Rivian Service Center Stalled By Dealership Lawsuit
We’ve seen this movie before.
In a replay of what we recently saw with Tesla, a lawsuit by an auto dealership has stalled the opening of a service center by a company that employs a direct sales business model. As reported in the GreenwichTime, the Town of Shelton approved a permit for Rivian to build a service center and this was appealed by Mario D’Addario Buick, Inc. As noted in the article, the complaint states that the facility will engage in the “sale of new and used Rivian vehicles in violation of Connecticut law.”
Tesla previously received a permit from East Hartford to open a badly needed second service center in Connecticut. Hoffman Auto promptly filed an action specifying a similar basis. East Hartford subsequently withdrew the permit and Tesla did not further pursue the matter. The company continues to scout for another suitable location.
Of course, both Rivian and Tesla know the law and don’t have plans to violate it. However, if the law were to be changed, and it has come before the legislature repeatedly (thus far unsuccessfully), their use of the facilities may change accordingly.
There is a difference between the Rivian and Tesla cases, which is that Rivian plans to use the proposed facility to deliver vehicles bought online. In Texas, another state that bans direct sales, Tesla has been able to deliver new vehicles at its service centers. They do not make deliveries in CT.
With a hat-tip to Philip K. Dick who coined the phrase, pre-crime refers to knowing someone is going to commit a crime they haven’t yet committed, and is in the realm of science-fiction where it belongs. In our version of reality, it amounts to dealerships using the franchise laws pretextually to make getting these vehicles serviced as inconvenient as it is to buy them. It is part of the dealerships’ continuing campaign to stifle competition and consumer choice.
During the April 18 virtual court hearing on Rivian’s motion to dismiss, Judge Matthew Freshette did not seem to be persuaded by the Buick dealer’s claim they have legal standing because they are aggrieved by Rivian obtaining zoning approval for its first Connecticut service center. The judge’s decision on the motion to dismiss is now pending.