Dealers: Dropping Tesla suit 'is not an option'
Mass. retailers mull next move after losing bid to restrain factory store
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Massachusetts dealers plan to press on with a lawsuit against Tesla Motors, although a judge has denied a request for a preliminary injunction against the automaker.
As a result of the Nov. 9 ruling, the automaker can operate its store in suburban Boston as the dealers' lawsuit against the company proceeds.
The Massachusetts State Automobile Dealers Association and individual dealerships sued Tesla on Oct. 16, claiming the electric-vehicle maker has violated Massachusetts' licensing, consumer protection and franchise laws.
The dealers asked the Massachusetts Superior Court for a restraining order and injunction to stop the Tesla-owned store in Natick, Mass., which opened Sept. 28, from doing "anything other than an unstaffed display of a locked automobile."
To get an injunction in Massachusetts, as in federal court, plaintiffs must show they will suffer irreparable harm. Judge Kenneth Fishman did not consider whether the Natick store has harmed dealers because he concluded in his ruling that the plaintiffs were not entitled by Massachusetts law to ask for an injunction.
In an e-mail, Shanna Hendriks, a Tesla spokeswoman, said the court made the right decision. She stood by the company's strategy of owning and operating its own showrooms rather than granting franchises to dealers as other automakers do.
"Tesla looks forward to continuing to focus on advancing the knowledge of EVs in a convenient, accessible environment," she wrote. "We remain hopeful for a positive outcome of this case."
Robert O'Koniewski, executive vice president of the Massachusetts association, says the group is considering an appeal and other judicial remedies, but it hasn't made a decision on which path to take.
"Dropping the lawsuit is not an option at this point," he added. "We feel very strongly that Tesla is operating a factory store outside parameters of our franchise law and our license law, and they are operating that store illegally."
The National Automobile Dealers Association said it is reviewing the decision.
You can reach Gabe Nelson at gnelson@crain.com.
