FREE ELECTRONIC LIBRARY - Dissertations, online materials

Pages:   || 2 | 3 | 4 |


-- [ Page 1 ] --

Case 1:16-cv-01158-JTN-ESC ECF No. 1 filed 09/22/16 PageID.1 Page 1 of 24




TESLA MOTORS, INC., a Delaware §

corporation §






Plaintiff §

§ v.


RUTH JOHNSON, in her official capacity as § § Secretary of State and Chief Motor Vehicle § Administrator, BILL SCHUETTE, in his § official capacity as Attorney General, and


RICK SNYDER, in his official capacity as § Governor § § Defendants.

§ § § § § § § § § §


Tesla Motors, Inc. (“Tesla”) brings this lawsuit to vindicate its rights under the United States Constitution to sell and service its critically-acclaimed, all-electric vehicles at Tesla- owned facilities in the State of Michigan. Tesla seeks, on an expedited basis, a declaratory judgment that Michigan Compiled Laws section 445.1574 (“Section 445.1574”), including its recent “Anti-Tesla” amendment, violates the Due Process, Equal Protection, and Commerce Case 1:16-cv-01158-JTN-ESC ECF No. 1 filed 09/22/16 PageID.2 Page 2 of 24 Clauses of the Constitution as applied to Tesla by prohibiting Tesla from selling its vehicles directly to consumers and by precluding Tesla from performing service and repairs within the State. Tesla also seeks a permanent injunction preventing State officials from enforcing Section

445.1574 against Tesla.


1. Tesla is an American company whose mission is to accelerate the advent of sustainable transport and energy. Among other things, Tesla designs, manufactures, and sells the world’s most advanced zero-emissions, all-electric vehicles. And, while many other companies have moved manufacturing jobs overseas, Tesla designs, builds, and sells cars here in the United States, employing thousands in well-paying jobs.

2. Tesla has catalyzed the electric vehicle industry worldwide. Founded in 2003, Tesla has delivered more than 140,000 cars to date, proving to the market that electric cars can be as desirable as they are environmentally sound, and can eventually replace the gasolinepowered cars that have rolled off of factory lines for more than 100 years. Tesla’s vehicles have been met with resounding acclaim, with Tesla’s Model S receiving Car and Driver’s prestigious “Car of the Century” award and the National Highway Traffic Safety Administration’s highest possible safety ratings. Similarly, a 2015 Consumer Reports survey ranked Tesla’s service centers first in the United States for on-time repairs, courtesy, price, quality, and overall satisfaction. Building on these successes, in March 2016, Tesla unveiled the Model 3, a more affordable, mass-market, electric vehicle set to begin production in late 2017. On May 18, 2016, Tesla publicly reported that customers had paid to reserve approximately 373,000 Model 3 cars.

3. From its inception, Tesla determined that it could not succeed by selling and servicing its vehicles through a traditional network of third-party dealers, and the high-pressure, commissions-driven sales environment they foster. Because Tesla is new to the industry, and

–  –  –

because all-electric vehicles are new to most customers, Tesla’s sales model has focused on educating consumers about its products and technology in a low-key, low-pressure environment.

For example, unlike traditional car dealerships, Tesla sells its cars at uniform and transparent prices based on the configuration and options that a customer selects for the vehicle. Thus, at Tesla, customers will never be rushed into a purchase, haggle over the price of the car, wonder if they could get a better deal across town, or puzzle over confusing add-on products, like GAP insurance or rust-proofing. Tesla’s results, measured by sales and Tesla’s superlative survey rankings, show that this model has immense benefits for consumers.

4. While customers have welcomed Tesla with open arms, groups of industry incumbents, including some dealer associations across the country, have viewed Tesla as a threat to their local monopoly power over automobile distribution. Rather than try to compete with Tesla, some of these well-connected players have tried to block Tesla from local markets altogether by lobbying state legislatures for protectionist legislation.

5. Particularly egregious protectionist legislation was passed by the Michigan Legislature in 2014. Under pressure from the deeply entrenched automobile dealer’s lobby, the Michigan Legislature quietly enacted an outright ban on Tesla’s direct-to-consumer sales model, effectively giving franchised dealers a state-sponsored monopoly on car sales within Michigan.

The Legislature did so by amending a statute that prohibited a franchising manufacturer from competing against “its” independent, franchised dealers—which Tesla does not use—to require, for the first time in Michigan’s history, that all new car sales be conducted exclusively through franchised dealers. This new ban made its way through the Legislature covertly, with the Legislature bypassing the public notice-and-comment process to shield the bill from scrutiny or debate. Then, at the urging of the franchised dealers and General Motors (which considers Tesla

–  –  –

a competitive threat to its own electric vehicle programs), the bill was signed into law by Governor Rick Snyder and was codified in revised Michigan Compiled Laws Section 445.1574.

The new law was immediately recognized by the public for what it was: a highly protectionist, dealer-driven law intended to shut Tesla out of Michigan. It was aptly dubbed the “Anti-Tesla bill.”

6. By design, amended Section 445.1574 effectively bans Tesla’s sales and distribution model within the State of Michigan. In particular, Section 445.1574 prohibits motor vehicle manufacturers from selling their vehicles through manufacturer-owned facilities within the State, instead requiring all manufacturers to contract with independent, franchised dealers to sell their cars. As the vehicle dealer lobby was well aware, Section 445.1574 effectively precludes Tesla from selling its cars within the State of Michigan because the dealer model is not viable for Tesla.

7. Furthermore, Section 445.1574 even bars Tesla from establishing in-state facilities to service and repair Tesla vehicles purchased by Michigan residents in another state or over the Internet. Thus, when applied to Tesla, Section 445.1574 impedes and complicates Tesla owners’ ability to obtain needed repairs. The only conceivable reason to burden Michigan residents in this manner, in blatant disregard for public safety, is to reward the dealers’ generous lobbying efforts by handing them a monopoly.

8. Section 445.1574’s prohibitions violate Tesla’s rights under the U.S. Constitution.

As applied to Tesla, Section 445.1574 blocks Tesla from pursuing legitimate business activities and subjects it to arbitrary and unreasonable regulation in violation of the Due Process Clause of the Fourteenth Amendment; subjects Tesla to arbitrary and unreasonable classifications in violation of the Equal Protection Clause of the Fourteenth Amendment; and discriminates against

–  –  –

interstate commerce and restricts the free flow of goods between states in violation of the dormant Commerce Clause. The sole purpose for applying Section 445.1574 to a nonfranchising manufacturer like Tesla is to insulate Michigan’s entrenched automobile dealers and manufacturers from competition. This is not a legitimate government interest under the U.S.


9. Section 445.1574 serves no interests other than those of two discrete private groups—Michigan’s independent franchised dealers and Michigan-based vehicle manufacturers—to the great expense and detriment of Tesla and Michigan consumers alike.

Michigan supports those special interests by requiring vehicle manufacturers to create a costly and unnecessary Michigan-only franchised-dealer network simply to participate in the Michigan market. Tesla asks the Court to eliminate this Michigan-sanctioned trade zone; permit Tesla to provide necessary maintenance and repair services to Michigan’s Tesla owners; and restore Tesla’s right to compete fairly for the business of Michigan consumers, an outcome that will reduce prices, create jobs, and allow Michigan consumers—not Michigan car dealers or legislators—to choose which vehicles and distribution model they prefer.

–  –  –

10. Tesla brings this lawsuit pursuant to the Civil Rights Act of 1871, 42 U.S.C.

§ 1983, and alleges violations of the Fourteenth Amendment to, and the Commerce Clause of, the U.S. Constitution.

11. Tesla seeks declaratory and injunctive relief against the enforcement of Section

445.1574 against Tesla, and against the practices and policies of the Secretary of State that deprive Tesla of its right to sell and service Tesla vehicles at Tesla-owned facilities within the State.

12. This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1367, 1343, and 2201.

–  –  –

14. Tesla is an American company that designs, develops, and manufactures electric vehicles and provides service and support to owners of its vehicles. Electric vehicles currently comprise less than 1% of new car sales in the United States, and Tesla’s mission is, among other things, to accelerate the world’s transition to electric mobility by bringing to market a full fleet of increasingly affordable electric vehicles.

–  –  –

15. Defendant Ruth Johnson is the Secretary of State and is sued in her official capacity. Defendant Johnson is, and at all relevant times was, an employee of the State of Michigan. As Secretary of State, Defendant Johnson also serves, and at all relevant times served, as the Chief Motor Vehicle Administrator.

16. Defendant Bill Schuette is the Attorney General of the State of Michigan and is sued in his official capacity. Defendant Schuette is, and at all relevant times was, an employee of the State of Michigan with authority to enforce Michigan law.

17. Defendant Rick Snyder is the Governor of the State of Michigan and is sued in his official capacity. Defendant Snyder is, and at all relevant times was, an employee of the State of Michigan vested by the Michigan Constitution with the executive power of the State, including the power to supervise each of the principal departments of the executive branch of the State government.

18. Defendants Johnson, Schuette, and Snyder (collectively “Defendants”), and their agents and employees performed, participated in, aided, and/or abetted in the acts described below under color of law and directly and/or proximately caused the injuries described below.

–  –  –

19. Tesla began bringing vehicles to market just five years after its founding. Its first offering was the Tesla Roadster, released in 2008, which was the first commercially-produced, highway-capable, all-electric vehicle made in the United States. The Roadster was a highperformance sports car with a battery range of 245 miles, the longest range of any production vehicle up until that time.

20. Building on the Roadster’s success, in 2012, Tesla introduced the Model S, a fullsized, all-electric luxury sedan with a range of 265 miles per charge.1 The market’s response was overwhelming. In 2013, Model S was named Motor Trend Car of the Year2 and was recognized by Consumer Reports for “the highest owner-satisfaction score Consumer Reports has seen in years: 99 out of 100.”3 A 2014 Consumer Reports survey found that “98 percent of Model S owners [said] they would definitely purchase it again.”4 In 2015, Car and Driver named Model S the “Car of the Century,”5 an award given in the prior century to the Ford Model T. In addition, Model S consistently receives a five-star safety rating (the highest possible) in each testing category from the National Highway Traffic Safety Administration.6 By 2015, 1 The most recent variant of Model S (P100D) has a range of 315 miles per charge.

2 2013 Motor Trend Car of the Year: Tesla Model S (November 12, 2012), http://www.motortrend.com/news/2013motor-trend-car-of-the-year-tesla-model-s/.

3 Tesla Model S Takes the Top Spot in Consumer Reports Car Owner-Satisfaction Ratings (November 21, 2013), http://pressroom.consumerreports.org/pressroom/2013/11/my-entry-2.html.

4 Would You Buy Your Car Again? Consumer Reports’ annual car owner satisfaction survey (December 2014), http://www.consumerreports.org/cro/2012/12/owner-satisfaction/index.htm.

5 2015 Tesla Model S 70D, The car of the century, now updated with more power and AWD (May 2015), http://www.caranddriver.com/reviews/2015-tesla-model-s-70d-instrumented-test-review).

6 http://www.safercar.gov/Vehicle+Shoppers/5-Star+Safety+Ratings/2011-Newer+Vehicles/SearchResults?searchtype=manufacturer&manufacturer=151.

–  –  –

Model S was the best-selling plug-in electric vehicle in both the United States and worldwide,7 and was the best-selling large luxury vehicle of any kind in the United States.8

21. In September 2015, Tesla began delivery of its third vehicle, the Model X, a luxury sport utility vehicle. And in March 2016, Tesla began accepting reservations for its fourth vehicle, the Model 3, a lower-cost sedan set to enter production in late 2017. Demand for the Model 3 has been unprecedented, with more than 325,000 reservations placed (with a deposit of $1,000 each) within a week after Model 3 reservations were opened, implying approximately $14 billion in future sales and making Model 3’s launch the largest one-week product launch ever—all without advertisements, paid endorsements, or guerilla marketing campaigns. By May 15, 2016, Tesla had logged approximately 373,000 Model 3 reservations.

–  –  –

Pages:   || 2 | 3 | 4 |

Similar works:

«Negotiating Brexit Briefing paper Robyn Munro July 2016 Negotiating Brexit 2 Our Brexit work programme Following the UK’s vote to leave the European Union (EU), the Institute for Government has launched a major programme of work looking at the negotiations, the UK’s future relationship with the EU and the impact of Brexit on the UK as a Union. Visit www.instituteforgovernment.org.uk/brexit to keep up to date with our Brexit blogs and briefs, read our media and broadcast coverage, and find...»

«Plenary: Pretrial Motions: Stuff  to Know to Get the  Discovery You Need Pretrial Motions: Stuff to Know to Get the Things You Need John B. McEntire IV, Trial Attorney Federal Defenders of Eastern Washington & Idaho Rule 17 Subpoenas What: An unbelievably useful way to get potentially exculpatory information if you can show 1) relevance, 2) admissibility, and 3) specificity. U.S. v. Nixon, 418 U.S. 683, 700 (1974) Leading Case United States v. Tucker, 249 F.R.D. 58, 62 (S.D.N.Y 2008)...»

«THE 'SONS OF GOD' EPISODE IN GENESIS 6:1-4 AND SOUTH AFRICA TODAY by NEIL T OOSTHUIZEN submitted in part fulfilment of the requirements for the degree of MASTER OF THEOLOGY 1ll OLD TESTAMENT at the UNIVERSITY OF SOUTH AFRICA SUPERVISOR: PROF P JV AN DYK November 1998 THE 'SONS OF GOD' EPISODE IN GENESIS 6:1-4 AND SOUTH AFRICA TODAY by Neil T. Oosthuizen submitted in part fulfilment of the requirements for the degree of MASTER OF THEOLOGY in OLD TESTAMENT atthe UNIVERSITY OF SOUTH AFRICA...»

«YubiKey Static Password Function White Paper November 11, 2015 By Dain Nilsson YubiKey Static Password Function © 2015 Yubico. All rights reserved. Page 1 of 9 Copyright © 2015 Yubico Inc. All rights reserved. Trademarks Yubico and YubiKey are trademarks of Yubico Inc. All other trademarks are the property of their respective owners. Disclaimer The contents of this document are subject to revision without notice due to continued progress in methodology, design, and manufacturing. Yubico shall...»

«Arch Nemesis By Nelson Pass Introduction A poster of Einstein once said, “Things should be made a simple as possible, but no simpler”. This can apply to audio amplifiers, but if they are evaluated subjectively, the simplicity thing can get a little of of hand. Of itself, minimalism exerts a strong aesthetic attraction, and there is a reasonable belief that fewer components in the signal path allows more information to get through with less coloration. If like me you are interested in...»

«Publish detail Java Spring Framework Interview Questions Answers books document, also Download PDF Java Spring Framework Interview Questions Answers digital file JAVA SPRING FRAMEWORK INTERVIEW QUESTIONS ANSWERS PDF Enjoy ways of help published is really a hard copy manual thats printed java spring framework interview questions answers PDF nicely bound, and functional. It operates as a reference manual skim the TOC or index, get the page, and stick to the directions detail by detail. The...»

«life Application ® Bible Commentary PHILIPPIANS, COLOSSIANS & PHILEMON Bruce B. Barton, D.Min. Mark Fackler, Ph.D. Linda Chaffee Taylor David R. Veerman, M.Div. TYNDALE HOUSE PUBLISHERS, INC. CAROL STREAM, GENERAL EDITOR: Grant Osborne, Ph.D. ILLINOIS SERIES EDITOR: Philip W. Comfort, D. Litt. et Phil. Visit Tyndale’s exciting Web site at www.tyndale.com Life Application Bible Commentary: Philippians, Colossians & Philemon Copyright © 1995 by The Livingstone Corporation. All rights...»

«2005 NORTH CENTRAL NATIVE VEGETATION PLAN © North Central Catchment Management Authority 2005 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the North Central Catchment Management Authority. Requests and enquiries concerning reproduction and rights should be addressed to Community Engagement, North Central Catchment Management Authority, PO Box 18, Huntly Vic 3551. Telephone:...»

«MEETING OF APRIL 21, 1992 (Meeting convened at 10 a.m. and adjourned at 12:10 p.m.) INVOCATION The Reverend Rodney Quainton, All Saints Episcopal Church, Fort Lauderdale, gave the invocation. PLEDGE OF ALLEGIANCE led by Kathy Harris, Assistant to the County Administrator.CALL TO ORDER CONSENT AGENDA AVIATION DEPARTMENT A. MOTION TO APPROVE Memorandum of Agreement between the Federal Aviation Administration (FAA) and Broward County Aviation Department in the amount of $22,078 to reimburse FAA...»

«Coker, R. (2001). Distinguishing science and pseudoscience. Retrieved March 5, 2005, from http://www.quackwatch.org/01QuackeryRelatedTopics/pseudo.html Distinguishing Science and Pseudoscience Rory Coker, Ph.D. The word pseudo means fake. The surest way to spot a fake is to know as much as possible about the real thing in this case, about science itself. Knowing science does not mean simply knowing scientific facts (such as the distance from earth to sun, the age of the earth, the distinction...»

«Lupus and the Skin A Patient’s Guide to Skin Involvement in Lupus © LUPUSUK 2015 LUPUS and the Skin LUPUS UK acknowledges with gratitude the assistance of Sue Brown, Consultant Nurse in Rheumatology (Connective Tissue Diseases), Royal National Hospital for Rheumatic Diseases NHS Foundation Trust, Bath and Dr Chris Lovell, Consultant Dermatologist, Royal United Hospital and Royal National Hospital for Rheumatic Diseases NHS Foundation Trust, Bath in the provision of clinical information...»

«Distribution Agreement In presenting this thesis or dissertation as a partial fulfillment of the requirements for an advanced degree from Emory University, I hereby grant to Emory University and its agents the non-exclusive license to archive, make accessible, and display my thesis or dissertation in whole or in part in all forms of media, now or hereafter known, including display on the world wide web. I understand that I may select some access restrictions as part of the online submission of...»

<<  HOME   |    CONTACTS
2016 www.dissertation.xlibx.info - Dissertations, online materials

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.