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Coffin-selling monks resurrect Tesla's direct-sales plans

A peculiar bit of case law could help Tesla in a federal fight to maintain the way its cars are sold.

Andrew Hoyle/CNET

Tesla is the subject of much debate regarding its direct-to-consumer sales method. Dealership groups are up in arms at the notion of being circumvented, and many states have passed laws in an attempt to maintain the status quo. But the Palo Alto, California automaker is not prepared to go down without a fight, and it's using some strange case law to make its argument.

In the event Tesla can't convince every state to allow direct sales, it may attempt to set a precedent in federal court. The Wall Street Journal reports that the electric automaker is preparing its case by referring to a 2013 federal appeals case that involves coffins, monks and Hurricane Katrina.

In the wake of Hurricane Katrina, monks from St. Joseph Abbey in New Orleans were barred from selling caskets directly to customers. Even though there was a coffin shortage, the state wouldn't permit any sales unless Louisiana's board of funeral directors issued the monks a license. The court ruled in the monks' favor, and the Fifth Circuit Court of Appeals upheld the ruling, giving Tesla solid ground on which to argue its own case (the dealership groups being the funeral directors in this analogy).

Of course, it's not that cut and dry. Other appeals courts have upheld licensing requirements, which could cut into the automaker's argument. This debate will only grow as Tesla finally begins selling the Model 3, an affordable electric sedan that should cost about one-third the price of its current lineup. And given how some states are still working to stymie Tesla's efforts, this issue likely won't resolve itself without more protracted legal battles.