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Tesla fires new legal salvo against New Jersey auto dealers

Tesla has launched a new offensive in the ongoing War of the Auto Dealers, claiming that New Jersey’s Motor Vehicle Commission (MVC) did not have the authority to stop the company from selling its electric cars at showrooms in the state.

Tesla sold cars directly to customers at two New Jersey showrooms for a couple of years, until the MVC adopted a new rule that put a stop to it, on the grounds that the state’s Franchise Practices Act requires manufacturers to sell cars through third-party dealers.

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In a brief filed last week as part of an ongoing lawsuit, Tesla said that the MVC is not authorized to enforce the Franchise Practices Act. “The MVC is a creature of statute, and its limited powers and duties are specifically set forth in its enabling laws,” the brief reads. “These powers and duties do not include enforcement of the FPA, which by its terms limits its enforcement to civil lawsuits filed by franchisees.”

Tesla cited a letter that MVC Commissioner Ray Martinez sent to the Coalition of Automotive Retailers (NJCAR) in March 2013. Martinez wrote that the MVC does not enforce the law “pertaining to the sale of motor vehicles by a franchisor and the ownership of a franchise by a franchisor,” and that “MVC has carefully reviewed Tesla Motors’ New Jersey motor vehicle license application and has consulted with the Division of Law, and has found no violations that could form the basis of license denial or revocation.”

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Naturally, the auto dealers’ group sees things differently. “Tesla may wish that the law is different than it is, but it’s not,” said NJCAR President Jim Appleton. “The law very clearly states that a manufacturer may not own or operate a retail facility in New Jersey. Tesla’s position has been consistent all along, I’ll give them that. They think the law doesn’t apply to them. Our position has been consistent all along. The law does apply to them. That’s what the men and women in black robes are for.”                           

Meanwhile, a bill (A3216) that would allow Tesla to operate four showrooms in New Jersey, similar to compromise bills enacted in New York and Pennsylvania, passed the state Assembly in June, but seems to be stalled in the Senate.


Source: NJ.com
Image: Joseph Thornton/Flickr

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