Automotive News: Tesla wins first round in Massachusetts dealers lawsuit

[kevincwelch]

There is a thread on the Tesla website, but I cannot view it. Is this the case for others? (I am logged on as well.)

[Norbert]

+1 ckessel. saved.

Dealers trying to be tough, already planning to appeal:

Robert O'Koniewski, executive vice president of the Massachusetts association, says the group is considering an appeal and other judicial remedies, but it hasn't made a decision on which path to take.

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“There is nothing in American Honda to suggest that the legislative purpose to protect the public expands standing under 15(a) to allow any unaffiliated motor vehicle dealer to sue any manufacturer”.
So the motion was denied because the plaintiffs had no standing to bring suit. and if they have no standing to bring suit, then how will they win the lawsuit?

Thanks for the quote, as the link is hard to discover:
http://www.autonews.com/assets/PDF/CA840581120.PDF

and the rationale that the plaintiffs don't have standing makes sense to me: they're not being directly wronged, and there's no public interest in allowing a Fisker dealer to sue Tesla motors for the way Tesla Motors treats its [nonexistent] dealers.

In my naive, non-lawyer, non-expert reading, 93B seemed to apply to the two parties of a franchise agreement, but there is not any such agreement between Tesla and anyone else.

[Grendal]

If the decision only said "denied", I'd agree with you, but I think the text of the decision reads a bit stronger than a "well, they're not blatantly breaking the law enough".

“There is nothing in American Honda to suggest that the legislative purpose to protect the public expands standing under 15(a) to allow any unaffiliated motor vehicle dealer to sue any manufacturer”.
So the motion was denied because the plaintiffs had no standing to bring suit. and if they have no standing to bring suit, then how will they win the lawsuit?

and the rationale that the plaintiffs don't have standing makes sense to me: they're not being directly wronged, and there's no public interest in allowing a Fisker dealer to sue Tesla motors for the way Tesla Motors treats its [nonexistent] dealers.

The judge threw out the injuction, but didn't just throw out the case. So as far as he is concerned there is at least a basis for the case. Like I wrote, I consider this a "soft" win.

The quote you cited does imply that the suit is probably going to fail.

Yeah, for our side.

[v12 to 12v]

The judge threw out the injuction, but didn't just throw out the case. So as far as he is concerned there is at least a basis for the case. Like I wrote, I consider this a "soft" win.

The quote you cited does imply that the suit is probably going to fail.

Yeah, for our side.

Sometimes cases will continue in order to get the facts heard and the opinion on the record. That can do a better job of "nipping it in the bud" for the long haul than just throwing it out. Attorneys and justices would then have something to reference in the future if this crops up again.

[woof]

Some questions for the legally minded:

If there really is a Mass. law that is being broken, doesn't that mean the state has to bring charges against Tesla, not dealers?

If the above is true, and the state is allowing it anyway, then wouldn't the dealer's beef be with the state for allowing it? The dealers could sue the state to get them to enforce the law, but not sue Tesla directly.

Wasn't there a complaint to the town of Natick selectmen for allowing the Tesla store in the mall (zoning or somesuch). Whatever happened to that?

[Grendal]

Here is a section of the Massachusetts law that NADA is saying Tesla is breaking:

“Sale” or “sell”, the issuance, transfer, agreement for transfer, exchange, pledge, hypothecation, mortgage in any form, whether by transfer in trust or otherwise, or lease of any motor vehicle or interest therein or of any franchise related thereto; and any option, subscription or other contract, or solicitation, looking to a sale, offer or attempt to sell, or lease in any form, whether spoken or written."

"(c) It shall be deemed a violation of subsection (a) of section 3 for a manufacturer, distributor or franchisor representative:

(10) to own or operate, either directly or indirectly through any subsidiary, parent company or firm, a motor vehicle dealership located in the commonwealth of the same line make as any of the vehicles manufactured, assembled or distributed by the manufacturer or distributor."

And here is a link to the appropriate law in full:

General Laws: CHAPTER 93B, Section 4

[Norbert]

Here is a section of the Massachusetts law that NADA is saying Tesla is breaking:

As far as I can tell, that section needs to be seen in context:

Chapter 93B as a whole is a "REGULATION OF BUSINESS PRACTICES BETWEEN MOTOR VEHICLE MANUFACTURERS, DISTRIBUTORS AND DEALERS"

And in Section 1, a dealer is defined as:

“Dealer”, “motor vehicle dealer” or “dealership”, any person who, in the ordinary course of its business, is engaged in the business of selling new motor vehicles to consumers or other end users pursuant to a franchise agreement and who has obtained a class 1 license pursuant to the provisions of section 58 and 59 of chapter 140. It shall not include: (1) receivers, trustees, administrators, executors, guardians, or other persons appointed by or acting under judgment, decree or order of any court, or (2) public officers while performing their duties as such officers.

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In other words, operating a dealership would be a violation of the business practices between a manufacturer and a franchised dealer, however there isn't any franchised dealer in this business. And not even a business (the practices of which could be regulated).

In my naive understanding.

[RDoc]

As far as I can tell, that section needs to be seen in context:

Chapter 93B as a whole is a "REGULATION OF BUSINESS PRACTICES BETWEEN MOTOR VEHICLE MANUFACTURERS, DISTRIBUTORS AND DEALERS"

And in Section 1, a dealer is defined as:



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In other words, operating a dealership would be a violation of the business practices between a manufacturer and a franchised dealer, however there isn't any franchised dealer in this business. And not even a business (the practices of which could be regulated).

In my naive understanding.

Yes, that was my reading as well after plowing through the website. It looks to me like the whole law is about regulating the relationship between franchisees and manufacturers. I didn't see anything that prohibited a manufacturer from setting up a dealership beyond the issue of competing with franchisees.

Can anyone reference something in the law that says otherwise?

[vfx]

...
(10) to own or operate, either directly or indirectly through any subsidiary, parent company or firm, a motor vehicle dealership located in the commonwealth of the same line make as any of the vehicles manufactured, assembled or distributed by the manufacturer or distributor."...

Not possible.

[stopcrazypp]

The judge threw out the injuction, but didn't just throw out the case. So as far as he is concerned there is at least a basis for the case. Like I wrote, I consider this a "soft" win.

The quote you cited does imply that the suit is probably going to fail.

Yeah, for our side.

I read through the whole decision and I agree more with derekt75. The judge seems to be saying the plaintiffs don't even have a standing to bring this suit at all (perhaps the state does). Plus the article says the plaintiffs are considering appeal (so they are clearly on the losing side right now).