Judge sides with Tesla, slams dealer association in Missouri

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Enlarge Photo

Since Tesla began selling electric cars directly to customers throughout the U.S., the electric-vehicle maker has had to play franchise-law whack-a-mole in multiple state courts.

On Tuesday, Tesla scored a decisive victory when the Missouri Court of Appeals reversed a lower court’s ruling that would have left Tesla without a state dealer license.

In the court’s ruling, the judge criticized the tactics of the Missouri Auto Dealers Association, Tesla’s opponent.

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According to the St. Louis Post-Dispatch, the ruling allows Tesla to continue operating its University City and Kansas City stores in the state.

Chief Judge Mark Pfeiffer not only found in favor of Tesla, but made sure MADA knew why.

“Until such time as the Legislature expands its present judicial oversight restrictions relating to the Department’s licensing decisions, it is the forum of the political process — where the plaintiffs have historically shown political muscle — [in] which the content of the licensing arguments of this lawsuit against the Department must be evaluated,” Judge Pfeiffer wrote in the ruling.

However, MADA says it “will continue to explore the legal avenues available” to revoke franchise licenses of manufacturers.

Meanwhile, Tesla is predictably happy with the ruling.

“The decision today is a victory for Missouri consumers who want the choice to learn about and purchase their Tesla in their home state,” Tesla said in a statement.

READ MORE: Are Missouri electric-car charging stations like pay phones? Why that’s important

“We have been serving customers in Missouri for almost five years and have contributed to the state economy and jobs for Missourians—something that will now continue.”

The ruling is the latest in a three-year feud between Tesla and the dealer association, which represents over 300 new car and truck dealers in the state.

In May 2014, Missouri state legislators attempted to pass a law making Tesla’s sales model illegal by adding a last-minute amendment to a pending bill in the final days of a legislative session.

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Enlarge Photo

A key proponent of the measure, Sen. Mike Kehoe, previously owned a car dealership and had received “in-kind” campaign contributions of $3,300 from MADA the previous year.

In total, MADA spent roughly $49,000 on meals and entertainment for legislators in the state between 2011 and 2014, when the bill was drafted.

The bill was passed by the Senate without debate, but it didn’t pass the House. Tesla characterized the move at the time as a “sneak attack.”

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In absence of legislation, MADA sued the Missouri Department of Revenue in January 2015 for issuing a dealer license to Tesla.

The group argued Tesla’s license violated a state law that required manufacturers to sell vehicles through dealers holding valid franchise agreements.

While Tesla was not party to that case, the automaker asked a judge in February 2015 for permission to intervene in the proceedings, arguing the defendant didn’t represent Tesla’s interests.

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]

Enlarge Photo

The court made its decision in the case in August 2015, nearly a year and a half later, finding in favor of MADA that Tesla’s license to sell vehicles in the state should not be renewed.

Tesla appealed that ruling, and was granted approval to continue operating in the state while the next phase of legal arguments made their way through the courts.

The latest win for Tesla will likely free up resources as it fights legal battles in other states, especially Michigan, where Tesla is engaged in a prolonged slugfest with the state itself, not solely a dealer association.

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