Tesla wins round in fight against Michigan franchise law

Tesla wins round in fight against Michigan franchise law

Tesla won a battle in its fight against Michiganês franchise law that prohibits the automaker from using its direct sales model in the state. Relatedly, two state lawmakers will have to hand over records of their communications with lobbyists, including one with the Auto Dealers of Michigan (ADM).

The wife of Michigan state Sen. Joe Hune is a registered lobbyist for a firm that represents dealers. Tesla also subpoenaed state Rep. Jason Sheppard, who allegedly told Tesla last year that it will –not be allowed to operate in Michigan because Michigan dealers and manufacturers do not want Tesla in the state,” reported the Detroit News.

The material will be available only to the attorneys, ruled U.S. Magistrate Judge Ellen Carmody.

Attorneys for the lawmakers had attempted to invoke executive privilege for them, and said the subpoenas were an attempt to –harass legislators” who would not cave in to Teslaês demands for a change in the state franchise law. The ban on Teslaês direct sales model is based on a 2014 amendment to the franchise law.

State Attorney General Bill Schuetteês office has argued that Michigan is not discriminating against Tesla, as the automaker claims. –All other car manufacturers desiring to sell in Michigan operate under this same requirement,” his office wrote in a recent filing. –But Tesla wants special treatment and refuses to bend to Michiganês law; indeed, Tesla insists that Michigan should bend to Teslaês business plan and practices rather than Tesla altering its practices to comply with Michigan law.”

Kurt Berryman, a lobbyist for ADM, is also fighting a Tesla subpoena, saying it has –chilled” his right to free speech and association, according to the News.

Analysts have said that the results of the Michigan case could have repercussions for Teslaês push for direct sales in other states. Regionally, Tesla is allowed up to four stores in Maryland; in Virginia, it has a gallery in Tysons and a store in Richmond.

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