Tesla has landed yet another blow to dealership laws, with the Massachusetts High Court throwing out a lawsuit barring the company from selling vehicles directly to consumers in the state. One-by-one it seems, Tesla is breaking down sales barriers.
For the past several months or the greater part of the year, Tesla has been making news as it tries to reverse decades-old dealership laws, which have come under scrutiny for being one-sided and protectionist for automotive dealers. With a win in Massachusetts, Tesla is gaining new traction for its fight and may use the new legal “ammo” to help further its case around the country.
In Massachusetts, two dealerships along with the Massachusetts State Automobile Dealers Association (MSADA) filed suit against Tesla’s plan to sell its Model S and future vehicles in the state. The dealers and state association referenced a law which makes it illegal for an automaker to operate “a motor vehicle dealership within the relevant market area of a motor vehicle dealer of the same line make”. They claimed this law applied to Tesla and therefore made it illegal for the automaker to open up dealerships in the state.
The Massachusetts Supreme Judicial Court disagreed. The court ruled the plaintiffs had no legal standing in the case since they weren’t affiliated with Tesla. Also, Judge Margot Botsford wrote that the law “was intended and understood only to prohibit manufacturer-owned dealerships when, unlike Tesla, the manufacturer already had an affiliated dealer or dealers in Massachusetts.” Since Tesla doesn’t have any dealers in the state, the law doesn’t apply to it.
This is a blow for established dealers who want to either bar Tesla from being a competitor to their products or want to become a Tesla store (we are guessing the later). With Tesla circumventing their dealership model, these dealers will be left out in the cold.
The win equips Tesla with legal precedence that it can use elsewhere around the country. Currently, there is an appeal in New Jersey; others will likely be filed in the other Tesla-barring states of Texas, Arizona, and Maryland.