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Massachusetts State Automobile Dealers Association, Inc. v. Tesla Motors MA, Inc.

Supreme Judicial Court of Massachusetts, Norfolk

September 15, 2014

Massachusetts State Automobile Dealers Association, Inc ., & others [1]
v.
Tesla Motors MA, Inc., & another. [2]

Argued May 6, 2014

Civil action commenced in the Superior Court Department on October 16, 2012.

A motion to dismiss was heard by Kenneth J. Fishman, J.

The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

Thomas S. Vangel ( James F. Radke with him) for Massachusetts State Automobile Dealers Association, Inc., & others.

Richard P. Campbell for the defendants.

John E. Kwoka, Jr., Pro se, amicus curiae, submitted a brief.

Present: Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ.

OPINION

Page 676

Botsford, J.

In Beard Motors, Inc . v. Toyota Motor Distribs., Inc., 395 Mass. 428, 480 N.E.2d 303 (1985) ( Beard Motors ), this court held that a Massachusetts motor vehicle dealer did not have standing to maintain an action for an alleged violation of G. L. c. 93B, § 12A, against a motor vehicle distributor with which it was not affiliated. In the case before us, the principal question is whether amendments to the statute in 2002 broadened the scope of standing under c. 93B, such that Massachusetts motor vehicle dealers now have standing to maintain an action for an alleged violation of the statute against unaffiliated motor vehicle manufacturers or distributors. We hold that the 2002 amendments did not have this effect. Chapter 93B is aimed primarily at protecting motor vehicle dealers from injury caused by the unfair business practices of manufacturers and distributors with which they are associated, generally in a franchise relationship. We therefore affirm the judgment of the Superior Court dismissing the plaintiffs' action on the basis of lack of standing.

Procedural background .

The plaintiff Massachusetts State Automobile Dealers Association, Inc. (MSADA), is a Statewide organization that represents the interests of new automobile and truck franchised dealerships in Massachusetts; two of the other plaintiffs, Connolly Buick Co., Inc., doing business as Herb Connolly Chevrolet, and Jake Kaplan's Inc., doing business as Fisker Norwood, are Massachusetts motor vehicle dealers. The plaintiffs commenced this action against Tesla Motors, Inc., an automobile manufacturer, and its Massachusetts subsidiary, Tesla Motors MA, Inc., alleging that the defendants were operating " an automobile dealership showroom in the Natick Mall without a license and in violation of law which prohibits a manufacturer from owning a dealership." [3] The plaintiffs claimed that the defendants were in violation of G. L. c. 93B, § § 3 ( a )[4] and 4 ( c ) (10),[5] and were engaged in a civil conspiracy " to evade Massachusetts law and to

Page 677

operate an automobile dealership without the required licenses." They sought declaratory relief, a temporary restraining order, and preliminary and permanent injunctive relief that would, among other things, prevent the defendants from owning directly or indirectly any Tesla brand dealership in Massachusetts.

The defendants moved to dismiss the complaint both for lack of standing and for failure to state a claim on which relief could be granted. See Mass. R. Civ. P. 12 (b) (1) and (6), 365 Mass. 754 (1974). They argued, among other things, that the plaintiffs lacked standing to claim a violation of G. L. c. 93B and conspiracy to violate c. 93B because they were not " affiliated dealers" of Tesla or Tesla MA. After a hearing, a judge in the Superior Court denied the plaintiffs' request for a temporary restraining order and preliminary injunction, ruling that the plaintiffs lacked standing to maintain the action. He subsequently denied the plaintiffs' motion for reconsideration and dismissed the complaint for lack of standing.[6],[7] The plaintiffs appeal.

Facts .[8]

Tesla is a manufacturer of electric motor vehicles. It was incorporated in Delaware in 2003. Tesla Motors MA is its wholly-owned subsidiary, incorporated in Massachusetts in 2012 " to lease and operate stores, galleries and service centers for the sale and service of Tesla vehicles in Massachusetts and to provide the public with information about electric vehicle ownership." Neither of the defendants is ...


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