Authored by Matthew Vadum via The Epoch Times,
A federal appeals court blocked Tesla customers in California from pursuing class action claims that the company misled them about the hardware capabilities of its full self-driving (FSD) technology.
A class action is a lawsuit filed when a group of people or businesses suffer common injuries as a result of a party's alleged conduct.
For a consumer case to proceed as a class action, the buyers generally need to show they were all exposed to the same allegedly false statements in a similar way. Otherwise, each person's situation is too different for the claims to be tried together.
A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit ruled on Oct. 16 that the case cannot move forward as a class action because every buyer's situation is different.
To sue collectively, the buyers would have to show that they were all exposed to the same allegedly misleading company-supplied information in essentially the same way.
The panel held that the plaintiffs could not show that every class member had seen Tesla's hardware claim - the company's assertion that its vehicles already had the hardware needed for full self-driving. The judges wrote that an assumption of exposure to the hardware statement makes sense with product labels, because "every purchaser necessarily has the allegedly misleading statement in front of him."
That was not true here, they said. As the district court recognized, "there [was] no specific requirement forcing [FSD purchasers] through the Autopilot page to complete their purchase," the judges said.
The upshot of the ruling is that thousands of customers that the lower court had certified as a class cannot, at least for the time being, sue together jointly in a single legal proceeding.
The ruling does not deal with the merits of the claim advanced by Thomas LoSavio and other California-based Tesla buyers that Tesla misrepresented the vehicles' FSD capabilities. They allege that the company's alleged deception led them to pay extra money for software they say doesn't work properly.
In August 2025, U.S. District Judge Rita Lin in San Francisco ruled that Tesla must face the class action.
She said the question of whether Tesla vehicles lacked sensors for autonomy, along with the company's inability to "demonstrate a long-distance autonomous drive with any of its vehicles," justified group lawsuits by two sets of drivers who purchased its FSD package.
Lin certified the plaintiffs as a class for the purposes of the litigation. She said thousands of individuals probably read the company's claim on its website from October 2016 to August 2024 that its cars were equipped with FSD, and that Tesla CEO Elon Musk made a similar claim at a press conference in 2016.
"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 judge said.
Lin was referring to the company's direct-to-consumer model. Unlike traditional automakers that sell through dealers and lean on conventional advertising, Tesla directs most product information through its website and Musk's public statements.
The judge concluded that this made it more likely FSD buyers would have seen the hardware claim than would be true for a conventional car company.
The Ninth Circuit panel rejected that inference, finding Lin had improperly assumed classwide exposure. The panel vacated the class certifications and sent the case back to the district court for further proceedings.
Attorneys for the plaintiffs criticized the new ruling.
"We think the panel did not fully appreciate the unique circumstances here, and the importance of the hardware statement to Tesla's marketing campaign."
The Epoch Times reached out to Tesla for comment. No reply was received by publication time.