Carvana claims being 'singled out' in latest state licensing dispute

Carvana Co. launched a petition asking for support from consumers in Michigan after the company's license to operate in the state was suspended last week.

In an email sent out Wednesday, the online used-vehicle retailer asked consumers to sign the petition "to support keeping Carvana and online, hassle-free car buying available without interruption in Michigan."

Michigan's Department of State said last Friday that it was suspending Carvana's license for a multitude of alleged violations of the Michigan Vehicle Code, including repeated infractions pertaining to titles, registrations and odometers. Those were discovered during an investigation of several no-title complaints from consumers, the state said.

"We believe Carvana is being singled out in order to protect antiquated paperwork and legal requirements that we don't feel are in the best interest of customers," Carvana said in the email.

Carvana shares slipped 1 percent to close at $18.87 on Thursday after recovering from early drops of about 8 percent.

The company issued a similar request to Illinois consumers in late July following a period of continued scrutiny from Illinois regulators.

The Michigan petition "currently has thousands of signatures and is growing by the hour," a Carvana spokeswoman said in an emailed statement.

The number of Illinois petition signees was more than 6,000 in the first few days after it was released, but later grew to roughly 13,000, the email said.

Carvana is likely to mount a legal challenge to the Michigan Department of State's suspension of its license. The company chose to take that route in Illinois in July, after the Illinois secretary of state reinstated an earlier suspension of its license.

Carvana filed for a temporary restraining order against the agency, which was later granted by a judge in Illinois' DuPage County.

In response to the Michigan action, Carvana said in a statement:

"We continue to oppose the state’s heavy-handed and abrupt effort to shut down a growing Michigan business with tens of thousands of customers over what amounts to technical, paperwork violations involving title and transfer issues. We have already corrected 99 percent of the technical paperwork violations cited in the state’s report and welcome the opportunity to address the state’s ongoing concerns through constructive dialogue, changes to outdated regulations through legislation, or in the courts."