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“We feel it’s a violation of the law,” MADA’s president and CEO, Doug Smith, said in a conference call with reporters last week, describing Tesla’s business model. “The law ... clearly states that a manufacturer cannot sell vehicles to consumers.”
A franchisor shall be prohibited from owning or operating a new motor vehicle dealership in this state
(10) "Franchisor", a person who grants a franchise to another person;
A motor vehicle dealer shall not assign ownership on any vehicle in a retail sale by the assignment of a manufacturer's statement of origin unless he is enfranchised by the manufacturer to sell that particular make of vehicle
Would love some guidance from Tesla or just about anyone on how we can help here.
Had to look up the fancy lawyer words... Amicus curiae - Wikipedia, the free encyclopediaI'm not sure about Missouri courts but courts tend to be inclined to accept government agencies interpretation of the law over other parties. So this may not go very far.
If it gets to that point (and Missouri law allows it) I'd imagine an amicus curiae filing to the court would be helpful. However, I'd imagine that Tesla would do that themselves.
Beyond that I think getting the existing law made clearer as to Tesla's ability to sell vehicles might be helpful. My suggestion is to change the word "enfranchised" in 301.568 to "authorized" or at least something that removes a franchise requirement to use a statement of origin. The intent seems to be to prevent a used dealer from buying a new car and then starting to sell them as new. I don't know why that's important but I know that sort of thing is included in many state laws on automobile sales. Though you might not want to try and do that until Tesla loses their license on that basis.
Seems like MADA is executing a different tactic since modifying the law directly hasn't been successful for them.
Missouri car dealers sue state over Teslas direct sales - SFGate
Auto dealers sue Missouri over Tesla car sales : Business
The second link is a better write up but unfortunately has a terribly survey in order to see the story, my appologies for that.
Looking at Missouri law I'd say it's not particularly clear on this front.
The restriction they appear to be referencing is in Section 407.826 of Missouri Revised Statues.
Which says (in part):
Franchisor is defined in Section 407.815 as follows:
Since Tesla has not granted a franchise to anyone else they do not meet the definition.
All that said there may be a tiny part of Missouri law that may be problematic for Tesla. Section 301.568 says that new vehicles can't be sold except by a franchised dealer for that make. Granted the section's entire purpose is to talk about something else but it's there. It seems that this is a poorly worded section that doesn't reflect the overall intent of the law but it is arguable.
Telsa is most certainly a motor vehicle dealer under the law and is most certainly assigning ownership by way of a manufacturer's statement of origin. So Tesla may find themselves in a Catch 22 with the law. They may need to operate a franchised dealer in order to transfer ownership with a statement of origin. But they may not do so if they are the manufacturer.
There may be some clever way around this if they do all the sales like they do in states like Texas. But I'm not sure how that would work.
So while I don't think the state law is clear cut, I sadly do think the dealers have something to potentially argue in court.
Looks like there is more "Trouble in Missouri"