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Greater New York Auto. Dealers Ass'n v. Department of Motor Vehicles

Supreme Court of New York, Albany County

April 10, 2013

In the Matter of the Application of GREATER NEW YORK AUTOMOBILE DEALERS ASSOCIATION and Brian Miller, Petitioners, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules
v.
DEPARTMENT OF MOTOR VEHICLES of the State of New York, Barbara Fiala, solely in her capacity as Commissioner of the Department of Motor Vehicles, Tesla Motors, Inc. and Tesla Motors New York LLC, Respondents.

[969 N.Y.S.2d 723] Philip H. Kalban, Esq., Putney, Twombly, Hall & Hirson LLP, New York, Attorneys for Petitioners.

Eric T. Schneiderman, Attorney General for the State of New York, Charles J. Quackenbush, Esq., AAG, of Counsel, Albany, Attorneys for Respondent Department of Motor Vehicles and Barbara Fiala, Commissioner.

Linda J. Clark, Esq., Hiscock & Barclay, LLP, Albany, Attorneys for Respondents Tesla Motors, Inc. and Tesla Motors New York, LLC.

Hermes Fernandez, Esq., Bond, Schoeneck & King, PLLC, Albany, Attorneys for Proposed Intervener New York State Automobile Dealers Association.

RAYMOND J. ELLIOTT, J.

Page 876

Petitioners filed an Amended Petition pursuant to CPLR Article 78 which sought a judgment cancelling and annulling the registration and the certificate of registration issued by the Commissioner of the Department of Motor Vehicles (" DMV" ) to Tesla Motors New York (" Tesla-NY" ) to register and operate as a retail motor vehicle dealer in the State of New York at 125 Westchester Avenue, White Plains, New York and at 630 Old Country Road, Garden City, New York. Alternatively, the Petitioners request that the DMV conduct necessary hearings in order to revoke and cancel the previously issued registrations. The Respondents move to dismiss the Amended Petition on the grounds the Petitioners lack standing, failed to state a cause of action as the determination of the DMV was not arbitrary and capricious and the Petition was untimely pursuant to CPLR 3211(a)(3), (a)(5) and (a)(7) and CPLR § 7804(f). On December 21, 2012, the New York State Automobile Dealers Association (" NYSADA" ) moved to intervene as a party in this action. Petitioners

Page 877

consented to NYSADA's application to intervene. Respondents oppose the Motion to intervene.

Respondent, Tesla Motors, Inc., is a California company that designs, develops, manufacturers and distributes electric vehicles. Tesla vehicles are sold in galleries and shopping mall locations, and Tesla does not maintain an inventory of vehicles. In order to purchase a Tesla vehicle, consumers must place a reservation for a vehicle which is later manufactured to their specifications. Tesla does not operate a dealership with cars on the lot.

Respondent, Tesla Motors New York LLC (" Tesla-NY" ), opened a store in New York City in 2009. Tesla-NY applied and received a license to operate as a new retail motor vehicle dealer in Manhattan. In June 2011, the Petitioner, Greater New York Automobile Dealers Association (" GNYADA" ), commenced a CPLR Article 78 proceeding challenging the DMV's issuance of a dealer registration to Tesla-NY in violation of Article 16 of the Vehicle and Traffic Law. On May 3, 2011, Supreme Court (O'Connor, J.) determined the Article 78 proceeding was untimely and dismissed the petition in its entirety.

In April 2012, Tesla-NY filed two applications with DMV to operate two additional stores in White Plains and Garden City, New York. In the applications for a new retail motor vehicle dealer registration, Tesla-NY certified that it was acting as a dealer and not as a " franchisor" pursuant to the Franchise Dealer Act. ( see, VTL § 415(7)(f)). Tesla-NY manages Tesla's stores in New York. Tesla maintains it does not have any dealers or retailers in New York besides Tesla-NY. On June 21, [969 N.Y.S.2d 724] 2012, DMV granted the application of Tesla-NY to register a White Plains facility as a retail motor vehicle dealer. On September 12, 2012, DMV granted the application of Tesla-NY to register a Garden City facility as a retail motor vehicle dealer. On December 7, 2012, Petitioners, GNYADA and Brian Miller, who owns automobile dealerships in Manhattan, Westchester County and Suffolk County, filed this CPLR Article 78 proceeding challenging the issuance of new retail motor vehicle dealer registrations to Tesla-NY for the White Plains and Garden City locations.

Petitioners claim Tesla is a wholly owned subsidiary of Tesla and Tesla is the manufacturer of automobiles under the Tesla trademark. Petitioners allege Tesla-NY is a retail new vehicle ...


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