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Tesla Wins Dismissal of Massachusetts Car Dealers’ Suit

Tesla Motors Inc., the maker of Model S electric cars, won the dismissal of a lawsuit brought by Massachusetts auto dealers seeking to stop it from operating its own showrooms in the state.

A Norfolk Superior Court judge ruled against the Massachusetts State Automobile Dealers Association, finding that a state law didn’t necessarily give dealers standing to pursue legal claims over manufacturer-owned stores.

“This court is unconvinced that the 2002 amendment to Chapter 93B expanded the purpose of the statute to protect the motor vehicle franchise system,” Judge Kenneth J. Fishman said in a Dec. 31 decision, referring to provisions Massachusetts law regarding trades.

Tesla, based in Palo Alto, California, opened a showroom in Massachusetts’ Natick Mall, according to the lawsuit filed by the car dealers association in October. The dealers alleged the company’s “novel distribution chain for their vehicles” skirted legal requirements.

“We are delighted by the outright dismissal of this case and the validation that we are operating our business in compliance with the laws and expectations of the Commonwealth of Massachusetts,” Elon Musk, Tesla’s co-founder and chief executive officer, said in a statement. “We are confident that other states will also come to this same conclusion.”

Robert O’Koniewski, executive vice president of the Massachusetts dealers association, said the organization is considering an appeal.

“It’s just another bump in the road we have to address,” he said.

The Massachusetts case is Massachusetts State Automobile Dealers Association Inc. et al v. Tesla Motors MA Inc. and Tesla Motors Inc., NOCV2012-1691, Massachusetts Superior Court, Norfolk County.

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