Large auto dealer chains and powerful auto dealer associations have no legal standing to block Tesla Motors from selling its luxury electric cars directly to customers in the Commonwealth of Massachusetts.
That’s the unanimous verdict of the state’s highest court, the Massachusetts Supreme Judicial Court, which ruled that a claim made by auto dealers trying to ban Tesla Motors [NASDAQ:TSLA] from selling direct to customers within the state had “no legal standing.”
The plaintiffs — including Herb Connolly Chevrolet, Fisker Norwood and a massive trade association of various well-known Massachusetts car dealerships — had tried to invoke a Massachusetts law known as Chapter 93B designed to prohibit automakers from evading state law and operate a dealership without the correct licenses.
But as Justice Barbara Lenk wrote on behalf of the court in the unanimous decision, the law could not be invoked because the plaintiffs were not Tesla Franchisees and thus could not use Chapter 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 said in her judgement. “We therefore affirm the judgment of the Superior Court dismissing the plaintiffs’ action on the basis of lack of standing.’’
Since the case was first submitted to the courts, Tesla has obtained a dealer licence from officials in Natick. Today’s ruling will ensure it can continue to sell cars direct to customers within the Commonwealth of Massachusetts, and will no doubt serve as a boost to Tesla fans in other states where similar litigation is being filed against the plug-in automaker.
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