In a victory for Tesla, a federal judge in California ruled over the weekend that a group of Tesla owners cannot pursue lawsuits that the company falsely advertised its automated features. Instead, they will have to face individual arbitration.
U.S. District Judge Haywood Gilliam’s ruling is not a win for the defensibility of Tesla’s advanced driver assistance systems, Autopilot and Full Self-Driving (FSD), but simply for Tesla’s terms and conditions. The plaintiffs who filed the proposed class action in September 2022 actually agreed to arbitrate any legal claims against the company when they signed on the dotted line, according to the judge. They had 30 days to opt out, and no one chose to do so.
Forced arbitration has been a strong partner in the technology industry. Tesla’s success in avoiding a class-action lawsuit could encourage other automakers to rely more heavily on this tactic.
“In some ways, this is probably an indication that these types of claims are likely to have these types of challenges,” Ryan Koppelman, a partner at the law firm Alston & Bird, told TechCrunch.
Koppelman noted that arbitration is a common legal strategy used by companies to avoid individual claims and class actions like this one.
In this particular case, a fifth plaintiff chose not to participate in arbitration, but Judge Gilliam ruled to dismiss their claims because they had waited too long to file a claim, according to court documents.
“The obsolescence aspect is interesting because the claims made here relate to what Tesla products will be capable of in the future, in addition to what they were supposed to be capable of at the time of sale,” Koppelman said.
All of the plaintiffs in the case claimed they spent thousands of dollars on dangerous and unreliable technology that caused accidents, some of which resulted in death. Tesla denied any wrongdoing and moved to send the claims to arbitration, after indicating that the plaintiffs accepted the arbitration agreement.
Judge Gilliam also denied the plaintiffs’ request for a preliminary injunction “preventing the defendant from continuing to engage in its alleged illegal and deceptive practices.” In fact, the plaintiffs asked the court to force Tesla to stop marketing its advanced driver assistance systems as providing “full self-driving capability”; To stop selling and deactivate their FSD beta program; To warn all customers that Tesla’s use of terms such as “full self-driving capability,” “self-driving,” and “self-driving” to describe ADAS technology was inaccurate.
Falsely Announcement of autopilot and FSD
The original complaint, filed in September 2022, alleged that Tesla and CEO Elon Musk had been deceptively advertising its automated driving features as either fully functional or about to be “rolled out” since 2016, despite knowing well its capabilities. Autopilot and FSD. Doesn’t live up to the hype.
Prosecutors alleged that Tesla’s ADAS system caused vehicles to run red lights, miss turns and swerve in traffic, costing Tesla owners thousands of dollars.
Briggs Matsko, the plaintiff named in the lawsuit, said he paid $5,000 for his 2018 Tesla Model Tesla’s FSD costs an additional $12,000.
The failed class action lawsuit is not the only time Tesla’s so-called self-driving technology has come under scrutiny. Earlier this year, it emerged that Musk moderated a 2016 video overstating Autopilot’s capabilities.
The revelation came after a statement submitted by a senior engineer as evidence in a lawsuit against Tesla over a 2018 fatal accident involving former Apple engineer Walter Huang. The lawsuit alleges that the autopilot’s errors and Huang’s misplaced confidence in the system’s capabilities caused the accident.