Tesla’s ongoing legal battle challenging Louisiana’s direct-sales ban has garnered support from the U.S. Justice Department. The dispute roots back to a 2017 Louisiana law prohibiting direct vehicle sales to consumers, requiring them instead to purchase vehicles through dealers or other franchises.
According to Reuters, the law posed a significant hurdle for Tesla, known for its direct-to-consumer sales model.
The lawsuit saw a setback in June when a federal judge dismissed Tesla’s claims, asserting that Louisiana’s law applied uniformly to all vehicle manufacturers and dismissed allegations of anti-Tesla sentiment among Louisiana’s lawmakers.
However, on October 20, 2023, the U.S. Justice Department weighed in on the matter, backing one of Tesla’s legal arguments.
This intervention came as Tesla appealed the dismissal of its case. The Justice Department filed a friend of the court brief to the New Orleans-based 5th U.S. Circuit Court of Appeals, arguing against the trial court judge’s antitrust law interpretation.
The filing mirrored a recent one from Tesla, both contending that U.S. District Judge Sarah Vance erroneously required Tesla to show intent to curb market competition on the part of Louisiana’s motor vehicle commission members.
The Justice Department clarified that its stance wasn’t in support of either party but aimed to correct the misinterpretation of antitrust law. According to them and Tesla’s lawyers, U.S. civil antitrust law doesn’t necessitate a showing of intent, and adding such a requirement would “improperly” restrict antitrust law.
This case holds wider implications as it resonates with a broader movement within the automotive industry towards direct sales models, bypassing traditional dealership networks.
Tesla’s legal skirmish in Louisiana reflects a broader clash between evolving business models and established regulatory frameworks, with the outcome likely to impact the regulatory landscape for direct-to-consumer vehicle sales not only in Louisiana but potentially across other U.S. states.
The appeal’s argument date at the 5th U.S. Circuit Court of Appeals remains unset, prolonging the uncertainty surrounding Tesla’s ability to sell vehicles directly to consumers in Louisiana.