DETROIT (Reuters) - Tesla Motor Co (O:TSLA) said it will "vigorously defend" against a lawsuit filed by the Virginia Automobile Dealers Association (VADA) that seeks to keep the electric carmaker from opening and operating a second company-owned dealership in Virginia.
Tesla has sought to open its own stores in several states despite franchise laws that, in most cases, do not allow, a manufacturer to own and operate an auto dealership.
Tesla in an emailed statement on Thursday said the VADA lawsuit "is entirely without merit."
"Tesla has always complied with the terms of the parties' settlement agreement" reached in 2013 that allowed the carmaker to open a dealership in northern Virginia, the company said. A Tesla dealership opened in February 2015 in Tysons Corner, a suburb of Washington, D.C.
Tesla said in its statement that the 2013 agreement does not prohibit it from opening future dealerships. VADA takes the opposite position in its lawsuit filed on Wednesday in Fairfax County, Virginia.
The 2013 agreement was reached as a compromise between Tesla, the commissioner of the Virginia Division of Motor Vehicles and the VADA.
"We will vigorously defend against VADA’s lawsuit and continue to fight for our customers and consumer freedom in Virginia," Tesla said in its statement.