Published | Supreme Court of Georgia | Feb 17, 2026
...STATE OF GEORGIA et
al.
COLVIN, Justice.
This case concerns the constitutionality of two provisions of the
Georgia Motor Vehicle Franchise Practices Act, OCGA §
10-1-620 et
seq. The first of these provisions, OCGA §
10-1-664.1(c), generally
requires manufacturers to sell their new motor vehicles through a
new motor vehicle dealer (specifically, a dealer with a franchise for
such vehicles)....
...It provides that “no manufacturer or franchisor shall
offer to sell or sell, directly or indirectly, any new motor vehicle to a
consumer in this state, except through a new motor vehicle dealer
holding a franchise for the line make covering such new motor
vehicle.” OCGA §
10-1-664.1(c). The second of these provisions,
OCGA §
10-1-664.1(a), generally prohibits manufacturers and their
affiliated entities from owning or operating a new motor vehicle
dealer, providing that, as a general matter, it is “unlawful for any
manufacturer … or any … affiliate … of a ma...
...). And the Motor Vehicle
Fair Practices Act restricts who may obtain a dealer license by
10
restricting who may own or operate a “dealer”11 or “dealership”12 in
the state.
As relevant here, OCGA §
10-1-664.1(a) — the first component
of the Direct Sales Prohibition — generally prohibits manufacturers
and affiliated entities from owning or operating a dealer or
dealership, providing that, subject to certain exceptions, “[i]t shall
b...
...resentative of a
manufacturer … to own, operate, or control, directly or indirectly,
more than a 45 percent interest in a dealer or dealership in this
state.”
As noted above, the other component of the Direct Sales
Prohibition is OCGA §
10-1-664.1(c), which provides that, as a
general matter, “no manufacturer or franchisor shall offer to sell or
11 See OCGA §
10-1-622(1) (“‘Dealer’ means any person engaged in the
business of selling, offering to sell, solicitin...
...nsumer in
this state, except through a new motor vehicle dealer holding a
franchise for the line make covering such new motor vehicle.” By its
plain terms, this provision only regulates the sale to consumers of
“new motor vehicle[s].” OCGA §
10-1-664.1(c). And, as explained
below, because the statutory definition of that term has changed
over the years, so too has the effect of OCGA §
10-1-664.1(c).
Prior to a 2015 amendment, the Motor Vehicle Franchise
Practices Act defined “[n]ew motor vehicle” as “a motor vehicle
which has been sold to a dealer and on which the original motor
vehicle title has not been issued.” OCGA §
10-1-622(11) (2010)....
...icle on which the original
motor vehicle title has not been issued.” OCGA §
10-1-622(11). See
Ga. L. 2015, Act 159, § 1.
The change to the statutory definition of “new motor vehicle”
had a significant impact on the operation of OCGA §
10-1-664.1(c).
12
Prior to the 2015 amendment, when “new motor vehicle” was defined
as including only new vehicles that had been sold to a dealer, the
plain language of OCGA §
10-1-664.1(c) did not require
manufacturers to sell new motor vehicles through independent
franchised dealers....
...ch
has been sold to a dealer and on which the original motor vehicle
title has not been issued] to a consumer in this state, except through
a new motor vehicle dealer holding a franchise for the line make
covering such new motor vehicle.” OCGA §
10-1-664.1(c). After the
2015 amendment redefined “new motor vehicle” more broadly as any
motor vehicle without an issued title, however, the plain language
of OCGA §
10-1-664.1(c) applied differently, prohibiting
manufacturers from selling new motor vehicles directly to
consumers and requiring that manufacturers instead sell new motor
vehicles through independent franchised dealers. Specifically,
13
OCGA §
10-1-664.1(c) now provides that manufacturers cannot
“offer to sell or sell, directly or indirectly, any new motor vehicle [i.e.,
a motor vehicle on which the original motor vehicle title has not been
issued] to a consumer in this state, exce...
...consumers without using independent franchised dealers as
intermediaries — obtained a dealer license to sell new motor
vehicles directly to customers in Georgia. As further alleged in the
amended complaint, once the General Assembly redefined “new
motor vehicle” in 2015, OCGA §
10-1-664.1(c) would have prohibited
Tesla from selling new vehicles in the state directly to customers
without utilizing a franchised dealer as an intermediary. But the
same amendment that redefined “new motor vehicle” also added a
14
new provision to OCGA §
10-1-664.1 that created an exception to the
Direct Sales Prohibition for a limited class of electric motor vehicle
manufacturers who were operating dealerships in the state as of
January 1, 2015 — a class that (as appears undisputed on appeal)
includes, and could only ever include, Tesla. Specifically, the 2015
amendment added a new subsection — OCGA §
10-1-664.1(a)(8) —
which provides that OCGA §
10-1-664.1(a) “shall not be construed to
prohibit”:
The ownership, operation, or control by a manufacturer of
not more than five locations licensed as new motor vehicle
dealerships for the sale of new motor vehicles and any...
...entity controlled by such franchisor, or sold or
transferred a controlling interest in such
15
manufacturer to a franchisor or subsidiary or other
entity controlled by such franchisor.
OCGA §
10-1-664.1(a)(8); Ga....
...law with uniform operation throughout the state.19 First, the Direct
Sales Prohibition is a general law because the classifications it
draws are reasonable and relevant to the purpose of the legislation
19 As noted above, the portions of OCGA §
10-1-664.1(a) and (c) that
constitute the Direct Sales Prohibition and that Lucid challenges in this case
generally prohibit manufacturers and franchisors from selling new motor
vehicles directly to consumers in the state and prohibit manufacturers and
franchisors from owning, operating, or controlling a dealer or dealership. We
express no opinion about other portions of OCGA §
10-1-664.1(a) and (c).
39
at issue. Specifically, the classifications that are the subject of
OCGA §
10-1-664.1(a) and (c) are “manufacturer[s]” and
“franchisor[s].”20 The Direct Sales Prohibition therefore applies to
broad categories of entities that “are distinguished by
characteristi...
...own a new motor vehicle dealer or dealership and who may sell new
motor vehicles in the state to customers. Thus, the Direct Sales
Prohibition is a “general” law, not a “special” one.
Second, as the trial court correctly concluded, the Direct Sales
20 OCGA §
10-1-664.1(a) also includes a catchall phrase that applies to
certain entities or persons affiliated with a manufacturer or franchisor. See
OCGA §
10-1-664.1(a) (providing that it applies to “any manufacturer or
franchisor or any parent, affiliate, wholly or partially owned subsidiary, officer,
or representative of a manufacturer or franchisor” (emphasis added))....
...scope of its
provisions.” Zarate-Martinez,
299 Ga. at 311 (quotation marks
omitted). The plain language of the Direct Sales Prohibition applies
to any “manufacturer or franchisor” in the state. Specifically, the
challenged portion of OCGA §
10-1-664.1(a) applies equally to “any
manufacturer or franchisor” in the state, prohibiting such entities
from “own[ing], operat[ing], or control[ling] … more than a 45
percent interest in a dealer or dealership in this state.” And the
challenged portion of OCGA §
10-1-664.1(c) likewise applies equally
to any “manufacturer” or “franchisor” in the state, prohibiting such
entities from “sell[ing] … any new motor vehicle to a consumer in
this state, except through a new motor vehicle dealer hold...
...Sales Prohibition is a
general law, not a special law. Ga. Const. of 1983, Art. III, Sec. VI, Par. IV(a)
(emphasis added).
42
(c) Lucid argues that it has stated a claim under Paragraph IV
based on OCGA §
10-1-664.1(a)(8), which, as described above,
permits a limited class of electric vehicle manufacturers who were
operating dealerships in the state as of January 1, 2015, to sell their
vehicles directly to consumers in Georgia without using a franchised
dealer as an intermediary....
...also contends that the 2015 amendment (Ga. L. 2015, Act 159),
which simultaneously created the Direct Sales Prohibition and the
exception for Tesla, was invalid “special legislation.” As explained
below, the trial court correctly dismissed Lucid’s challenge to OCGA
§
10-1-664.1(a)(8) but failed to adequately consider whether Lucid
had stated a Paragraph IV claim challenging the 2015 amendment.
To the extent that Lucid claims that OCGA §
10-1-664.1(a)(8)
is a special law that violates Paragraph IV, Lucid lacks
43
constitutional standing to raise the claim....
...s been
violated, but it is enforcement of the Direct Sales Prohibition (which
prohibits manufacturers and their affiliates from selling new motor
vehicles directly to consumers in the state) that is the source of that
asserted legal injury. OCGA §
10-1-664.1(a)(8), which is an
exception to the Direct Sales Prohibition that does not apply to
Lucid, has no impact on Lucid’s asserted right to sell new vehicles
directly to consumers in the state. And Lucid has not identified any
other infringement of an asserted legal right of Lucid’s that results
from enforcement of OCGA §
10-1-664.1(a)(8)’s alleged
unconstitutional feature....
...an infringement upon his right of person or property, and that such
infringement results from the unconstitutional feature of the statute
upon which he bases his attack” (quotation marks omitted)).
Accordingly, Lucid lacks standing to challenge the constitutionality
of OCGA §
10-1-664.1(a)(8) by itself....
...By contrast, Lucid has constitutional standing to challenge the
enforcement of the 2015 amendment to the Motor Vehicle Franchise
Practices Act, Ga. L. 2015, Act 159. As explained above, that
22 We express no opinion about whether OCGA §
10-1-664.1(a)(8) may be
relevant to Lucid’s claims that the Direct Sales Prohibition violates Lucid’s
rights under the Equal Protection and Due Process Clauses, should the trial
court reach that question after further considering whether Para...
...tion of Paragraph
IV(c).
Accordingly, although we affirm the trial court’s dismissal of
Lucid’s Paragraph IV claim to the extent that Lucid directly and
separately challenged enforcement of the Direct Sales Prohibition
codified in OCGA §
10-1-664.1(a) and (c) and the exception for Tesla
codified in OCGA §
10-1-664.1(a)(8), we vacate the trial court’s
dismissal of Lucid’s Paragraph IV claim to the extent that Lucid
47
challenged the enforcement of the 2015 amendment (Ga....
