Conflicting laws

[NeilTheCop]

What is the name of your state? New Mexico


The framers of the NM Constitution apparently hated the idea of a monopoly so much they mandated that laws be enacted to prevent them.

NM Constitution Article IV at 38

“The legislature shall enact laws to prevent trusts, monopolies and combinations in restraint of trade.”

And they did.

NMSA 57-1-2

“It is hereby declared to be unlawful for any person to monopolize or attempt to monopolize, or combine or conspire with any other person or persons to monopolize, trade or commerce, any part of which trade or commerce is within this state.”

So far so good, until I wanted to buy an electric car and found out that I can only buy a new car through a franchised dealership, but not direct from the manufacturer, as only the franchised dealerships can sell direct to the public.

NMSA 57-16-1 (Very long, so not posted)

So on one hand monopolies and their restraint of trade are illegal, but the auto dealerships monopoly isn’t, making the laws contradictory.

As an analogy imagine if you have a local lumber yard and want to buy some lumber for a project, but are told they can’t sell it to you. Instead they can only send it to Home Depot/Lowes etc. who will add their mark up before you are allowed to buy it.

Any thoughts, or am I missing something?

 

[LdiJ]

What is the name of your state? New Mexico


The framers of the NM Constitution apparently hated the idea of a monopoly so much they mandated that laws be enacted to prevent them.

NM Constitution Article IV at 38

“The legislature shall enact laws to prevent trusts, monopolies and combinations in restraint of trade.”

And they did.

NMSA 57-1-2

“It is hereby declared to be unlawful for any person to monopolize or attempt to monopolize, or combine or conspire with any other person or persons to monopolize, trade or commerce, any part of which trade or commerce is within this state.”

So far so good, until I wanted to buy an electric car and found out that I can only buy a new car through a franchised dealership, but not direct from the manufacturer, as only the franchised dealerships can sell direct to the public.

NMSA 57-16-1 (Very long, so not posted)

So on one hand monopolies and their restraint of trade are illegal, but the auto dealerships monopoly isn’t, making the laws contradictory.

As an analogy imagine if you have a local lumber yard and want to buy some lumber for a project, but are told they can’t sell it to you. Instead they can only send it to Home Depot/Lowes etc. who will add their mark up before you are allowed to buy it.

Any thoughts, or am I missing something?

That analogy isn't how a monopoly is defined. Believe it or not, a business has to be licensed for retail sales. If they are not, they are not permitted to sell at the retail level. Some choose not to get licensed because they do not want to deal with retail sales and the collection of sale tax. Other might go ahead and get licensed, but make few to no retail sales because of their contracts with their customers AND not wanting to deal with the collection of sales tax.

A monopoly is where there is only one source for a type of product and the consumers have no options to purchase it or it's equivalent, elsewhere.

Example: If there are 50 places in town where I can buy beer, but only one place where I can buy Coors Light, that is not a monopoly. However, if there is only one place in town where I can buy any beer at all, then that would be a monopoly.

 

[Taxing Matters]

What you are missing is the legal definition of a monopoly. The most basic definition for a monopoly is a company that is the sole source of a particular kind of good or service in the relevant market. It is not a monopoly for an electric car company (or any other company) limiting the its products through a particular sales channel. It could decide to only sell direct, only sell to authorized dealers, etc. For the electric car company to be a monopolist in its sales to customers it would have to be the ONLY sellers of electric cars in that market. The basic idea of anti-trust laws is ensuring competition in the relevant market, in this case that market is electric vehicles. Other car companies make and sell electric vehicles, so you do have a choice from whom you buy the vehicle. That you want to buy a specific item from some other sales channel, like independent dealer or direct from the manufacturer and those alternatives don't exist isn't going to be an illegal monopoly.

Furthermore, under federal anti-trust law, a natural monopoly generally does not violate the law. A natural monopoly occurs, for example, when one company's goods are so popular with customers that others are not interested in competing with them because so few customers would want their alternative version of the product. I did not find any NM case law on the subject of what constitutes a monopoly under NMSA § 57-1-2. As a result, I think it likely that the state courts would rely on federal law for that.

Litigation involving monopoly in federal court is very expensive. It would likely be expensive in NM state courts too, in part because there is a lot of details about monopolies that the court would need to decide since the statute doesn't provide that. If you want other places to buy the car, look for dealers that carry it in some other states. It's not uncommon for car buyers to buy the car they want from outside their own state.

 

[Taxing Matters]

However, if there is only one place in town where I can buy any beer at all, then that would be a monopoly.

But not necessarily one that violates federal and state anti-trust laws.

 

[Foamback]

As an analogy imagine if you have a local lumber yard and want to buy some lumber for a project, but are told they can’t sell it to you. Instead they can only send it to Home Depot/Lowes etc. who will add their mark up before you are allowed to buy it.

Any thoughts, or am I missing something?

Your analogy is false. You can’t go to a sawmill and buy a 2x4, or a can of beer at a brewery.

In fact, you probably can’t buy any car from the manufacturer

 

[zddoodah]

NMSA 57-16-1 (Very long, so not posted)

NMSA section 57-16-1 isn't at all long: "The distribution and sale of motor vehicles in this state vitally affects the general economy of the state and the public interest and welfare of its citizens. It is the policy of this state and the purpose of this act to exercise the state's police power to ensure a sound system of distributing and selling motor vehicles and regulating the manufacturers, distributors, representatives and dealers of those vehicles to provide for compliance with manufacturer's warranties, and to prevent frauds, unfair practices, discriminations, impositions and other abuses of our citizens."

As you can see, it says nothing at all about electric cars or only being allowed to buy from franchised dealerships or not being allowed to buy direct from a manufacturer.

So on one hand monopolies and their restraint of trade are illegal, but the auto dealerships monopoly isn’t, making the laws contradictory.

Even if you were correct about what section 57-16-1 said, a law requiring that mandates that electric cars may only be purchased through a franchised dealership, but not direct from the manufacturer has nothing whatsoever to do with monopolies, and your post virtually compels the conclusion that you don't understand what a monopoly is.

P.S. While I didn't scour Chapter 57 of the NMSA (Trade Practices and Regulations), I saw nothing that prohibits a manufacturer from selling direct to a consumer. Of course, manufacturers may choose not to sell direct.

You can’t go to a sawmill and buy a 2x4, or a can of beer at a brewery.

I can't speak intelligently about sawmills, but you most certainly can buy cans (and bottles and glasses) of beer at breweries.

 

[quincy]

You can buy 2x4s at some sawmills. Buying directly from a mill generally can save you money.

And many breweries sell beer in cans and bottles.

 

[Zigner]

Even if you couldn't, it wouldn't be a monopoly if the mill decided to sell only to established retailers. Hell, it wouldn't be a monopoly even if the mill decided to sell to only one retailer. There are plenty of other mills around.

 

[quincy]

I think it was simply a misunderstanding of “monopoly” that drove the question posed by Neil.

If he wants to buy an electric vehicle, he will want to check out vehicles at various car dealerships and compare and contrast.

 

[Taxing Matters]

Your analogy is false. You can’t go to a sawmill and buy a 2x4, or a can of beer at a brewery.

In my state we have a large number of microbreweries who will happily sell you bottles of their product if you go the brewery.

Some car manufacturers sell direct to the consumer too. For example, Ford has a program where you can buy your new Ford directly from Ford online and get a loan for it from Ford's finance division at the same time. Ford protects its dealers by not undercutting them much on the prices, but it is an option for those who want to avoid the high pressure sales tactics found at some dealerships.

 

[zddoodah]

In my state we have a large number of microbreweries who will happily sell you bottles of their product if you go the brewery.

AFAIK, you can buy beer at all of the major U.S. breweries. I toured the Sam Adams Brewery in Boston last year and was able to do so.

Some car manufacturers sell direct to the consumer too. For example, Ford has a program where you can buy your new Ford directly from Ford online and get a loan for it from Ford's finance division at the same time. Ford protects its dealers by not undercutting them much on the prices, but it is an option for those who want to avoid the high pressure sales tactics found at some dealerships.

A few years after I graduated law school, a fellow associate with my firm told me about a thing where BMW will fly you to Munich and pay for your lodging and you can buy a BMW direct from the source and have it shipped back to the U.S. (for about the same total cost as buying it from a dealer here in the U.S.). I have no idea if the story was true, though.

 

[cbg]

I'm not much of a beer drinker but we have wineries here in New England that will be happy to directly sell you all the bottles you want. They'll give you the names of local distributors, but they're more than happy to sell you anywhere from a single bottle to a dozen cases.

 

[quincy]

In my state we have a large number of microbreweries who will happily sell you bottles of their product if you go the brewery.

Some car manufacturers sell direct to the consumer too. For example, Ford has a program where you can buy your new Ford directly from Ford online and get a loan for it from Ford's finance division at the same time. Ford protects its dealers by not undercutting them much on the prices, but it is an option for those who want to avoid the high pressure sales tactics found at some dealerships.

Ford has always (to my knowledge) had a direct sell program, with financing available, to its employees.

I have attended parties held at breweries in various cities around the country and they have always had bottles of their beer brand for sale on a to-go basis. Same with wineries.

 

[Bali Hai Again]

Book a wine tasting tour in the beautiful Finger Lakes Region of NYS either by car or boat and you can buy all the wine you can carry home.

Went on some brewery tours in Milwaukee (the beer capitol of the world) and bought beer to take back to the hotel.

Personally, I wouldn’t buy a Ford or any other car using unconventional purchasing practice unless there was considerable
money left in my wallet.

 

[Taxing Matters]

Ford has always (to my knowledge) had a direct sell program, with financing available, to its employees.{/QUOTE]

I wouldn't be surprised to hear Ford still does that today, and very likely the other auto manufacturers do too. Deals for employees are offered by a lot of companies, particularly the larger ones. Many years ago right out of college I applied for a first level management job at a big CA telecommunications company. At their headquarters campus they had a store that sold to employees at discounted prices and could even pay for them via payroll deductions. Retail sellers are known for giving discounts to employees as a perk to help offset the low wages many of their rank and file employees earn.

I have attended parties held at breweries in various cities around the country and they have always had bottles of their beer brand for sale on a to-go basis. Same with wineries.

One of my good friends is a beer hound and goes to microbreweries everywhere he goes because he gets to taste what they have and then walk out with a bunch of bottles of his favorites. I'd sometimes go with him, but I'm not a beer drinker so it wasn't nearly as exciting to me as it was for him. He also brewed his own beer, but of course was not permitted to sell what he made.