Three attorneys from in Harris Beach Murtha’s Automotive and Vehicle Dealerships Industry Team have again tackled the subject of electric vehicle manufacturers attempting to bypassing dealerships and sell directly to consumers in a column for the Massachusetts State Auto Dealers Association.
The latest column discusses at attempt by Lucid Group USA to sell directly to consumers in Georgia. Lucid is a California-based luxury electric vehicle manufacturer.
Attorneys Thomas S. Vangel, Lindsey M. McComber and James F. Radke previously covered an attempt by Scout Motors to sell directly to Colorado consumers. In that column for the same publication, they mentioned these types of attempts were taking place across the nation and they’d continue to report on them.
In their latest column on Lucid, the three attorneys noted the Georgia Supreme Court reversed and vacated a trial court’s dismissal of Lucid’s claim that a Georgia law banning direct sales to consumers violated due process and equal protection clauses in the Georgia Consititution, among other things.
Lucid had submitted an application for a dealership license to the Georgia Department of Revenue. The Department of Revenue denied the application based on the state’s Direct Sales Prohibition.
“The law requires manufacturers to sell their new motor vehicles through a new motor vehicle dealer, and it generally prohibits manufacturers and their affiliated entities from owning or operating a new motor vehicle dealer,” the attorneys wrote. “These sections together encompass what is known as the “Direct Sales Prohibition” and prevent new motor vehicle manufacturers and their affiliates from selling their vehicles directly to consumers in Georgia.”
Lucid sued, saying the Direct Sales Prohibition violates several provisions of the Georgia Constitution, including the Due Process Clause and the Equal Protection Clause, as well as two other provisions. The trial court dismissed the lawsuit, holding the state’s constitution authorized the state to regulate members of the new motor vehicle industry.
On appeal, the Georgia Supreme Court held the trial court improperly dismissed Lucid’s case, finding, among other things, the language of the constitution allowed the General Assembly to regulate the new motor vehicle industry only when acting to prevent fraud and unfair business practices upon its citizens.
“Although this decision may seem like a win for Lucid, it does not legalize direct sales in Georgia, and Lucid will still have to prove that Georgia’s direct sales ban under the Motor Vehicle Franchise Practices Act does not prevent “frauds, unfair business practices, unfair methods of competition, impositions, and other abuses upon its citizens,” the attorneys wrote.
Read the complete column.
