Tesla wins fight for Michigan lawmaker records

Lansing – A federal magistrate on Monday ordered two Michigan lawmakers to turn over lobbyist communications sought by Tesla as the electric automaker fights a state dealership law prohibiting it from selling directly to consumers here.

U.S. Magistrate Judge Ellen Carmody rejected objections and attempts to quash subpoenas that Tesla attorneys served on state Sen. Joe Hune of Hamburg and Rep. Jason Sheppard of Temperance, both Republicans.

Under the order, which could be appealed, the lawmakers will be required to produce third-party communications requested by Tesla, including email exchanges with lobbyists.

The materials will be “for attorneys’ eyes only” because of an earlier protective order issued as part of Tesla’s lawsuit against the state, Carmody said.

Hune, whose wife is a registered lobbyist for a firm that represents auto dealers, backed substitute language for a 2014 amendment to state law that Tesla claims was a “protectionist” move to maintain an “existing monopoly” for dealers.

Tesla subpoenaed Sheppard because he allegedly told the California-based company in June 2016 that it will “not be allowed to operate in Michigan because Michigan dealers and manufacturers do not want Tesla in the state.”

Lawyers for Hune and Sheppard had argued legislative privilege for their clients and called the subpoenas an overly broad attempt “to harass legislators who will not buckle to Tesla’s demands” that Michigan change its law.

Terms of the new order were proposed by Tesla after negotiations with attorneys for the lawmakers, although Sheppard’s lawyer had continued to fight the subpoena because the court had initially discussed a time frame predating his time in office.

The order requires Hune to produce relevant documents from October 21, 2013, through April 21, 2015. Sheppard must produce documents from January 1, 2015, through December 31, 2016.

While Sheppard’s objections were “technically correct,” Carmody said it “would be absurd to limit” his subpoena to the same time period as Hune because Sheppard did not take office until 2015.

As The Detroit News previously reported, Kurt Berryman, a lobbyist and director of legislative affairs for the Auto Dealers of Michigan, is also fighting a Tesla subpoena, arguing the request has already caused him “cognizable harm” and “chilled” his right to free speech and association.

In a series of affidavits, Berryman told the court he would likely face further “harassment” if his legislative communications were exposed, citing combative emails and phone calls auto dealer associations received after the 2014 amendment.

Attorney General Bill Schuette’s office, defending the state in the case, has denied the 2014 amendment was anti-Tesla in nature, asserting that Michigan has long barred automakers from owning or operating dealerships.

“All other car manufacturers desiring to sell in Michigan operate under this same requirement,” Schutte’s office said in a recent filing. “But Tesla wants special treatment and refuses to bend to Michigan’s law; indeed, Tesla insists that Michigan should bend to Tesla’s innovative business plan and practices rather than Tesla altering its practices to comply with Michigan law.”

joosting@detroitnews.com