Tesla wins fight over auto dealers’ communications in Michigan – we might get to see some secrets

As part of its current legal battle over the right to sell its electric cars directly to customers in the state of Michigan, Tesla is trying to subpoena communications between automakers, auto dealers, and legislators over the law that banned direct sales from automakers.

They have been trying to get the communications from three specific auto dealers and today, a judge denied an appeal from those dealerships, which should force them to turn over their communications to Tesla’s legal team.

We might get to see some secrets…

A change to the law in 2014 prohibits direct sales from automakers, which is blocking Tesla from obtaining a dealership license and selling cars in the state.

Last year, Tesla filed a lawsuit against the state after claiming that the ban on direct sales violates commerce laws and that it was pushed by car dealers and GM in an attempt to block the electric automaker at the last hour.

Already a year in, the legal battle is expected to take a while and right now it revolves mostly around what information Tesla gets to use to prove its point.

As part of the discovery process earlier this year, Tesla filed to have two lawmakers turn over any communication with car dealers and automaker lobbyists about the ban.

One of the lawmakers, Sen. Joe Hune, R-Gregory, is the senator who introduced the last-minute amendment that created the ban in 2014 and his wife, Marcia Hune, is a lobbyist for car dealerships.

The other, Rep. Jason Sheppard, R-Lambertville, is being subpoenaed because Tesla claimed that he confirmed to one of their representatives that the reason behind the ban is that “Michigan auto dealers and manufacturers don’t want Tesla in Michigan”.

The two lawmakers fought against the disclosure of their communications – claiming that there would be a backlash, but U.S. Magistrate Judge Ellen Carmody denied their bids in August. The communications haven’t been released to the public and are for lawyers’ eyes only for now.

Now Tesla also wanted the communications from Ann Arbor Automotive, Serra Automotive and Shaheen Chevrolet with the state’s dealers association (MADA) and legislators.

The dealers appealed to the request claiming that it would chill them from interacting with lawmakers and regulators in the future.

Yesterday, the court rejected the appeal in an order obtained by Electrek and embedded below. A case of the disclosure of a Ku Klux Klan membership list is cited as an example on several occasions in the court’s order.

More interestingly, the document continued by stating that dealers can’t claim a bystander status in Tesla’s lawsuit against the state – going as far as stating that they were the ones who drafted the law:

“But particularly unique to this case is the evidence that despite their status as nonparties, the Dealers’ are not merely ‘bystanders’ in this case, given evidence that the automotive dealers themselves drafted the anti-Tesla law in response to “the Tesla situation”. Accordingly, the communications sought in discovery are directly and highly relevant to Tesla’s claims.”

The case is far from over, but it’s getting increasingly interesting.

Here’s the court order:

[scribd id=367003651 key=key-6pqpchv8tDUrjJXugnlh mode=scroll]

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Avatar for Fred Lambert Fred Lambert

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