Judge dismisses dealers' lawsuit against Tesla's retail stores

Dealers trying to block Tesla Motors Inc.'s retail stores in Massachusetts lost another round this week when a judge dismissed their lawsuit against the electric vehicle maker.

In a ruling issued Monday, Norfolk County Superior Court Judge Kenneth Fishman said the Massachusetts State Automobile Dealers Association and other plaintiffs lacked standing to sue. It was the same reasoning the judge used in a November ruling denying a preliminary injunction against Tesla's suburban Boston store.

"We disagree with his decision," Robert O'Koniewski, the association's executive vice president, said Thursday. He contends the association has standing under changes made to the state's franchise law in 2002. "If you read the statute, it's pretty clear: a factory cannot own a store, and a dealer can sue for injunctive relief if they feel the public is being harmed."

Tesla, in a statement, said the ruling validated its retail strategy in Massachusetts and other states.

"We are confident that other states will also come to this same conclusion and look forward to following through on our commitment to introduce consumers to electric vehicle technology in an open, friendly, no-pressure environment," Elon Musk, Tesla co-founder and CEO, said in the statement.

Tesla's first Massachusetts showroom opened in September in the Natick Mall. The dealer association and the other plaintiffs -- two dealerships and a dealer -- sued in October, saying that Tesla's stores violate state licensing, consumer protection and franchise laws.

In December, Tesla won municipal approval of a dealer license for a second location in Natick.

O'Koniewski said the dealer association is considering its options, including whether to seek an appeal of the Dec. 31 dismissal. There is a 30-day time limit to file for an appeal, he said. The dealer association also has had discussions with the state attorney general, which has enforcement power over state franchise law.

Tesla said the Massachusetts State Automobile Dealers Association has also filed a separate lawsuit against the individual Selectmen that make up the Natick board.

Musk said Tesla plans to support the Natick board in the second suit.

"This subsequent lawsuit is a very unfortunate action taken by the Massachusetts State Automobile Dealers Association against a group of individual citizens who thoroughly reviewed our request for a Class 1 Dealer License and thoughtfully made a decision that was both legal and in the best interests of the citizens of Natick," Musk said.

Tesla says the second location in Natick is scheduled to open later this month.

By Amy Wilson- Automotive News