any issue of fact or law and without defendant admitting liability for any of the matters alleged in the Complaint;

THEREFORE, on the joint motion of plaintiff and defendant, it is hereby ORDERED, ADJUDGED, and DECREED as follows:

1. This Court has jurisdiction of the subject matter and of the parties.

2. The Complaint states a claim upon which relief may be granted against defendant under Sections 5(l), 9, 13(b) and 16(a) of the Federal Trade Commission ("FTC") Act, 15 U.S.C.  45(l), 49, 53(b) and 56(a), as amended; Section 108(c) of the Truth in Lending Act, 15 U.S.C.  1607(c), as amended; the Consumer Leasing Act, 15 U.S.C.  1667-1667f, as amended; and its implementing Regulation M, 12 C.F.R.  213, as amended.

DEFINITIONS

3. As used in this Consent Decree:

(a.) "FTC's Order" shall mean the FTC Order in FTC Docket No. C-3714, a copy of which is attached hereto as Appendix A and made part of this Consent Decree;
 
(b.) "Consumer Leasing Act" or "CLA" refers to 15 U.S.C.  1667-1667f, as amended;
 
(c.) "Regulation M" refers to the Federal Reserve Board Regulation M, 12 C.F.R.  213, as amended;
 
(d.) "Official Staff Commentary on Regulation M" refers to the Official Staff Commentary on Regulation M, 12 C.F.R.  213, Supp. I., as amended;
 
(e.) "Advertisement" shall mean advertisement as defined in Section 213.2 of Regulation M, 12 C.F.R.  213.2.
 
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CIVIL PENALTY

4. Defendant, its successors and assigns, shall pay to plaintiff a civil penalty of Four Million Fifty Thousand Dollars ($4,050,000.00) pursuant to Section 5(l) of the FTC Act, 15 U.S.C.  45(l). Defendant shall make the payment required by this paragraph within fifteen (15) days of the date of entry of this Consent Decree by electronic fund transfer in accordance with the instructions provided by the Office of Consumer Litigation, Civil Division, U.S. Department of Justice, Washington, D.C. 20530 for appropriate disposition.

5. In the event of any default in payment, which default continues for ten (10) days beyond the due date of the payment, the entire unpaid penalty, together with interest, as computed pursuant to 28 U.S.C.  1961 from the date of default to the date of payment, shall immediately become due and payable.

INJUNCTION

6. Defendant, its successors and assigns, and its officers, agents, servants, employees, and attorneys, and all persons in active concert or participation with any one or more of them who receive actual notice of this Consent Decree by personal service or otherwise, are hereby permanently enjoined from violating, directly or through any corporation, subsidiary, division or other device:

(a.) any provision of the FTC's Order;
 
(b.) the CLA;
 
(c.) Regulation M; and
 
(d.) the Official Staff Commentary on Regulation M.

7. In the event the FTC's Order is hereafter amended or modified, defendant's compliance with the FTC's Order as amended or modified shall not be deemed a violation of this Consent Decree.

CONSUMER EDUCATION

8. For a period of twelve (12) months beginning no later than thirty (30) days from the date of entry of this Consent Decree, defendant shall acquire and provide copies of the Federal Reserve Board's brochure titled Keys to Vehicle Leasing to all of defendant's affiliated dealerships without charge and in sufficient quantity to be available for retention by each prospective purchaser or lessor, and shall take reasonable steps to ensure that dealerships maintain an adequate stock of brochures and make the brochures available, free of charge, to each prospective purchaser or lessee of a vehicle, by prominently displaying the brochures in each showroom in a location easily accessible to consumers.

PERSONS AFFECTED; CONTINUING JURISDICTION

9. Defendant, its successors and assigns, shall:

(a.) within thirty (30) days of the date of entry of this Consent Decree, provide a copy of this Consent Decree to each current principal, officer, director, manager, employee, agent and representative having any responsibility with respect to the subject matter of this Consent Decree, and to each current advertising agency, and shall secure from each such person or entity a signed statement acknowledging receipt of a copy of this Consent Decree; and
 
(b.) provide a copy of this Consent Decree to each future principal, officer, director, manager, employee, agent and representative having any responsibility with respect to the subject matter of this Consent Decree, and to each future advertising agency, within thirty (30) days after the person or entity assumes such position or responsibilities, and shall secure from each such person or entity a signed statement acknowledging receipt of a copy of this Consent Decree.

10. Defendant, its successors and assigns, shall, within thirty (30) days of the date of entry of this Consent Decree, provide to each of its dealers and dealer associations a copy of Regulation M, the Official Staff Commentary on Regulation M, and two FTC business education pamphlets titled Advertising Consumer Leases and How to Advertise Consumer Credit: Complying with the Law.

11. Defendant, its successors and assigns, shall, within ten (10) days after complying with paragraphs 9(a) and 10, file an affidavit with this Court and serve the FTC, by mailing a copy thereof, to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580, setting forth the fact and manner of its compliance with paragraphs 9(a) and 10, including the name and title of each person and name and address of each entity provided with the documents set forth in paragraphs 9(a) and 10.

12. For a period of five (5) years from the date of entry of this Consent Decree, defendant, its successors and assigns, shall maintain and make available to the FTC, within thirty (30) days of the date of receipt of a written request, business records demonstrating compliance with the terms and provisions of this Consent Decree.

13. Defendant is hereby required, in accordance with 31 U.S.C.  7701, to furnish to the FTC, within ten (10) days of the date of entry of this Consent Decree, its taxpayer identifying number (employer identification number), which shall be used for purposes of collecting and reporting on any delinquent amount arising out of defendant's relationship with the government.

14. This Court shall retain jurisdiction of this matter for the purposes of enabling either of the parties to this Consent Decree to apply to this Court at any time for such further orders or directives as may be necessary or appropriate for the interpretation or modification of this Consent Decree, for the enforcement of compliance therewith, or for the punishment of violations thereof.

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JUDGMENT IS THEREFORE ENTERED in favor of plaintiff and against defendant, pursuant to all the terms and conditions recited above.

Dated this day of , 1999.

_____________________________
UNITED STATES DISTRICT JUDGE

The parties, by their respective counsel, hereby consent to the terms and conditions of the Consent Decree as set forth above and consent to the entry thereof. Defendant waives any rights that may arise under the Equal Access to Justice Act, 28 U.S.C. 2412, amended by Pub. L. 104-121, 110 Stat. 847, 863-64 (1996).

FOR THE UNITED STATES OF AMERICA:

DAVID W. OGDEN
Acting Assistant Attorney General
Civil Division
U.S. Department of Justice

ALEJANDRO N. MAYORKAS
United States Attorney
Central District of California

By:

Assistant United States Attorney
California Bar No.:
Assistant U.S. Attorney
U.S. District Courthouse
Room 7516, Federal Building
300 North Los Angeles Street
Los Angeles, CA 90012
(213) 894-2434 (office)

EUGENE M. THIROLF
Director
Office of Consumer Litigation

_________________________________
ELIZABETH STEIN
Attorney
Office of Consumer Litigation
Civil Division
U.S. Department of Justice
Washington, D.C. 20530
(202) 307-0486

FOR THE FEDERAL TRADE COMMISSION:

ELAINE D. KOLISH
Associate Director for Enforcement

DAVID MEDINE
Associate Director for Financial
Practices

LAWRENCE HODAPP
Assistant Director for Enforcement

_________________________________
LOUISE R. JUNG

_________________________________
JOCK K. CHUNG

_________________________________
SALLY FORMAN PITOFSKY
Attorneys
Bureau of Consumer Protection
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, D.C. 20580
(202) 326-3318

FOR THE DEFENDANT:

MAZDA MOTOR OF AMERICA, INC.

By:

President
MAZDA MOTOR OF AMERICA, INC.

GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, NW
Washington, D.C. 20036
Attorney for Defendant
(202) 955-8526

By: _________________________________
MICHAEL L. DENGER
A Member of the Firm