Missouri Dealerships Fight Back Against Tesla, By Suing State
Last May, Missouri auto dealers attempted to sneak in a late addition to a bill (HB 1124) that would have seen Tesla’s direct sales model banned in the state – a move that did not allow public comment, and didn’t provide Tesla with any time to work up a defense. That is, other than to post a last minute blog post highlighting the fact it was indeed heading to the House floor for a vote.
Turns out that some high profile attention on the proceedings, and some rational thinking, saw “state legislators scrapping a vote on a bill” (Tesla’s words), with the issue to be reintroduced in 2015 with full hearings in the state Senate and House.
Apparently, the Missouri Automobile Dealers Association were upset that due process would be seen in the state (irony), and have now filed suit saying that the state’s Department of Revenue (and it’s director – Nia Ray) have violated state law by currently allowing Tesla to sell direct.
Specific to the lawsuit, MADA wants the Missouri Department of Revenue to not renew Tesla’s license for its University City boutique store and to further ban any other dealer licenses for the company in the state.
“For many years, new motor vehicles have been sold in Missouri using a tried-and-true structure: manufacturers do not sell cars themselves, but do so through a network of licensed dealers. This structure of separate roles for manufacturers and dealers is established by statute and reflects wise public policy.” – lawsuit statement via Automotive News
According to the motion, MADA states that Missouri law says automakers can only sell cars through dealers, and by issuing Tesla a permit to operate in the state, the Department of Revenue “violated both the law and the structure that’s been in place for many years,” according to MADA attorney, Lowell Pearson – who also was the former deputy director of the department of revenue.
“Missouri requires any state agency to change policy through formal rule making process,” Mr. Pearson added, “the department didn’t do any of that here. It created a new public policy for the state by issuing a license to Tesla.”
Unsurprisingly, Tesla’s vice president of corporate and business development Diarmuid O’Connell has a different take.
“Missouri law is very straightforward in that it prohibits manufacturers that use independent franchisees from competing directly against them. This has nothing to do with Tesla, which has never used independent franchisees.”
Automotive News, hat tip to kdawg!