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Meyer v. McMaster

United States District Court, D. South Carolina, Columbia Division

June 6, 2019

Austin Meyer, Plaintiff,
v.
Henry McMaster, in his official capacity as Governor; and Alan Wilson, in his official capacity as Attorney General, Defendants.

          ORDER AND OPINION

         This matter is before the court for review of Defendants Henry McMaster, the Governor of South Carolina, and Alan Wilson's, the Attorney General of South Carolina, (collectively, “Defendants”), Motion to Dismiss Complaint filed on March 28, 2019. (ECF No. 15.) Plaintiff Austin Meyer (“Meyer”) responded in opposition to Defendants' Motion on April 11, 2019. (ECF No. 16.) On May 30, 2019, the court heard arguments from the parties regarding Defendants' Motion. (ECF No. 23.) For the reasons stated herein, the court GRANTS Defendants' Motion to Dismiss (ECF No. 15) and DISMISSES WITHOUT PREJUDICE Meyer's Complaint (ECF No. 1).

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Tesla, Inc. (“Tesla”) is an American company that builds “all-electric vehicles” and creates “scalable clean energy generation and storage products.” About Tesla, Tesla, https://www.tesla.com/about (last visited May 26, 2019).[1] Tesla produces all of its vehicles in Fremont, California, including the Model S, Model X, Model 3, and Tesla Semi. Id. The Model S is “the world's first ever premium all-electric sedan, ” while the Model X is a “sport utility vehicle.” Id. The Model 3 is “a low-priced, high-volume electric vehicle, ” and the Tesla Semi is described, by Tesla, as being “the safest, most comfortable truck ever.” Id. Tesla seeks to “accelerate the world's transition to sustainable energy” and “believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better.” Id.

         According to Meyer, Tesla engages in a “unique direct sales-and-service model[, ]” which allows Tesla to “market[] and sell[] its vehicles directly to consumers over the Internet (at www.tesla.com) and through a worldwide network of stores owned and operated by Tesla.” (ECF No. 1 at 8 ¶ 22.) Purportedly, “Tesla does not sell its vehicles through independent, franchised dealers, i.e., third-party dealers who sell vehicles pursuant to franchise agreements with manufacturers.” (Id.) Because Tesla “is nothing like the traditional car-buying process, ” Tesla “sells its cars at uniform and transparent list prices, which depend on the configurations of and options for each car.”[2] (Id. at 9-10 ¶ 24.) Thus, when buying an electric vehicle, “customers pay the same price whether they purchase through Tesla's website, at a local store, or at a store in a different state.” (Id.) Apparently, “Tesla has determined that its direct sales model is the only viable means for selling its cars.” (Id. at 12 ¶ 32.)

         Meyer filed his Complaint on January 22, 2019, and “is the owner of two Tesla automobiles.” (ECF No. 1 at 5.) Meyer brings his Complaint pursuant to 42 U.S.C. § 1983 and alleges violations of the Due Process Clause of the Fourteenth Amendment, Equal Protection Clause of the Fourteenth Amendment, and the Dormant Commerce Clause of Article I of the United States Constitution. (Id. at 1 ¶ 10, 16 ¶ 44, 17 ¶ 48, 18 ¶ 52.) Meyer seeks declaratory and injunctive relief from S.C. Code Ann. § 56-15-45 (West 2019).[3] (Id. at 19-20.) Generally, SC Code Ann. § 56-15-45(A) (West 2019) makes it:

unlawful for a manufacturer or franchisor or any parent, affiliate, wholly or partially owned subsidiary, officer, or representative of a manufacturer or franchisor to own, operate, or control or to participate in the ownership, operation, or control of a new motor vehicle dealer in [South Carolina], to establish in [South Carolina] an additional dealer or dealership in which that person or entity has an interest, or to own, operate, or control, directly or indirectly, an interest in a dealer or dealership in [South Carolina], excluding a passive interest in a publicly traded corporation held for investment purposes.

         However, the statute explicitly “does not prohibit the ownership, operation, or control of a new motor vehicle dealer by a manufacturer or franchisor” in three limited situations. See S.C. Code Ann. §§ 56-15-45(A)(1) to (3) (West 2019). Additionally, the statute provides that:

It is unlawful for a manufacturer or franchisor or any parent, affiliate, wholly or partially owned subsidiary, officer, or representative of a manufacturer or franchisor to own a facility that engages primarily in the repair of motor vehicles, except motors homes, if the repairs are performed pursuant to the terms of a franchise or other agreement or the repairs are performed as part of a manufacturer's or franchisor's warranty.

         S.C. Code Ann. § 56-15-45(C) (West 2019). Despite the enactment of the aforementioned statutory provisions in 2000, [4] Meyer suggests that, together, they comprise “the Anti-Tesla bill” because they “create[] a monopoly in favor of franchised dealers and benefits them by blocking Tesla from operating within [South Carolina].” (ECF No. 1 at 10-11 ¶ 29.) Meyer alleges that these provisions are “protectionist legislation” and “act[] as an outright ban on Tesla's direct-to-consumer sales model, effectively giving franchised dealers a state-sponsored monopoly on car sales within South Carolina.” (Id. at 3 ¶ 5.) Put concisely, Meyer submits that the laws of South Carolina “ban[]

         Tesla's sales and distribution model . . . .” (Id. at 3 ¶ 5.) For these reasons, Meyer maintains that S.C. Code § 56-15-45 is unconstitutional, and he and Tesla are harmed by Defendants' enforcement of the statute. (Id. at 15-16 ¶¶ 40-42.)

         Within his Complaint, Meyer makes a number of notable statements and assertions. (Id. at 5-19 ¶¶ 14-57.) For example, Meyer begins a sentence as follows: “Tesla asks the [c]ourt . . . .” (Id. at 5 ¶ 9.) Notwithstanding the absence of Tesla to the present action, Meyer later declares that his “mission is to both improve his access to Tesla dealerships and maintenance facilities and to accelerate the world's transition to electric mobility by bringing to market a full fleet of increasingly affordable electric vehicles.” (Id. at 5-6 ¶ 14.) He vigorously contends “[t]here is no reason to bar Tesla from establishing facilities in the [s]tate to service and repair South Carolina resident[s'] Tesla vehicles, nor to subject South Carolina's Tesla owners to substantial inconvenience-and require them to overcome senseless hurdles-simply to obtain needed repairs and service.” (Id. at 14 ¶ 37.) In numerous sections of his Complaint, Meyer alleges that “[he] and Tesla are injured irreparably by the past, present, and future violations of the Due Process, Equal Protection, and Commerce Clauses of the [United States] Constitution.” (Id. at 16 ¶ 42.) In seeking relief for each respective claim, the Complaint states “[Meyer] and Tesla will continue to suffer great and irreparable harm.” (Id. at 17 ¶ 46, 18 ¶ 50, 19 ¶ 57.) Essentially, Meyer desires state officials to cease the enforcement of S.C. Code § 56-15-45 “against Tesla and other similar auto manufacturers.” (Id. at 1.)

         On March 28, 2019, Defendants filed their Motion to Dismiss to Meyer's Complaint. (ECF No. 15.) Defendants argue the following in their Motion to Dismiss: (1) Meyer lacks constitutional standing to challenge S.C. Code § 56-15-45 under Article III of the United States Constitution; (2) S.C. Code § 56-15-45 is constitutional under the United States Constitution; and (3) the Governor of South Carolina lacks responsibility to enforce S.C. Code § 56-15-45. (ECF No. 15-1 at 5-10.) First, as it specifically relates to constitutional standing, Defendants assert that Meyer “fails to allege any more than generalized grievances about South Carolina law, ” and his “allegations are merely about matters of convenience, and inconvenience does not establish standing.” (Id. at 7.) In other words, according to Defendants, Meyer has not alleged a “harm sufficient to establish standing” and cannot bring a suit on behalf of a third-party.[5] (Id. at 8.) Secondly, Defendants submit that South Carolina's statute is constitutional because other courts have determined that similar statutes did not violate provisions of the United States Constitution. (Id. at 8-10 (citing Ford Motor Co. v. Tex. Dep't of Transp., 264 F.3d 493 (5th Cir. 2001); Tesla Motors UT, Inc. v. Utah Tax Comm'n, 398 P.3d 55 (Utah 2017)).) Lastly, Defendants maintain that “the Governor does not have supervisory authority over every state agency, and [Meyer] does not name or specify an agency as to which the Governor would have authority regarding this matter.” (Id. at 10.) For these reasons, Defendants request the dismissal of Meyer's Complaint (ECF No. 1). (Id.)

         On April 11, 2019, Meyer responded in opposition to Defendants' Motion. (ECF No. 16.) Concerning Article III standing, Meyer argues that he has suffered an injury because “[h]e had to shop for, test drive, and pick up each of the vehicles from Charlotte, North Carolina[, ]” and “has had to take his vehicles or have his vehicles towed to North Carolina every time they have needed service.” (Id. at 3.) Put differently, as opposed to being subject to a “mere inconvenience, ” Meyer believes that he experiences “present and future harm to his finances” for having to drive, or transport his vehicles, to Charlotte, North Carolina. (Id. at 4.) Additionally, considering whether this court can provide redressability for his injuries, Meyer submits that “[a] lift on the restriction of Tesla operations in the state would guarantee they would open dealerships and service locations.” (Id. at 3 (emphasis added).) To support this proposition, Meyer cites to an organization and website that is not associated with Tesla. (Id. (citing TMC Staff, Tesla Direct Sales Map (US), Tesla Motors Club: Tesla Forum (Jan. 11, 2018), https://teslamotorsclub.com/tmc/threads/tesla-direct-sales-map-us.106111/).) Meyer also contends that South Carolina's dealership statute is unconstitutional, and the Governor of South Carolina is a proper party to the action because he has the “ultimate authority over enforcing all state laws” and “veto power.” (Id. at 9.)

         On April 17, 2019, Defendants replied to Meyer's Response. (ECF No. 18.) Defendants maintain that Meyer's pleading “attempts to prop up the[] inadequate allegations” of his Complaint, and his Complaint must meet the applicable pleading requirements. (Id. at 2.) Building upon their Motion to Dismiss, Defendants further emphasized that Meyer's Complaint “fails to meet the ‘traceability' and ‘redressability' elements of standing.” (Id. at 3 (citations omitted).) Importantly, Defendants point out that “Tesla is not a party to this suit.” (Id. at 4.) Moreover, Defendants continue to advocate for the constitutionality of ...


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