Tesla‘s legal battle against a Louisiana law prohibiting direct-to-consumer car sales has taken a significant step forward. The 5th U.S. Circuit Court of Appeals has overturned a lower court ruling that dismissed Tesla’s claim of constitutional due process violations.
The case is part of a broader effort by Tesla and other auto manufacturers to challenge laws that restrict direct sales. By bypassing traditional dealerships, manufacturers aim to control the sales process and potentially offer lower prices to consumers.
The appeals court ruled that Tesla had presented a plausible claim that the Louisiana Motor Vehicle Commission, which regulates car sales in the state, was biased against the company. The commission is dominated by licensed third-party dealers who stand to benefit from the current system.
The court’s decision sends the case back to the federal district court in New Orleans for further proceedings. This ruling marks a victory for Tesla in its ongoing efforts to expand its direct-to-consumer sales model.
(With Agency Inputs)
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