Tesla Inc (NASDAQ:TSLA), the electric vehicle (EV) producer, can celebrate another win after a judge ruled that a group of owners of its cars, who claimed the company used misleading information to market its autopilot features, will need individual arbitration rather than pursuing a class-action lawsuit.
U.S. District Judge Haywood Gilliam in Oakland, California, stated that the four Tesla owners who initiated the proposed class action had agreed to arbitrate any legal claims when they accepted the company's terms and conditions during vehicle purchases on the Tesla website.
Under the ruling, Tesla is now shielded from facing larger class-action claims from numerous vehicle owners.
Plaintiffs alleged that Tesla repeatedly made false statements suggesting that its advanced driver assistance systems (ADAS) technology was close to achieving fully self-driving vehicles. Having bought Tesla cars between 2017 and 2022, the complainants claimed they paid extra for the optional autonomous technology, but the car manufacturer’s promises were not fulfilled.
While Tesla didn’t comment on the ruling, Andrew Kirtley, a lawyer for some plaintiffs, expressed readiness to file thousands of individual arbitration cases on behalf of Tesla customers.
"It is telling that Tesla doesn’t want to defend its marketing practices in public in open court but instead has fought to get as many of these claims as possible sent to private arbitration," Kirtley said.