DOJ Supports Tesla’s Argument in Louisiana Direct Sales Appeal

Key Points

  • 🏛️ The U.S. Department of Justice (DOJ) supported Tesla’s argument in a circuit court appeal regarding Louisiana’s direct auto sales ban.
  • ⚖️ Tesla had filed a lawsuit against Louisiana automotive dealer groups to overturn the ban on direct automotive sales without dealerships.
  • 🚗 DOJ echoed Tesla’s argument that the judge had misinterpreted antitrust law in the case dismissal, claiming it restricted the reach of antitrust law.
  • 🛡️ The DOJ clarified it didn’t take sides in the case but opposed the judge’s requirement for Tesla to prove that Louisiana dealer groups intended to suppress competition.
  • 📅 An argument date for the appeals court hasn’t been set, and this is one of several direct sales bans Tesla faces on the state level in the U.S.

The U.S. Department of Justice (DOJ) has backed an argument from Tesla this week during a circuit court appeal of a case with the state of Louisiana over its automotive direct sales ban rules.

Tesla launched a lawsuit against Louisiana automotive dealer groups in the state last year in an attempt to overturn a ban on direct automotive sales not using a dealership. U.S. District Judge Sarah Vance ruled against Tesla in June after the automaker had filed the suit against the Louisiana Automobile Dealers Association (LADA) and the Louisiana Motor Vehicle Commission (LMVC), along with board members and other dealers.

Tesla immediately appealed the decision, and on Thursday, a DOJ filing echoed an argument recently made by the automaker, saying that Judge Vance had misinterpreted antitrust law in the case dismissal, according to a report from Reuters. In the friend of the court filing, the DOJ mirrored a Tesla filing from last week, arguing that Vance wrongfully required the automaker to show the Louisiana dealer groups intended to suppress competition.

Lawyers for the Justice Department said in the filing that adding such a requirement would “improperly” restrict the reach of antitrust law. The DOJ went on to state that it does not support Tesla or the opponents in the case, adding that it doesn’t have an opinion on the appeal’s “proper disposition.”

Lousiana Motor Vehicle Commission attorneys did not respond to Reuters’ request for comment on the matter, nor did Tesla. The DOJ declined to comment.

https://youtu.be/FnmVYDAHiZo

In Vance’s ruling, she said the ban “applied to all vehicle manufacturers and that Tesla has alleged no facts regarding anti-Tesla animus on the part of the Louisiana Legislature.”

Tesla argued in its appeal that Louisiana car dealerships had previously “agreed with one another to harass Tesla with baseless investigations and drive it out of the state.”

An argument date for the appeals court has not yet been set, and this is just one of many direct sales bans Tesla faces on the state level in the U.S.

In Connecticut, Tesla partnered with Mohegan Sun, a casino operated by the Mohegan tribal nation, to bypass direct sales bans in the state and establish a showroom. Similar direct sales legislation has also been proposed in MississippiFlorida and elsewhere, which would force some residents to leave the state to purchase vehicles from or have vehicles serviced by Tesla and other automakers with online-purchase models.

Tesla settled in a similar case in Michigan in 2020, with the state agreeing that “any Michigan resident may lawfully buy a Tesla and have it serviced in Michigan.”

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