Mass. Auto Dealers Lawsuit Against Tesla Dismissed
Tesla Motors has announced that a Superior Court judge in Norfolk County dismissed a case brought against the electric car company by the Massachusetts State Automobile Dealers Association (MSADA).
According to Palo Alto, Calif.-based Tesla, the judge dismissed the case based on a lack of standing and failure to state a claim.
The MSADA had argued that state law prevented Tesla from selling its vehicles through manufacturer-owned dealerships when it sought to open one in Natick.
"We are delighted by the outright dismissal of this case and the validation that we are operating our business in compliance with the laws and expectations of the commonwealth of Massachusetts," Tesla Co-Founder and CEO Elon Musk said in a statement.
Several months ago, a judge also denied a temporary restraining order and preliminary injunction the dealers association had requested.
“We disagree with the judge’s reasoning on the standing issue,” said Robert O’Koniewski, executive vice president of MSADA. “It’s not as if this is fatal, it’s just another inning in this nine-inning ball game with Tesla.”
He said changes in 2002 to the franchise laws in Massachusetts say a manufacturer cannot own a dealership.
In December, Tesla was granted a Class-1 dealer license by Natick’s board of selectmen for property at 251 W. Central St. Tesla spokeswoman Shanna Hendriks said the company takes reservations for vehicles there and gives customers an opportunity for test drives. The company also has a showroom in the Natick Mall, which it opened in September. Hendriks said that location is used to educate the public about the vehicles. However, cars aren’t sold out there because it’s not zoned to be a dealership.
The MSADA has also filed suit against the board of selectmen. In the statement, Musk called the suit against the selectmen “very unfortunate” and said his company will support the board in the case.
O’Koniewski said his group is suing to have the board to revoke Tesla’s license.
Going against the grain of traditional auto dealerships, Tesla eliminates the middleman by not utilizing franchises to sell its vehicles. Instead, customers come into a store to learn about Tesla through videos, interactive displays and are able to design their own Model S car on a large touchscreen.
The MSADA has 30 days to file a notice of appeal. O’Koniewski said the association hasn’t made a decision on whether it will appeal.
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