U.S. Department of Justice Supports Tesla in Direct Sales Ban Case Against Louisiana
The U.S. Department of Justice (DOJ) has sided with Tesla in a court appeal against the state of Louisiana over its ban on direct automotive sales. Last year, Tesla filed a lawsuit against Louisiana automotive dealer groups in an effort to overturn the ban, which prevented the automaker from selling vehicles directly to consumers without going through a dealership.
However, U.S. District Judge Sarah Vance ruled against Tesla in June, stating that the ban applied to all vehicle manufacturers and that Tesla had provided no evidence of anti-Tesla bias from the Louisiana Legislature. In response, Tesla immediately appealed the decision.
In a recent filing, the DOJ echoed Tesla’s argument and claimed that Judge Vance had misinterpreted antitrust law when dismissing the case. The DOJ argued that requiring Tesla to demonstrate that the Louisiana dealer groups intended to suppress competition would improperly limit the reach of antitrust law. The DOJ clarified that it neither supports Tesla nor the opponents in the case, and it does not have an opinion on the “proper disposition” of the appeal.
Notably, the attorneys representing the Louisiana Motor Vehicle Commission did not respond to requests for comment, and Tesla declined to comment on the matter. The DOJ also chose not to provide any further information.
It is worth mentioning that Tesla faces several similar direct sales bans on the state level across the U.S. In Connecticut, the company partnered with Mohegan Sun, a casino operated by the Mohegan tribal nation, to circumvent the ban and establish a showroom. Additionally, direct sales legislation has been proposed in states like Mississippi and Florida, which could require residents to travel outside their states if they wish to purchase or service vehicles from Tesla or other automakers with online-purchase models.
Tesla has previously reached a settlement in a similar case against Michigan in 2020. Under the agreement, any resident of Michigan can legally buy a Tesla and have it serviced within the state.
The appeal date for this specific case has not been set yet, but it represents another obstacle that Tesla must overcome in its ongoing battle against direct sales bans.
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