Friday, November 9, 2012

Protecting Auto Franchises Against Direct Sales by Auto Makers

NPR is reporting (see here) this morning on a lawsuit filed in New York against Tesla for selling its cars directly to customers in that state from its own showroom, rather than via franchisees (see here). Franchise laws originally were adopted to prevent auto makers from opening retail showrooms in direct competition with their own franchisees. This suit constitutes an effort to apply those laws against a car marker that has no franchisees either in New York or in any other state. At first blush, it seems to me that this application of a state's auto franchise law would violate the Dormant Commerce Clause for unreasonably burdening interstate commerce. But, then again, I'm not a Con Law scholar. Most importantly, I wish I could afford a Tesla.

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