Court to consider whether car dealers can sue to keep Tesla out of the state

The Supreme Judicial Court next week hears arguments on whether existing car dealers can sue to keep Tesla Motors from offering its electric cars directly to the public, rather than through franchised dealers.

A Norfolk Superior Court judge said the existing car dealers had no standing to sue Tesla for alleged unfair competition because the state law that bans direct manufacturer sales refers only to competition between car makers and their affiliated franchisees.

But in their brief to the state's highest court, the Massachusetts State Automobile Association, Herb Connolly, who owns a Chevy dealership in Framingham and Jake Kaplan, who owns a Land Rover dealership in Norwood (and who formerly owned a dealership for Fisker - a Tesla competitor that went bankrupt), argue that's bunk, that the law is not that specific and that Tesla would get an unfair advantage by trying to evade state consumer-protection laws.

They are asking the court to rule that they do, in fact, have standing to sue and to reinstate their lawsuit.

Bunk on you, Tesla argues in its own brief, saying the law is pretty clearly written, that neither of the two named dealers are being harmed directly by Tesla, since they're not Tesla dealers and that the fact that they might lose business to a superior product is not a good enough reason to try to subvert the law.

The court hears argument on Tuesday at 9 a.m. in the John Adams Courthouse downtown. Docket and briefs.



Free tagging: 

PDF icon Car dealers' brief1.91 MB
PDF icon Tesla's brief2.37 MB


Yeah, it's a really awful interface

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The stuff in gray at the top is actually useful meta-information, but the way it's laid out, you have no idea there's anything underneath it, like, say, the text of the law you're looking for. So whenever you see a link to a law at (and am I the only one to think it's stupid the legislature has its own Web site rather than sitting under, skip the gray stuff at the top and scroll down and you'll find the text of the law you wanted to see.


Tesla would get an unfair advantage by trying to evade state consumer-protection laws.

Yes, how dare Tesla sell their cars for less than a dealer could. That would totally be anti-consumer.

The first

group I think of when I think of a defenders of the consumer is auto dealers.

To be fair to the car dealers

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And yes, I just said that, but in any case, their brief doesn't really argue that they're standing up for consumers, because that might be a bit much to swallow, but that the cost of complying with our consumer-protection laws puts them at an unfair advantage compared to Tesla, which they claim is trying to evade those laws (for example, through a sales-contract provision requiring disputes to be settled under the laws of Florida, rather than Massachusetts).

Maybe something to consider

Maybe something to consider for the MBTA. "We're now operating out of the state of Florida, so the executive offices will now be in Miami."

Only if your life is

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Only if your life is threatened. Which with the level of maintenance on the MBTA is a daily occurrence.

Even though I never imagined

Even though I never imagined in my whole life that there would come a time in my life where I would write the following sentence, here it is.

There is a legitimate purpose for car dealers.

Pretty early on in the history of car sales, when they became mass produced items, the manufactures faces the problem of how to distribute and sell their products around the country. It quickly became obvious that using a network of local sales oriented businesses, who had connections and reputations in there local communities was the way to go.

More recently in the post Ralph Nader/NHSA era, dealerships provide a way for easily distribute parts and repair information for brand new models.

On it's surface it's difficult to see why Mass car dealers would have a legal beef with Tesla and it's Dealer Direct Sales model as Tesla will in all probability be a boutique product for a very small, niche market. I suspect that there real intention is to establish some protective legal precedent that will prevent GM, Toyota and other mainline car manufacturers from developing a Manufacturer to Customer model that bypasses dealers.

Two things about Manufacturer to Customer car sales to really be afraid of:

  1. Ernie Boch Jr. appearing on TV even more than he does now, protesting this.
  2. Tesla, developing Amazon style of drone delivery, where large drones deliver Tesla automobiles directly to customers driveways.

At least MA is being consistent

In North Carolina, they had droves of all the regular anti-government regulation "small business gets a license to kill" types crying poverty and throwing fits if their Governor didn't do something about these internet interlopers!

It was most hilarious ... un-self-aware contradiction on the scale of a young teen demanding autonomy and a ride to the mall.

I would love to see one of

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I would love to see one of those Amazon drones delivery a tesla to that driveway in Back Bay or Beacon Hill, but I digress.

I think you're spot on in that they want to set legal precedent for all manufacturers that direct to consumer sales are illegal in MA.

GoogleCar anyone?

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How about self driving cars which deliver themselves to their new owner's driveways?

Yes but no.

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"More recently in the post Ralph Nader/NHSA era, dealerships provide a way for easily distribute parts and repair information for brand new models."

The internet and vastly improved supply chains totally negate this.

The other popular leg of the argument is that car dealers are the backbones of the community funding school activities, local teams, etc.. and while that's true it's nothing which should be guaranteed by the state or federal government.

It's protectionism for the benefit of GOP/Chamber of Commerce types* which is particularly odious.

* Mostly. I know Boch is a liberal but I'm pretty confident car dealers are on average GOP type.


I know Boch is a liberal but I'm pretty confident car dealers are on average GOP type.

I don't know his politics but it dosen't take a genius to think that if MA is one of the most democrat leaning in the country you should side with the party which has the power to help you the most.

These guys are all scum and so are their arguments. They act as if little league would disappear if it wasn't for them. It's just advertising as far as their accounting people are concerned -- they couldn't care less about the town or the locals.

State imposed monopolies need to go.

It must be nice to have state

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It must be nice to have state laws guaranteeing your industry's right to exist, even when technology makes it obsolete.