Tesla Case Generating Momentum in Michigan

Tesla Case Generating Momentum in Michigan

In 2016, Tesla filed a lawsuit against Michigan officials over a state law that prohibits the manufacturer to act as its own dealer and sell its electric car directly to consumers, instead requiring it to sell through traditional dealers. Last week, Tesla was energized by the judge’s decision over its subpoena over relevant communications.

As Ars Technica reported in 2016, Tesla’s legal position was that the state law violates “the Due Process, Equal Protection, and Commerce 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 believed that it has been discriminated against as an out-of-state company.

In Ars’ followup reporting last week, Tesla’s suit progressed when U.S. Magistrate Judge Ellen Carmody ordered that Michigan State Senator Joe Hune and State Representative Jason Sheppard comply with a subpoena related to the 2014 protectionist legislation. While Hune had introduced the legislation, Sheppard didn’t assume his legislative seat until 2015, well after the law had passed on Oct. 21, 2014. This is significant.

Initially, Hune and Sheppard claimed their communications were privileged because of their political positions. Ars called Judge Carmody’s response “not particularly sympathetic.” The judge did, however, pledge not to release communications or relevance disputes to the public.

Hune’s communications are of particular interest to Tesla because of his wife’s occupation: a registered lobbyist for a firm that represents the Michigan Automobile Dealers Association. So the subpoena calls for Hune’s communications dating 12 months before and six months after the law was passed.

During a June 2016 meeting before Michigan auto dealers and legistlators, Sheppard informed Tesla that they were unwanted in the state. Now, Sheppard must release relevant documents dated 2015 and 2016 because of the date he entered office.

Next, in addition to releasing communications, both parties must agree on relevant search terms.

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