The trade group had accused Tesla of operating a showroom in Natick, Massachusetts without a license and in violation of a law prohibiting a manufacturer from owning a dealership.
“We’re disappointed,” Robert O’Koniewski, a spokesman for the group, said of the ruling. He said the group would review what steps to take with state legislators to address “the standing gap.”
Todd Maron, deputy general counsel at Tesla, welcomed Monday’s decision.
“It’s a great decision,” Maron said. “The statute is very similar to statutes in other states. We have battles in New Jersey and other states with similar constructs, and we hope and expect the same interpretation would carry over to those venues.”
In March, New Jersey’s Motor Vehicle Commission effectively revoked Tesla’s license to operate two stores. The General Assembly in June passed legislation that would, if enacted into law, allow sales to resume.
Tesla also cannot conduct direct sales in Arizona, Maryland and Texas, the company said.
Last week, Nevada let Tesla make direct car sales to residents, as part of an arrangement to provide $1.3 billion of tax breaks for the company to build a giant battery factory.
In an unusual blog posting in April, three top U.S. Federal Trade Commission officials expressed opposition to laws banning direct sales, saying they could harm consumers. The case is Massachusetts State Automobile Dealers Association Inc et al v. Tesla Motors MA Inc, Massachusetts Supreme Judicial Court, No. SJC-11545.
(Reporting by Jonathan Stempel in New York; Additional reporting by Bernie Woodall in Detroit; Editing by Jonathan Oatis and Grant McCool)
Article Appeared @http://www.reuters.com/article/2014/09/15/us-tesla-motors-massachusetts-lawsuit-idUSKBN0HA29620140915