Atkins said in his ruling that relevant state laws consider vehicle sales other than franchise models.
Regarding Illinois’ auto franchise law, the judge said, “Clearly, a franchisee is not the only form of dealership we can think of.” “This is further supported by various provisions referring to dealers with ‘franchising or distribution agreements,’ and is clearly considering other types of arrangements.”
Atkins said the use of franchised dealers has become the primary sales model for new vehicles, but is not required under state law.
“The auto industry may have had an ‘established franchise system’ for decades, and Illinois law may have even been updated to reflect that reality and better regulate it. But that doesn’t mean there was a need for such a system,” the judge said. .
In another recent direct sales case, Tesla filed a lawsuit in August 2022 challenging Louisiana’s refusal to allow the company to sell cars directly to consumers, arguing the state’s move was protectionist. said it was anti-competitive, Reuters reported. Tesla has alleged that Louisiana authorities have violated state and federal antitrust laws by banning direct sales since 2017.
In Illinois, Tesla reached an agreement in 2019 with the state and dealer associations to allow dealers previously established by the automaker to continue operating, but limited to 13, according to the Atkins ruling. Did.
The agreement with Tesla implicitly acknowledged that direct sales were legal, the judge added.
“Plaintiffs’ IADA alleges that the manufacturer street It is not possible to be a dealer consistent with Illinois law and permitting such business is unfair and harmful to consumers, granting 13 dealer licenses to just such entities somewhat unconvincing in light of its own agreement to the order,” Atkins said in a footnote to his December ruling.
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