Commission approves reduced penalties, orders licensed salespeople at three auction locations

The Tennessee Motor Vehicle Commission on Jan. 28 approved an amended legal report calling for $5,000 civil penalties for unlicensed-salesperson activity at three dealer locations tied to a single auction company and required each respondent to secure a licensed salesperson within 10 days.

Commissioners said the cases involved the same business operating at three separate locations that had not held required salesperson licenses since 2017 despite reporting a small number of retail-titled vehicles on annual sales reports. Legal staff told the commission auditor inspection records had not identified the missing licenses until recently.

The commission’s legal committee members discussed possible mitigating factors, including the business’s auction structure, the fact the errors dated to 2017, and that the entities had filed annual sales reports. Committee members said they favored a reduced penalty rather than the much larger statutory total that would have resulted from counting each untitled vehicle at the standard per-vehicle civil-penalty amount. The legal committee recommended $5,000 penalties for each of the three matters and the 10-day compliance window; the committee forwarded the amended recommendation for full-commission adoption.

At the full commission roll call vote to adopt the legal report as amended, most commissioners voted aye and Commissioner Norton recorded an abstention. The commission’s legal staff said the amended discipline will be reflected in consent orders and that the consent orders will include a requirement that respondents obtain a licensed salesperson within 10 days of the order.

Commissioners and staff also discussed how the commission will handle similar cases going forward. Legal staff said the commission has recently increased the per-violation citation amount from $500 to $1,000 and that, when aggregate fines would be very large, the program will cap liability and consider mitigating circumstances. Staff proposed adding a requirement to consent orders that respondents come into compliance within a specified number of days to prevent recurrence; commissioners agreed that follow-up should be standard where a letter of warning is issued and that repeat violations would be treated more harshly.

The legal report changes were adopted as amended by the full commission. The amended recommendations covered the three auction-related matters and other, separate edits to wording in the legal report dealing with unrelated items.

Commissioners asked staff to do outreach to auction operators to clarify Tennessee requirements and to spot-check auction annual reports statewide. Executive staff said they would follow up and provide a summary at a future meeting.

Votes at a glance: the commission adopted the legal report as amended; the roll-call vote on the full report showed a majority of ayes and one abstention by Commissioner Norton.