For the third and final time, a Massachusetts court has rejected a lawsuit by car dealers seeking to stop Tesla sales in the Bay State, reports the Boston Globe. The Supreme Judicial Court has cleared the way for Tesla’s direct sales model while simultaneously setting back nationwide efforts of car dealers to halt the march of progress.
It’s been about two years since the initial lawsuit was filed against Tesla, and it was one of the first such lawsuits filed with the intent of stopping the direct sales model. The Massachusetts State Auto Dealers Association quoted Chapter 93B, which prevents auto manufacturers from operating competing car dealerships in a state where they also franchised car dealers. Because Tesla doesn’t have any established dealership franchises in the state though, Justice Barbara Lenk agreed with two previous court decisions that said the auto dealers have no legal standing to us 93B against Tesla.
“Chapter 93B is aimed primarily at protecting motor vehicle dealers from injury caused by the unfair business practices of manufacturers and distributors with which they are associated, generally in a franchise relationship,’’ Lenk wrote. “We therefore affirm the judgment of the Superior Court dismissing the plaintiffs’ action on the basis of lack of standing.’’
The ruling is likely to be replicated in other states like Ohio and New Jersey, where similar lawsuits from auto dealer associations have popped up. Some states like Washington proactively passed pro-Tesla bills though others, including Texas, remain firmly in the grip of well-financed and connected car dealers, despite high-profile allies like Governor Rick Perry and the CEO of America’s largest used car dealer company. To me, direct car sales is a hugely important battle for consumer rights, as many Americans regularly rank car buying as one of their least favorite consumer experiences.
The Tesla direct sales model has dealership associations running scared, even though to date Tesla has sold less than 50,000 vehicles worldwide. This has led dealership associations are starting to resort to fictitious scare tactics to turn consumers against Tesla in a bid to keep their monopoly on car sales. Meanwhile conventional automakers are quietly watching from the sidelines, no doubt salivating at the prospect of selling their products directly to customers as well.
Though Tesla has won a major victory in Massachusetts, the war for direct car sales is far from over. Where will the next battleground be?