Tesla has been fighting tooth and nail to sell their vehicles direct to consumers in the U.S. But six states - Arizona, Connecticut, Michigan, Texas, Utah, and West Virginia - have banned direct sales. Tesla is trying to change this with a combination of new legislation, applying for dealer licenses, and other items. However, Tesla is ready to take this issue to federal court with an interesting legal argument.
The Wall Street Journal reports that Tesla's legal staff has been looking into a 2013 federal appeals court ruling in New Orleans dealing with coffins. What?! The case dealt with the St. Joseph Abbey in Louisiana trying to sell monk-made coffins to help alleviate a shortage due to Hurricane Katrina. But the state had laws that restricted coffin sales to those who were licensed by the Louisiana Board of Funeral Directors. The court sided with the abbey saying they could sell the coffins without having a funeral directors license.
“It is widely accepted that laws that have a protectionist motivation or effect are not proper. Tesla is committed to not being foreclosed from operating in the states it desires to operate in, and all options are on the table,” said Todd Maron, Tesla’s chief counsel.
But could this argument work? Northwestern University law professor John McGinnis says it could. Using this case could shine a spotlight on how laws affect the sale of certain items such as cars.
“Until now, these decisions have been in niche areas of the economy. With Tesla behind it, it would go into something as economically important as the structure of the industry for retailing cars,” said McGinnis.
The timing is what intrigues us the most. Tomorrow night, Tesla will be revealing the Model 3 - their mass-market car. Reservations for this new model will also open.
Source: The Wall Street Journal (Subscription Required)