Tesla steps up legal battle over direct sales in New Jersey

September 18, 2014
Tesla Motors has stepped up its legal battle over direct sales in New Jersey, detailing its argument in brief filed with the state Superior Court.

The company already filed an appeal after its retail licenses were blocked from renewal earlier this year, in an alleged backroom deal involving dealer lobbyists and Governor Chris Christie.

Attorneys argue that the state Motor Vehicle Commission was mistaken in its decision, as Tesla does not have any franchisees and is therefore naturally exempt from provisions of the franchise laws. The brief further claims the agency does not have any authority to enforce such regulations.

The legal team has also questioned the constitutionality of certain details outlined in the laws, such as the number of car models, servicing-department requirements and minimum square footage.

We believe the regulatory action was made in error,” Tesla’s VP of business development, Diarmuid O’Connell, told Automotive News in a statement. “We’ve prepared a legal action to deal with that, and I’m feeling pretty good about that.”

Several legislative proposals detail exemptions that would allow Tesla to resume direct sales. The company has received bipartisan support for its unique business model in New Jersey and other states, suggesting the bills are unlikely to face much opposition, but the court appeal serves as a potential backup plan.

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