The U.S. Justice Department is backing one of Tesla’s legal arguments in the electric carmaker’s lawsuit claiming that car dealers and others conspired to limit competition through Louisiana’s direct-to-consumer automobile sales ban, reports Reuters.
Tesla is suing the Louisiana Automobile Dealers Association, members of the Louisiana Motor Vehicle Commission and a group of dealers. The company, led by billionaire CEO Elon Musk, appealed the dismissal of its case in June.
The Justice Department on Thursday filed a friend of the court brief to the New Orleans-based 5th U.S. Circuit Court of Appeals, arguing that the trial court judge in Tesla’s case misinterpreted antitrust law in her ruling dismissing the case.
The government’s filing, mirroring one from Tesla last week, said U.S. District Judge Sarah Vance wrongly held that the carmaker was required to show that members of Louisiana’s motor vehicle commission had intent to curb market competition.
The government said in its filing it was not supporting Tesla or its opponents and had no view on the “proper disposition” of the appeal.
The Justice Department and lawyers for Tesla said U.S. civil antitrust law does not require a showing of intent. Adding that requirement would “improperly” restrict antitrust law, Justice Department lawyers told the appeals court.
Tesla is one of only a few car companies that sells directly to consumers and does not sell or service vehicles through independent franchises.
In her ruling against Tesla, Vance said the state’s direct-sales ban “applied to all vehicle manufacturers and that Tesla has alleged no facts regarding anti-Tesla animus on the part of the Louisiana Legislature.”
Tesla countered in the appeal that Louisiana car dealers had “agreed with one another to harass Tesla with baseless investigations and drive it out of the state.”
The appeals court hasn’t yet set an argument date.
Under a 2020 settlement with Tesla resolving similar claims, the state of Michigan agreed that “any Michigan resident may lawfully buy a Tesla and have it serviced in Michigan.”
The case is Tesla v. Louisiana Automobile Dealers Association et al, 5th U.S. Circuit Court of Appeals, No. 23-30480.
