Justice Upriser

Tesla Prevails in Top Massachusetts Court Over Direct Sales

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Monday Massachusetts’ highest court ruled in favor of Tesla motors by throwing out a lawsuit seeking to block Tesla Motors Inc (TSLA.O) from selling its luxury electric cars directly to consumers in the state. This will enable Tesla to bypass traditional dealerships.

The state’s Supreme Judicial Court was unanimous in concluding that the Massachusetts State Automobile Dealers Association and two dealers lacked standing to block direct Tesla sales under a state law designed to protect franchise owners from abuses by car manufacturers.

>Justice Margot Botsford wrote that the law was aimed at protecting dealers from unfair practices of manufacturers and distributors “with which they are associated, generally in a franchise relationship,” rather than unaffiliated manufacturers.

>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,” she wrote.

>”Contrary to the plaintiffs’ assertion,” she added, “the type of competitive injury they describe between unaffiliated entities is not within the statute’s area of concern.”

Tesla has been accused of operating a showroom in Natick, Massachusetts without a license and in violation of a law prohibiting a manufacturer from owning a dealership.

“We’re disappointed,” Robert O’Koniewski, a spokesman for the group, said of the ruling.

Tesla, welcomed Monday’s decision.

>”It’s a great decision,” Maron said. “The statute is very similar to statutes in other states. We have battles in New Jersey and other states with similar constructs, and we hope and expect the same interpretation would carry over to those venues.”

Tesla currently cannot conduct direct sales in New Jersey, Arizona, Maryland and Texas.

In another bit of good news Nevada recently let Tesla make direct car sales to residents, as part of an arrangement to provide .3 billion of tax breaks for the company to build a giant battery factory.


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“Tesla Prevails in Top Massachusetts Court Over Direct Sales”