Jones v 636 Texas Automobile Dealerships
Texas Auto Buyers Receive Class Certification in Action Challenging Their Payment of "Dealers Inventory Tax"
The class has been certified in an action filed against 636 Texas auto dealerships on behalf of certain car buyers who purchased cars after September 1, 1995, and were forced to pay "dealers inventory tax" to the dealerships in violation of the Texas Deceptive Trade Practices Act. The action seeks unspecified compensatory and punitive damages.
Named plaintiff Jett Jones alleges that the auto dealer from whom he purchased a vehicle added to the negotiated price a charge for a vehicle inventory tax, either misrepresenting that the tax was to be paid by the purchaser or failing to disclose that it was actually owed by the dealer. Allegedly, all 636 car dealerships named in the action conspired to pass on this tax to unwary consumers.
The court noted the amount of money involved in the tax was set out on each separate sales sheet and could be easily and quickly ascertained and applied. The court ruled that the keystone of the action lies in the nature of the term used by each dealership to describe the tax. If the term "dealers inventory tax" was used in a sales document, the court concluded the purchaser does not qualify as a member of the class. If one of 29 other less accurate or descriptive terms was used to describe the charge, then the buyer qualifies as a member of the class.
The certification was affirmed by the Texas Court of Appeals, and a decision by the Texas Supreme Court is pending.
