WionDrive News Desk 
A federal appeals court has breathed new life into Tesla’s legal battle against Louisiana’s ban on direct vehicle sales. On Monday, the 5th US Circuit Court of Appeals in New Orleans issued a 2-1 decision reversing a lower court’s dismissal of Tesla’s constitutional and antitrust claims while upholding the dismissal of its equal protection claim.
The lawsuit, initially filed in August 2022, targets the Louisiana Motor Vehicle Commission, individual commissioners’ dealerships, and the Louisiana Automobile Dealers Association. Tesla alleges that these entities have used their regulatory power to undermine its business model, which bypasses traditional franchised dealerships in favor of direct sales to consumers.
Tesla argues that since 2017, Louisiana officials have unlawfully restricted its ability to sell, lease, and service vehicles in the state. The electric vehicle manufacturer claims this ban is a strategic move by local auto dealers, who are seeking to stifle competition.
In Monday’s ruling, Circuit Judge Jerry Smith noted that Tesla had presented a credible case of “plausible actual bias,” supported by emails from the commission’s executive director indicating that complaints from Tesla’s competitors would be prioritised. However, Circuit Judge Dana Douglas dissented, contending that Tesla’s challenge is an attempt to circumvent state law and legislative processes.
The court’s decision remands the case to US District Judge Sarah Vance, who had previously dismissed the suit in June 2023. The ruling is significant as it reopens Tesla’s path to potentially overturning Louisiana’s sales ban.
Judge Smith and Judge Catharina Haynes, who concurred with most aspects of the ruling, were appointed by Republican Presidents Ronald Reagan and George W. Bush, respectively. Judge Douglas, who dissented, was appointed by Democratic President Joe Biden.
Lawyers for both Tesla and the defendants have yet to provide comments on the ruling.
