Tesla wins license; dealers fight on
 | Musk: “Much appreciated!” |
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When Tesla Motors Inc. won a dealer license in suburban Boston last week, it was the second blow for Massachusetts dealers who call the electric vehicle maker's retail stores illegal.
After months of opposition from local dealers and the Massachusetts State Automobile Dealers Association, municipal officials in Natick, Mass., approved Tesla's Class 1 dealer license on Dec. 10. That followed a court's Nov. 9 denial of a preliminary injunction against Tesla's showroom in the Natick Mall.
The dealer association and some dealers sought that injunction when they sued Tesla in October. They argue that Tesla's stores violate state licensing, consumer protection and franchise laws. Massachusetts law bans factory ownership of dealerships, the dealer group says.
In denying the request for an injunction, Norfolk County Superior Court Judge Kenneth Fishman said the association and the other plaintiffs -- two dealerships and a dealer -- lacked standing to seek such relief. The judge is weighing two motions in the case: Tesla's motion to dismiss and the plaintiff's motion to reconsider the Nov. 9 ruling.
Arguments on the motion to dismiss were held Nov. 27. The judge's ruling that the plaintiffs lack standing for relief could make dismissal more likely.
The association contends that it and the other plaintiffs do have legal standing based on changes to the state's franchise law made in 2002. The Nov. 9 ruling was based on pre-2002 case law, said Robert O'Koniewski, the association's executive vice president.
If the judge "sticks to his guns, the next step would be appellate court," O'Koniewski said.
O'Koniewski also said the group would explore all options in battling the dealer license issued last week. One option is an appeal to the state Registry of Motor Vehicles, he said.
In the meantime, Tesla says the license approval will allow it to soon take purchase reservations and offer test drives at a new location on West Central Street in Natick. That store will open "as soon as possible," a Tesla spokeswoman said. Tesla will continue to operate its Natick Mall showroom, which opened in September.
Tesla CEO Elon Musk tweeted about the license approval last week: "Much appreciated!"
You can reach Amy Wilson at awilson@crain.com.
