Tesla Motors Inc (NASDAQ:TSLA) is suing the state of Michigan after it rejected the company’s business model.
Most automakers have dealerships spread throughout the country that conduct the their sales to consumers. Tesla is different from most carmakers as it sells vehicles directly to consumers through company-owned stores in other states.
However, Michigan has prevented the company from exercising its constitutional right to sell products in this manner, citing other business models as the standard which Tesla needs to follow in order to make sales in the Midwestern state.
The lawsuit named Michigan Gov. Rick Snyder, Secretary of State Ruth Johnson and Attorney General Bill Schuette. The move comes after Johnson rejected Tesla’s application for dealership and service facilities, asking for proof that the company is a franchised dealer.
“Tesla Motors brings this lawsuit to vindicate its rights under the United States Constitution to sell and service its critically-acclaimed, all-electric vehicles at Tesla owned facilities in the State of Michigan,” the automaker said in its complaint.
The way in which Tesla wishes to sell its products is similar to Apple Inc. (NASDAQ:AAPL) and its business model of selling its products in company-licensed stores.
The suit asks a judge to overturn Johnson’s rejection over the Due Process and Equal Protection Clauses of the Fourteenth Amendment to the U.S. Constitution and the Constitution’s Commerce Clause.
TSLA stock is up 0.5% Thursday.
