Tesla’s legal battle against a Louisiana law preventing direct sales to consumers has been reignited by an appeals court. The electric vehicle company, led by Elon Musk, is challenging state laws that restrict manufacturers from selling their vehicles directly. This push includes legal challenges and the strategic opening of showrooms on Native American tribal lands not bound by state regulations.
The 5th U.S. Circuit Court of Appeals, in a 2-1 decision, overturned a previous ruling that had dismissed Tesla’s claim of being deprived of due process. The court found merit in Tesla’s argument that the Louisiana Motor Vehicle Commission, overseeing car sales in the state, showed bias against the company due to its ties with licensed third-party dealers.
Judge Jerry Smith, backed by Judge Catharina Haynes, emphasized in the majority opinion that the Commission’s dominance by traditional dealers could lead to exclusion of innovative business models like Tesla, affecting fair market entry. The case has been remanded to the federal district court in New Orleans for further proceedings.
While Tesla’s stance gained traction with the appeals court, dissenting Judge Dana Douglas contended that regulatory boards, even if comprised of industry competitors, may not be deemed unconstitutional per the Supreme Court’s guidelines. This legal development could have implications beyond Louisiana, impacting similar battles in other states as Tesla seeks avenues for direct consumer sales.
