Tesla has settled a lawsuit challenging Louisiana’s ban on direct-to-consumer vehicle sales, ending a multi-year legal dispute that pitted the electric carmaker against state regulators, dealership groups, and auto industry officials.
In a motion filed Monday in federal court in New Orleans, Tesla and the defendants stated the matter had been “fully and finally resolved.” The settlement concludes a case that began in August 2022, when Tesla sued members of the Louisiana Motor Vehicle Commission, several dealerships, and the Louisiana Automobile Dealers Association.
Tesla alleged that officials with ties to competing dealerships used their positions on the commission to obstruct its direct sales model, describing it as an “existential threat” to the traditional franchised dealership system. The suit also challenged restrictions on leasing and servicing Tesla vehicles in the state.
State officials defended their actions as lawful enforcement of existing policy. According to the court filing, they maintained that they were “simply doing their jobs and did not violate criminal laws.”
While details of the settlement were not disclosed, the legal backdrop has been contentious. In August 2024, the U.S. Court of Appeals for the Fifth Circuit revived Tesla’s constitutional due process claim and overturned a lower court’s dismissal of its antitrust allegations, citing concerns of potential bias.
In June, the U.S. Supreme Court declined to review an appeal from 18 state motor vehicle commissioners, allowing the appellate ruling to stand.
The case, Tesla Inc et al v. Louisiana Automobile Dealers Association et al, was heard in the U.S. District Court for the Eastern District of Louisiana, case number 22-02982.
