Economy

Top Massachusetts Court Says Tesla Can Sell Directly to Customers

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Tesla scored a significant victory in Massachusetts on Monday.

According to Reuters, The Bay State’s highest court tossed out a lawsuit seeking to prohibit the Palo Alto, California-based company from selling cars directly to consumers. The electric car company can now bypass traditional dealerships in the state.

As noted in the report, the state’s Supreme Judicial Court unanimously found that the Massachusetts State Automobile Dealers Association and two dealers didn’t have standing to ban the sales under a law created to protect franchise owners from abuses by manufacturers. Justice Margot Botsford reportedly wrote the law “was intended and understood only to prohibit manufacturer-owned dealerships when, unlike Tesla, the manufacturer already had an affiliated dealer or dealers in Massachusetts.”

“Contrary to the plaintiffs’ assertion,” she explained, “the type of competitive injury they describe between unaffiliated entities is not within the statute’s area of concern.”

Of course, the trade group isn’t pleased with this ruling.

“We’re disappointed,” spokesman Robert O’Koniewski told Reuters.

But Tesla is obviously thrilled about it.

“It’s a great decision,” Todd Maron, deputy general counsel at Tesla, told Reuters. “The statute is very similar to statutes in other states. We have battles in New Jersey and other states with similar constructs, and we hope and expect the same interpretation would carry over to those venues.”

According to the report, Tesla says it is currently banned from making direct sales in Arizona, Maryland and Texas. You may also recall its problems in New Jersey.

What do you think? Will this decision improve the automotive market in Massachusetts? Will Tesla win in other states?

Photo credit: Flickr/oskay