Opinion ID: 1357706
Heading Depth: 3
Heading Rank: 2

Heading: 404.03, Dealer Added Charges

Text: (7a) Regulation 404.03 provides as follows: Dealer Added Charges. A dealer may not identify a separate charge or charges for services performed on vehicles prior to delivery to the extent the dealer is or will be reimbursed for such expenditures by another party. If a dealer does identify a separate charge or charges for delivery and preparation services performed over and above those delivery and preparation obligations specified by the franchisor and for which the dealer is to be reimbursed by the franchisor, then the services performed and the charges therefor shall be separately itemized. Such added charges must be included in the advertised price. (Cal. Admin. Code, tit. 13, § 404.03.) The trial court held this regulation invalid as beyond the scope of the authorizing statute, section 11713, subdivision (a). The DMV contends that the regulation is designed to prevent a specific kind of misleading statement, and as such is authorized by the broad statutory prohibition against false and misleading statements. The Ford Dealers argue both that the regulation goes beyond the scope of the statute and that it bars statements that are not in fact false or misleading. (8) An administrative agency is not limited to the exact provisions of a statute in adopting regulations to enforce its mandate. [T]he absence of any specific [statutory] provisions regarding the regulation of [an issue] does not mean that such a regulation exceeds statutory authority.... ( Credit Ins. Gen. Agents Assn. v. Payne (1976) 16 Cal.3d 651, 656 [128 Cal. Rptr. 881, 547 P.2d 993]; Ralphs Grocery Co. v. Reimel, supra, 69 Cal.2d at p. 176, fn. 3.) (7b) The DMV is authorized to `fill up the details' of the statutory scheme. ( Kugler v. Yocum (1968) 69 Cal.2d 371, 376 [71 Cal. Rptr. 687, 445 P.2d 303].) A regulation barring a specific class of misleading statements falls within the authority of the DMV under this statute. In addition, the DMV clearly has the discretion to decide that statements such as those at issue here are inherently misleading. Interpreting the identical language of Business and Professions Code section 17500, this court said, a statement is false or misleading if members of the public are likely to be deceived....`The statute affords protection against the probability or likelihood as well as the actuality of deception....' [Citations.] ( Chern v. Bank of America, supra, 15 Cal.3d at p. 876; see also Fletcher v. Security Pacific National Bank (1979) 23 Cal.3d 442, 451 [153 Cal. Rptr. 28, 591 P.2d 51].) It is within the authority of the DMV to conclude that consumers confronted with an itemized charge for services performed on their automobile will assume that they are paying extra to purchase those specific services. Where that is not in fact the case, because the dealer has already been paid for the services, the DMV could reasonably conclude that such an itemized charge is inherently misleading. The trial court's ruling that regulation 404.03 is beyond the scope of the agency's authority was erroneous.