Can I Buy a Tesla in Massachusetts?

The Commonwealth’s highest court, the Massachusetts Supreme Judicial Court, recently answered that question in the affirmative. On September 15, 2014, the Court decided Massachusetts State Automobile Dealers Association, Inc. v. Tesla Motors MA, Inc., 469 Mass. 675 (2014), in favor of Tesla, an electric vehicle manufacturer with roots in Silicon Valley. In 2012, not long after Tesla began operations in Massachusetts, a statewide motor vehicle dealership organization and two dealerships brought a lawsuit against Tesla in the Norfolk Superior Court.

The plaintiffs alleged that Tesla’s vehicle showroom in the Natick Mall violated General Laws Chapter 93B, a law aimed at protecting vehicle dealerships from unfair practices by vehicle manufacturers. The plaintiffs argued that Tesla–a car manufacturer–was essentially operating its own dealership, an arrangement that the plaintiffs claimed was prohibited by Chapter 93B. Tesla argued that it was allowed to sell its vehicles directly through the company-owned store because it had no affiliations with the plaintiffs, or for that matter, any vehicle dealerships. The Supreme Judicial Court agreed with Tesla, concluding that the law protected vehicle dealers from unfair actions directed at them by their own brand manufacturers, but not an “unaffiliated entity” like Tesla. Since Tesla had employed an alternative model of reaching customers, not involving traditional dealerships, Chapter 93B did not apply. Consequently, the Court determined that the plaintiffs lacked a proper basis, or “standing” to bring the suit and affirmed the Superior Court’s dismissal.

The lawsuit against Tesla in Massachusetts was only one of many actions brought by dealerships and dealer associations across the country. While Tesla’s ability to conduct business in other states is still being determined, the Supreme Judicial Court’s decision gives would-be Tesla owners in Massachusetts the green light.

For more information about Fitch Law Partners LLP‘s business litigation practice, please click here.


Fitch Law Partners LLP reports news and insights on complex litigation topics. Clients, colleagues and friends may receive The Fitch Briefs by signing up here.