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Another Victory Against Challenges to OEM Direct Sales

Another Victory Against Challenges to OEM Direct Sales


In an interesting twist to the prior challenges brought by Tesla Motors to state motor vehicle franchise law prohibitions or limitations on retail sales by a manufacturer, a Tesla vehicle owner brought a suit in South Carolina challenging the State’s prohibition on direct sales to consumers. The plaintiff argued that the prohibition violated various United States and State Constitutional rights.

The lawsuit was primarily defended by the South Carolina Attorney General’s office with assistance from BSM partner, Shawn Mercer. BSM was retained by the South Carolina Automobile Dealers Association to represent its interests in the case.

The trial court granted the State’s motion to dismiss the Tesla owner’s complaint finding that he did not have standing to bring the lawsuit as he had suffered no harm under the State’s direct sales prohibition as he was able to purchase a Tesla vehicle and operate it in the State with no difficulty.

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