Carvana’s attempt to get a temporary restraining order against Michigan Secretary of State Jocelyn Benson has failed. A Michigan Court of Claims judge has denied the retailer’s request, which was made after its license to sell vehicles was suspended by the state.
Why Did The State Go After Carvana?
Michigan claimed that its decision to halt operations at Carvana‘s Novi, Michigan, vending machine was made to protect the public from “imminent harm.” The state alleges that Carvana committed “fraudulent acts” by destroying titles and sales documents of vehicles that it sold, then taking those vehicles back.
Carvana, though, called these claims “baseless,” arguing that the state was trying to shut it down over “technical paperwork violations involving title and transfer issues.” According to the Detroit Free Press, it termed the state’s decision “illegal and irresponsible.”
More: Michigan Deems Carvana An “Imminent Threat” To The Public, Suspends Their License To Sell Cars
Michigan Court of Claims Judge Thomas Cameron disagreed with Carvana, though, ruling that the “defendant’s decision to suspend plaintiff’s license without a hearing is statutorily permitted” and that there was, therefore, no violation of its due process rights.
Carvana Fires Back And Vows To Fight Back
A Carvana spokesperson says, though, that it maintains that the Secretary of State’s recent actions are illegal, despite the ruling. It reiterated its belief that this issue “amounts to technical paperwork.”
“We are disappointed by the court’s decision and we are considering all legal options to protect our customers and ensure the Secretary of State is held accountable for their illegal actions,” a spokesperson told Carscoops. “The Secretary of State has brazenly violated its own rules, regulations and due process requirements while making false and reckless statements rather than engaging in constructive dialogue to remedy these technical paperwork issues.”
In his ruling, though, Judge Cameron added that the company did not offer any evidence to support its claim that the suspension had caused “irreparable injury to its goodwill” and its overall economic well-being.
More: Carvana Thinks It Is Being Targeted After Michigan Revoked Its License
“Plaintiff states it ‘is the second-largest used car retailer in the United States and has sold over 1 million vehicles,'” the judge wrote. “Thus, plaintiff’s assertion that it suffered loss of goodwill due to the suspension is insufficient to show irreparable harm, in particular because plaintiff’s Michigan-based sales are a subset of its overall operations.”
Indeed, Carvana says that it will continue to sell vehicles online while this legal battle continues.
“The Secretary of State has agreed we can continue selling online to our Michigan customers and we plan to continue doing so while this matter is addressed,” Carvana’s spokesperson said. “As we consider next steps, we will continue serving extraordinary online car buying and selling experiences to our Michigan customers, and we will continue collaboratively working with state bureaucrats to remedy these issues as quickly as possible.”
