Judge Orders Lawmakers To Turn Over Records/Communications To Tesla In Michigan Direct Sale Case


Take that, protectionist politicians!

Bam! Biff! Pow! Tesla has won a battle in its long-running war with the state of Michigan.  The U.S. Magistrate Judge Ellen Carmody has ruled in the automaker’s favor, insisting that a pair of politicians comply with subpoenas served on them seeking copies of communications with lobbyists conspiring to keep the California-based company from conducting sales and service in the Wolverine State.

Sen. Joe Hune (left) with Michigan Governor Rick Snyder.

The conflict kicked off in earnest back in October 2014, when Governor Rick Snyder signed a bill into law forbidding direct sales by Tesla. After failing to find a way to wriggle around the law, including applying for its own dealership license, it launched a Federal lawsuit and demanded a jury trial. Since then, it’s been the politicians behind the legislation doing the wriggling.

Tesla sent a subpoena seeking communication records between Governor Snyder and Michigan Dealers Association, along with others. Notably, this action included correspondence involving Senator Joe Hune (R), who rewrote language in the bill to more narrowly target Tesla, and who’s wife, Marcia, by happenstance, works for “lobbying powerhouseGCSI, which (also, by happenstance) represents the Michigan Automobile Dealers Association (MADA).

Hune and Representative Jason Sheppard (R), apparently worried that having documents come to light might endanger their political careers cause harassment, raised opposition to the request and sought to have the subpoena quashed.

This most recent ruling, allowing the subpoena process to proceed, comes despite Michigan’s prohibition on such actions against legislators in civil cases, as the lawsuit is seen by the court as against the State, and not the individuals named therein.

As the legal battle grinds forward, Tesla continues to operate a single gallery in the state — inside a Nordstrom department store — and no service centers. According to its website, its first such center may be built to Detroit, though it is still optimistically listed as “Coming soon.”

Source: Detroit Free Press

Categories: Tesla

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27 Comments on "Judge Orders Lawmakers To Turn Over Records/Communications To Tesla In Michigan Direct Sale Case"

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GM is going to have more mud on its lousy lobbying mug! I hope Bolt buyers are aware of the GM culprit in this case.

I love how you’re so quick to equate a dealers association with GM. Biased much?

In the same vein, I blame every citizen of Michigan for the Tesla ban, since they pay the taxes that pay the salary of the people that wrote the Bill.

Sound crazy yet?

(⌐■_■) Trollnonymous

Read my comment below. The devil is in the details, and reading between the lines. Eas to do with an unbiased eye, hard to do when you want to find fault in a company at every chance possible.

By the way, for the record…
Do I own GM shares? No
Do I own Tesla shares? Yes

So who is biased now?

(⌐■_■) Trollnonymous

GM has an opportunity to get themselves out of the position they agreed upon that put them at this disadvantaged dealer franchise by not fighting Tesla’s sales model at all fronts like they’re doing now and step into the sales model Tesla is using.

They could say “hey, they sell their products that way, we want to also” and lobby to either ratify or abolish that old legacy law they agreed to.

But nope, they fight tooth and nail and they also fight against the EPA on emissions control so they can keep selling guzzlers…

All the money they spend fighting these fronts could’ve been better spent trying to get out of the legacy stealership sales model.

Their choice.

ClarksonCote said:

“So who is biased now?”

So… your argument is that you can’t possibly be biased in favor of GM because you own at least one share of Tesla stock.

Got it.

In other words: You are deliberately ignoring the clear and compelling evidence regarding GM actively supporting efforts by various State dealership associations to bribe lobby their State legislatures to pass laws, or to perversely reinterpret existing laws, to prevent Tesla from being able to compete with the dealerships represented by those State dealership associations.

Or, in short: Your mind is made up and you refuse to be confused by the facts.

No, you are connecting dots in illogical ways. I’m merely calling it as a see it, I have no bias against a given automaker and no bias for one. I complain about GM when I see fit and I complain about Tesla when I see fit.

I believe that, as well as my own financial positions, speak well to me not being in favor of GM while I try to talk to people who can’t get “conspiracy” out of their mind blaming GM for things that other organizations are doing, or failing to recognize how GM cannot kick their dealership network in the balls while they’re the only ones that can sell their product.

None of that matters. Listen, go start your own company, then be legislated into selling your product EXCLUSIVELY using franchised dealers, where all your profit and sales rely on them.

Then when another company tries to circumvent those rules (right or wrong) there’s no way you wouldn’t fight against it in some visible fashion to not isolate all those people who sell a product you make, that you cannot sell.

When you finally understand this is GM’s scenario, you realize I’m not at all being a fanboy. I’m just not nearly as biased against them as you are, which causes you to miss the full story as you jump to blame them on being a big bad wolf in the auto industry while you place your tinfoil hat firmly on your head.

ClarksonCote wrote:

“…be legislated into selling your product EXCLUSIVELY using franchised dealers, where all your profit and sales rely on them.”

You’re still ignoring the actual facts rather firmly.

It was the decision of the various American auto makers, GM and Ford and Chrysler and others, to set up their businesses using locally owned franchises to sell their cars. The various States later passed laws protecting dealerships, to protect them against predatory business practices by the auto makers against the dealers.

Your assertion that the various State laws created the system of auto dealerships… is simply wrong. This is not a matter of opinion; it’s established historical fact.

How else could they have sold their products back then? Everything went through middlemen.

You have read into what I stated in a way to try and make your counterpoint. I didn’t say they didn’t originally choose the dealership model, I said that eventually legislation mandated this of them.

Times change. Nice try to pivot though and try to emphasize I’m wrong by pointing out a statement that I wasn’t making. 😉

Maybe this could have something to do with the fact that the former vp of GM has voiced more opposition to tesla and more criticism than any other automaker. Actually more than all others combined. He still has dealing with GM. Gm is also the largest american automaker.

GM hates the dealers as much as everyone else. But they’re stuck with them and have to make the best of it. That makes it in GM’s best interest to try to saddle Tesla with useless dealers too.

I do hope the dealers and non-competitive states lose to Tesla. Maybe that will finally bring an end to the outdated dealer model.

At least you get it. Rather than claim GM is being all sorts of mean and unjust, you recognize the truth for what it is, as GM does.

I’d bet that, secretly, GM would love to not have a franchised model, it’s their weakest link in customer satisfaction.

But they’re stuck with it, and to not advocate against it is to tell the only people that can sell your product to go pound sand. Wonder how that would affect sales, when most of these franchises have other manufacturers they sell too?


“GM hates the dealers as much as everyone else.”

Since when?

I hope you don’t share ClarksonCote’s misconception that GM was forced to sell its cars through locally owned dealerships! That was GM’s decision, back in the day, and I don’t see any evidence that they’re ready to change. Not yet, anyway.

I think it’s inevitable that the obsolete dealership model will soon collapse, but I don’t think the legacy auto makers are yet ready to face that reality.

They did choose a dealer model 100+ years ago. That’s how things were sold back then. And the a bunch of laws were put in place to protect car dealers. Now the legacy car manufacturers are stuck with dealers.

It’s a tough position to be in since fighting for direct sales would alienate the only people who can currently sel their products.

We both agree that having middlemen in this millennium doesn’t make sense. But, it’ll take a while to get rid of them all.

Times change, PuPu. Back then, a dealer network made a lot of sense for them. Now they’re legislated against making any changes. The point still stands.

It shouldn’t be surprising that the business practices of 50 years ago are not the ideal practices for today, and vice versa.

Im very curious to see what comea out of this. Michigan politics are corrupt as they can be and everyone hides behind their political immunity.

This is fantastic news! Shining a light on the darkness is absolutely the best way to get rid of it. Hopefully this will cause Michigan to quickly reverse its stance and allow Tesla full access to the market, or (perhaps even better) this goes to trial and results in a ruling against such protectionist laws. The later would help not only in Michigan but other states as well. Go Tesla!


(⌐■_■) Trollnonymous

Corrupt politicians.

It’s stupid if they haven’t delete all the conversations already

(⌐■_■) Trollnonymous

You meant “wipe it with a cloth?”…

Actually, I don’t really understand this situation, I guess I’m naive. Ok, so there is a franchise system in place. The franchise is worried the manufacturer will go direct sales? But the manufacturer would have to build service centres and have stores, etc that they actually already have in the franchises. Everyone tells us that dealerships make most of their money on services, even this week when I bought a car the dealer told me they make virtually nothing on it, to quote “we make less on a car than some mobile phones make”, to me that sounds like a crock of s*** that a $1000 phone has more profit than a $15000 car. So franchises should be falling all over themselves to get the manufacturer to sell the cars direct and then they can just do all the profit adding services. Just doesn’t add up for me. There’s a lot invested in dealerships, the manufacturer would be crazy to just drop all that. Regardless of the sales model, people will still buy the brand they like, the price they like, the features they like. As had been already seen, people want a Tesla they just go out of state… Read more »
“Actually, I don’t really understand this situation, I guess I’m naive.” I don’t think you write as if you’re naive; I think you just write as if you don’t see the situation from the same viewpoint as the dealership. “Everyone tells us that dealerships make most of their money on services… So franchises should be falling all over themselves to get the manufacturer to sell the cars direct and then they can just do all the profit adding services. Just doesn’t add up for me.” Three points: (1) Successful businesses feel threatened by fundamental changes to their business plan. They know that their current business plan works. If it didn’t, then they wouldn’t be successful. But if they change their core business plan, there’s no guarantee they will continue to be successful. At best, it’s a gamble. Why gamble on change when what you’re doing is working? (2) Dealerships are set up as local monopolies. That is, if there is for example a Chevrolet dealership at X location, then GM won’t set up another dealership so close to the first one that it will steal a lot of its business. (Or at least, that’s the theory.) If the dealership stops… Read more »