Carvana Co. is seeking a court’s reversal of a Michigan regulatory agency’s Oct. 7 decision to suspend and revoke the used-vehicle retailer’s license in Michigan.
In a complaint filed Thursday in the Michigan Court of Claims, Carvana asked for a temporary restraining order against Michigan Secretary of State Jocelyn Benson, whose office issued the license suspension and revocation. In its complaint, Carvana called the state’s actions “baseless,” saying the company was not provided with a hearing or an adequate opportunity to respond to allegations laid out in the suspension decision.
Carvana, in court filings Thursday, said it was forced to cease all in-state Michigan sales, which it said has delayed scheduled deliveries to 48 customers.
The lawsuit by Carvana comes one week after Michigan’s Department of State said it was suspending Carvana’s license for several alleged violations of the Michigan Vehicle Code, including multiple infractions involving titles, registrations and odometers.
“The arbitrary and abrupt actions of the Secretary of State have angered and disappointed our customers, some of whom have literally been stranded without a vehicle they had counted on to get them to work, doctors’ appointments or the grocery store,” a Carvana spokeswoman said in an emailed statement Friday to Automotive News. “We respectfully ask the courts to hold the Secretary of State accountable, halt its disruptive actions and compel state bureaucrats to work collaboratively with Carvana and our customers to remedy these technical issues as quickly as possible.”
The company asked the court to set a hearing date on its request for injunctive relief.
A spokeswoman for the Michigan Department of State declined to comment on the filing, citing pending litigation. She referred to a previous statement by the agency:
“The Michigan Department of State protects consumers when they make what are often among their family’s most significant purchases and buy a car. The Department does this in strict accordance with state and federal laws and does not provide special treatment to any dealership, including large, national corporations. Department staff met with Carvana on multiple occasions to explain Michigan law and suggest pathways to compliance. But instead Carvana continued selling vehicles without titles to scores of Michigan families, putting the residents at risk of legal violations, fines, and other penalties.”
Carvana followed a similar legal path in Illinois.
The online used-vehicle retailer asked an Illinois court for a temporary restraining order against the Illinois secretary of state after its license was suspended in that state. That request was granted July 29 by Judge Bonnie Wheaton of the 18th Judicial Circuit Court in DuPage County, west of Chicago, temporarily nixing the agency’s ability to suspend or revoke Carvana’s license.
Carvana this week also asked Michigan consumers to sign a petition supporting the company being able to continue to sell used vehicles in the state.
Shares in Carvana slipped 8.4 percent to $17.28 in late trading on Friday.
Carvana ranks No. 2 on Automotive News‘ list of the top 100 retailers ranked by used-vehicle sales, with retail sales of 425,237 used vehicles in 2021.
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