As 2012 is coming to a close, Tesla Motors can begin to look back on some of its monumental success it experienced this year. However, it hasn’t been all sunshine and rainbows for the all-electric automaker in 2012 as Tesla was served with a lawsuit by state dealership groups in Massachusetts and New York last month. Today, a Massachusetts judge denied the request by the dealers association that asked for a preliminary injunction against Tesla from operating stores in the state until everything could be sorted out. The suit claimed that the all-electric automaker violated state licensing, consumer protection, and franchise laws in Massachusetts. The dealership groups looked to contest Tesla’s business strategy of owning and operating its own stores as opposed to handing out franchises like many other automakers do. In all, 48 states prohibit or heavily curb factories from owning dealerships.
The suit submitted by the dealers association seeks to have Tesla’s store in Natick, Mass., which opened back in late September, to be nothing more than a model display until the automaker can conform to the state’s laws. To score an injunction, Massachusetts federal court requires plaintiffs to prove that they will win the case that would have otherwise caused severe and lasting damage. Although the dealers association may not agree with the court’s decision, Tesla did.
“Tesla looks forward to continuing to focus on advancing the knowledge of EVs in a convenient, accessible environment,” said Tesla spokeswoman Shanna Hendriks in an email to Automotive News. “We remain hopeful for a positive outcome of this case.”
The Massachusetts State Automobile Dealers Association is planning on appealing the judge’s decision. Currently, Robert O’Koniewski, executive vice president of the Massachusetts association is still exploring the appeals process and other legal avenues as well.
“Dropping the lawsuit is not an option at this point,” O’Koniewski told Automotive New. “We feel very strongly that Tesla is operating a factory store outside parameters of our franchise law and our license law, and they are operating that store illegally.”
This situation is a fluid one and we expect more details in the coming weeks so stay tuned.