A U.S. appeals court reversed a decision that had allowed California customers to sue Tesla as a class. The lawsuit alleges Tesla misled consumers by falsely advertising that its vehicles had the hardware needed for full self-driving capabilities. [2, 3]
A panel of the 9th U.S. Circuit Court of Appeals ruled that the case could not proceed as a class action because buyers faced individual questions about what they saw before purchasing. The plaintiffs could not show that every class member had seen the allegedly misleading statements on Tesla’s website. [3, 4, 6, 8]
The ruling dismantles a collective legal threat and means plaintiffs must pursue their claims individually, which can be prohibitively expensive. The false-advertising lawsuit can still proceed, but not as a class action. [2, 3]
Tesla’s stock fell despite the favorable ruling, amid a broader sell-off in the technology sector. [6, 9]