Further Reading Dealers attack Tesla, seek to remove electric car maker from Georgia

Massachusetts’ highest court has dismissed a lawsuit filed by the Massachusetts State Automobile Dealers’ Association against Tesla Motors. The ruling paves the way for direct-to-consumer Tesla sales in the Bay State.

The Supreme Judicial Court decision, which was handed down on Monday and upheld a lower court’s ruling, found that existing car dealers lacked standing. The plaintiffs had claimed that Tesla was in violation of state law that prevents a car manufacturer from also owning a car dealership—so because Tesla could sell directly, it had an unfair advantage. But that law was intended to protect dealerships from abuse by their own brand manufacturers and distributors, not unrelated manufacturers.

"Contrary to the plaintiff’s assertion, however, the type of competitive injury they describe between unaffiliated entities is not within the statute’s area of concern," Justice Margot Botsford wrote in the unanimous decision.

At the initial time of the lawsuit, Tesla was not selling any cars in Massachusetts, but the company had set up a display at Natick Mall—which, according to the lawsuit, didn’t generate any sales anyway. Tesla later applied for and was granted a proper sales office in the town just west of Boston.

For now, Tesla is forbidden by state law from selling direct to consumers in Texas, Arizona, and Maryland. And earlier this month, a group of Georgia car dealers attempted to block Tesla’s ability to sell in that state, too. Tesla is also currently barred from selling in New Jersey, but pending legislation that has already passed that state’s lower legislative house would allow such sales to resume.

In April 2014, the Federal Trade Commission argued in a blog post that the company should be allowed to sell without any such bureaucratic roadblocks.