Tesla loses bid to kill class action over misleading customers on self-driving capabilities for years

A judge has ruled to allow a class-action lawsuit against Tesla over claims that the company has been misleading customers about its self-driving capabilities for years.

It’s the latest of a series of legal actions against Tesla regarding its deployment of advanced assisted driving systems, which the automaker describes as self-driving.

As we reported earlier this month, the floodgates of lawsuits opened against Tesla after it was found partially liable in a wrongful death case following a fatal crash involving Tesla Autopilot.

There are now a dozen similar cases moving forward against Tesla.

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On the other hand, Tesla has also been fighting legal actions from owners who felt misled by the automaker regarding the capabilities.

Tesla claimed that all vehicles built since 2016 have the hardware capable of achieving “full self-driving”, which isn’t the case, and Tesla has been selling a software package called “Full Self-Driving” (FSD) that it claimed would deliver unsupervised level 4-5 self-driving, and it hasn’t.

For years, owners of HW3 vehicles, which Tesla confirmed wouldn’t achieve unsupervised self-driving, have been trying to sue Tesla under a class action to be compensated for the failed promises, but Tesla has been trying to weasel out of the class action lawsuit due to its force arbitration clause in its sales contracts in the US, and claims that self-driving deployment is subject to “validation and regulatory approval.”

Today, U.S. District Judge Rita Lin said that the claim that Tesla lacked hardware to achieve the promise level of autonomy and its inability to “demonstrate a long-distance autonomous drive with any of its vehicles” justified group lawsuits by two sets of drivers who bought its FSD package.

In short, it amounts to false advertising, but one of the problems with making this a class action lawsuit is the fact that Tesla doesn’t do mass advertising and was making these claims through blog posts, its website, social media posts, and its CEO.

Judge Lin commented (via Reuters):

“While these channels alone may not ordinarily be enough to establish class-wide exposure for a traditional car manufacturer, Tesla’s distinctive advertising strategy warrants a departure from the typical approach.” 

The class action was certified with two subclasses:

• The first one covers California residents who purchased FSD packages between October 2016 and May 2017
• The second one covers FSD owners who opted out of Tesla’s arbitration agreement between 2017 and mid-2024.

On top of the damages to these Tesla owners, the legal action is also seeking an injunction to stop Tesla from making similar statements about its products in the future.

Electrek’s Take

Tesla has been trying to weasel out of this for years. This is a step in the right direction, even though it doesn’t go far enough in my opinion.

To me, it’s as simple as Tesla promised and sold something that it didn’t deliver.

Due to its forced arbitration in its sales contracts, which buyers have a limited time to opt out of following the purchase, it can limit the damages, but that’s just a technicality.

Ultimately, I think this will get the ball rolling to try to get Tesla accountable for not delivering on its promises.

This is just the beginning. There are approximately a dozen other lawsuits involving Tesla’s self-driving features currently pending in US courts.

I’m going to have more on that soon.