UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

UNITED STATES OF AMERICA, Plaintiff

v.

SUNTRUP BUICK-PONTIAC-GMC TRUCK, INC., and
SUNTRUP FORD, INC., corporations, and
THOMAS SUNTRUP, individually and as an officer of the corporations,
Defendants.

Civil Action No.

COMPLAINT FOR CIVIL PENALTIES, INJUNCTIVE AND OTHER RELIEF

INTRODUCTION

Plaintiff, the United States of America, acting upon notification and authorization to the Attorney General by the Federal Trade Commission ("FTC"), for its complaint alleges that:

1. Plaintiff brings this action under Sections 5(l), 9, 13(b), and 16(a) of the FTC Act, 15 U.S.C.  45(l), 49, 53(b), and 56(a), as amended; the Consumer Leasing Act ("CLA"),

15 U.S.C.  1667-1667f, as amended; and its implementing Regulation M, 12 C.F.R.  213, as amended; the Truth In Lending Act ("TILA"), 15 U.S.C.  1601-1667, as amended; and its implementing Regulation Z, 12 C.F.R.  226, as amended; to obtain monetary civil penalties, and injunctive and other relief for defendants' violations of a final cease and desist order issued by the FTC.

JURISDICTION AND VENUE

2. This Court has jurisdiction over this matter under 28 U.S.C.  1331, 1337(a), 1345, and 1355 and under 15 U.S.C.  45(l), 49, 53(b), 56(a), and 1607(c).

3. Venue in the Eastern District of Missouri is proper under 15 U.S.C.  53(b) and under 28 U.S.C.  1391(b-c) and 1395(a).

DEFENDANTS

4. Defendant Suntrup Buick-Pontiac-GMC Truck, Inc. ("Suntrup Buick") is a Delaware corporation with its office and principal place of business located within the Eastern District of Missouri at 4200 N. Service Road, St. Peters, Missouri 63376. Suntrup Buick transacts business in the Eastern District of Missouri.

5. Defendant Suntrup Ford, Inc. ("Suntrup Ford") is a Delaware corporation with its office and principal place of business located within the Eastern District of Missouri at 12750 Saint Charles Rock Road, Bridgeton, Missouri 63044. Suntrup Ford transacts business in the Eastern District of Missouri.

6. Defendant Thomas Suntrup ("Suntrup") is an officer of the corporate defendants. His business address is the same as that of Suntrup Buick and Suntrup Ford. Individually or in concert with others, Suntrup has formulated, directed, and controlled the acts and practices of the corporate defendants, including the various acts and practices set forth in this complaint. In connection with the matters alleged herein, Suntrup transacts business in the Eastern District of Missouri.

DEFENDANTS' COURSE OF CONDUCT

7. At all times material herein, defendants have maintained a course of trade in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.  44, by disseminating or by causing the dissemination of advertisements to the public that promote consumer leases, as the terms "advertisement" and "consumer lease" are defined in Section 213.2 of Regulation M, 12 C.F.R.  213.2, as amended.

8. At all times material herein, defendants have maintained a course of trade in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.  44, by disseminating or by causing the dissemination of advertisements to the public that promote the extension of consumer credit, as the terms "advertisement" and "consumer credit" are defined in Section 226.2 of Regulation Z, 12 C.F.R.  226.2, as amended.

PRIOR FTC PROCEEDING

9. In an FTC administrative proceeding bearing Docket No. C-3779, the FTC's Complaint charged, in pertinent part, that defendants disseminated or caused to be disseminated consumer lease advertisements for vehicles that failed to disclose and/or failed to disclose adequately terms for leasing the advertised vehicles.

10. In the same proceeding referred to in Paragraph 9, the FTC's Complaint also charged, in pertinent part, that defendants disseminated or caused to be disseminated consumer credit advertisements for vehicles that failed to disclose terms for financing the purchase of the advertised vehicles.

11. On January 5, 1998, the FTC issued a Decision and Order ("FTC's Order") against Suntrup Buick and Suntrup Ford, their successors, assigns, and officers, and Thomas Suntrup, and each of their agents, representatives, and employees, to cease and desist from, among other things, failing to make clearly and conspicuously certain enumerated disclosures in connection with any advertisement to aid, promote, or assist, directly or indirectly, any consumer lease or extension of consumer credit in or affecting commerce. A copy of the FTC's Order is attached to this Complaint as Exhibit A.

12. The FTC's Order was served upon defendants on or about January 10, 1998, became final and enforceable by operation of law on that date, and has remained in full force and effect ever since that date.

13. In pertinent part, Part I of the FTC's Order prohibits defendants, in connection with any advertisement for a consumer lease, from stating certain enumerated terms for the consumer lease being offered, unless the advertisement also clearly and conspicuously discloses other enumerated terms for that consumer lease. More specifically, defendants may not state (i) the amount of any payment or (ii) that any or no initial payment is required at lease inception, without also disclosing clearly and conspicuously (a) that the transaction advertised is a lease, (b) the total amount due prior to or at consummation or by delivery, if delivery occurs after consummation, (c) the number, amounts, and due dates or periods of scheduled payments under the lease, (d) a statement of whether or not a security deposit is required, and (e) a statement that an extra charge may be imposed at the end of the lease term where the lessee's liability (if any) is based on the difference between the residual value of the leased property and its realized value at the end of the lease term.

14. In pertinent part, Part II(A) of the FTC's Order prohibits defendants, in connection with any advertisement to promote any extension of consumer credit, from stating certain enumerated terms for the consumer credit being offered unless the advertisement also clearly and conspicuously discloses other enumerated terms for that consumer credit. More specifically, defendants may not state (i) the amount or percentage of any downpayment, (ii) the number of payments or period of repayment, (iii) the amount of any payment, or (iv) the amount of any finance charge, without also disclosing clearly and conspicuously (a) the amount or percentage of the downpayment, (b) the terms of repayment, and (c) the "annual percentage rate," using that term, and, if the rate may be increased after consummation, that fact. In pertinent part, Part II(B) also prohibits the defendants from stating a rate of finance charge without stating the rate as an "annual percentage rate" or the abbreviation "APR."

15. In pertinent part, Definition 1 (parts a and b) of the FTC's Order states:

"Clearly and conspicuously" shall mean as follows:

a. In a television or video advertisement, the audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. The video disclosure shall be of a size and shade, and shall appear on the screen for a duration, sufficient for an ordinary consumer to read and comprehend it.

b. In a print advertisement, the disclosure shall be in a type size, location, and in print that contrasts with the background against which it appears, sufficient for an ordinary consumer to notice, read, and comprehend it.

FIRST CAUSE OF ACTION

16. Since about January 10, 1998, defendants disseminated or caused the dissemination of advertisements to promote, directly or indirectly, consumer leases for vehicles, as "advertisement" and "consumer lease" are defined in Section 213.2 of Regulation M, 12 C.F.R.  213.2, as amended, including but not limited to the television advertisements attached as Exhibits B and C (in transcribed format).

17. In numerous instances, the advertisements for consumer leases for vehicles described in Paragraph 16 stated the amount of any payment or that any or no initial payment was required at lease inception, but:

A. Omitted disclosures required by Part I(C) of the FTC's Order, including but not limited to a statement of whether or not a security deposit is required, and/or

B. Failed to state all required disclosures "clearly and conspicuously," as that term is defined in Definition 1 of the FTC's Order, including but not limited to the total amount due prior to or at lease consummation. These disclosures were not stated "clearly and conspicuously," because, among other deficiencies, they appeared in small type, for a short duration, or were accompanied by distracting sounds or images.

18. By failing to make the disclosures required by Part I(C) of the FTC's Order, and/or failing to make the required disclosures "clearly and conspicuously," as that term is defined in Definition 1 of the FTC's Order, defendants violated Part I(C) of the FTC's Order.

SECOND CAUSE OF ACTION

19. Since about January 10, 1998, defendants disseminated or caused the dissemination of advertisements to promote, directly or indirectly, the extension of consumer credit for vehicles, as "advertisement" and "consumer credit" are defined in Section 226.2 of Regulation Z, 12 C.F.R.  226.2, as amended, including but not limited to the television advertisement attached as Exhibit D (in transcribed format).

20. In numerous instances, the advertisements for consumer credit for vehicles described in Paragraph 19 stated the amount or percentage of any downpayment, the number of payments or period of repayment, the amount of any payment, or the amount of any finance charge, but failed to state the disclosures as required by Part II(A) of the FTC's Order.

21. By failing to make the disclosures required by Part II(A) of the FTC's Order, defendants violated Part II(A) of the FTC's Order.

THIRD CAUSE OF ACTION

22. Since about January 10, 1998, defendants disseminated or caused the dissemination of advertisements to promote, directly or indirectly, the extension of consumer credit for vehicles, as "advertisement" and "consumer credit" are defined in Section 226.2 of Regulation Z, 12 C.F.R.  226.2, as amended, including but not limited to the television advertisement attached as Exhibit E (in transcribed format).

23. In numerous instances, the advertisements for consumer credit for vehicles described in Paragraph 22 failed to state the rate of finance charge as an "annual percentage rate" or the abbreviation "APR," as required by Part II(B) of the FTC's Order.

24. By failing to make the disclosures required by Part II(B) of the FTC's Order, defendants violated Part II(B) of the FTC's Order.

CIVIL PENALTIES AND INJUNCTION

25. Each failure by defendants to make the required disclosures, and/or to make the required disclosures "clearly and conspicuously" (as that term is defined in Definition 1 of the FTC's Order), as set forth in Paragraphs 17, 20, and 23 above, constitutes a separate violation of the FTC's Order for which plaintiff seeks monetary civil penalties.

26. Section 5(l) of the FTC Act, 15 U.S.C.  45(l), as modified by Section 4 of the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C.  2461, and Section 1.98(c) of the FTC's Rules of Practice, 16 C.F.R.  1.98(c), authorizes this Court to award monetary civil penalties of not more than $11,000 for each such violation of the FTC's Order.

27. Under Sections 5(l) and 13(b) of the FTC Act, 15 U.S.C.  45(l) and 53(b), this Court is authorized to issue a permanent injunction against defendants' violating the FTC Act and the FTC's Order, and to grant ancillary relief.

PRAYER

WHEREFORE, plaintiff requests this Court, pursuant to 15 U.S.C.  45(l), 49, and 53(b), and to this Court's own equity powers:

(1) Enter judgment against defendants and in favor of plaintiff for each violation alleged in this complaint;

(2) Award plaintiff monetary civil penalties from defendants for each violation of the FTC's Order alleged in this complaint;

(3) Enjoin defendants from further violating the FTC's Order; and

(4) Award plaintiff such additional relief as this Court may deem just and proper.

DATED:

Of Counsel:

FOR THE UNITED STATES OF AMERICA:

ELAINE D. KOLISH
Associate Director for Enforcement

LAWRENCE HODAPP
Assistant Director for Enforcement

JOCK K. CHUNG
SALLY FORMAN PITOFSKY
Attorneys
Bureau of Consumer Protection
Federal Trade Commission
Washington, D.C. 20580

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

MICHAEL L. REAP
United States Attorney
Eastern District of Missouri

_________________________________
Assistant United States Attorney
1114 Market Street, Room 401
St. Louis, MO 63101
(314) 539-2200

EUGENE M. THIROLF
Director
Office of Consumer Litigation

DOUGLAS ROSS
Attorney
Office of Consumer Litigation
Civil Division
U.S. Department of Justice
Washington, D.C. 20530
(202) 514-1874

Exhibit A