State legislatures are no longer Tesla's prime venue for overcoming legal barriers to direct sales. With Tesla’s September 2016 federal lawsuit filing against the state of Michigan, the real action has shifted to the courts. The petition can be read at
https://www.plainsite.org/dockets/31w235f2r/michigan-western-district-court/tesla-motors-inc-v-johnson-et-al/. This is a constitutional frontal attack on Michigan’s anti-Tesla statute. The grounds are violation of the Due Process, Equal Protection, and Commerce Clauses of the Constitution. This is an ideal test case because the anti-Tesla statute is blatantly anti-competitive and because it was passed through parliamentary legerdemain on the last day of a Michigan legislative session—before the opposition even knew an anti-Tesla amendment was being insinuated into existing state law.
The constitutional head-on challenge represents a very smart strategy. The theoretical details are laid out in an article by Daniel A. Crane,
Tesla, Dealer Franchise Laws, and the Politics of Crony Capitalism, 101 Iowa L. Rev. 573 (2016). This outstanding piece is available online at
http://repository.law.umich.edu/cgi/viewcontent.cgi?article=2720&context=articles. The author takes up all of the arguments made by the car dealers and calmly eviscerates each one in turn. This article is a pleasure to read, just to see how a methodical analyst guts and minces the flabby claims of the car dealer lobby.
The circumstances by which the anti-Tesla amendment was passed were highly suggestive of a pure attempt to deprive a competitor of access to the marketplace, and to exclude an out of state competitor from bringing its products across state lines into Michigan—in violation of the Commerce Clause.
In addition to the constitutional issues, there is a subliminal issue running through all of this. Everyone in the legal system—judges, lawyers, and clients—have experienced the “consumer protection” features of franchised car dealers when buying new cars and dealing with dealer service departments. Nobody believes that dealer franchise laws do anything other than protect the profits of incumbent auto dealers. By continuing to allow car dealers to arbitrarily exclude innovators like Tesla from the market, the federal courts would--to use a centuries-old phrase in law--"
be making an ass of the law." In other words, crazy rules don’t last forever in the courts.
I think the day is coming when the lawyer members of Tesla Motors Club will be able to submit thoughtful "friend of the court" briefs in support of Tesla’s case. I look forward to it.
Incidentally, there is no Texas pro-Tesla bill in the current session, at least according to
Texas Legislature Online, http://www.capitol.state.tx.us/Home.aspx. This really tells me that Tesla is putting its chips on the Michigan case.
(I'm going to paste this comment into other threads because people need to be aware of Tesla's strategy)