Tesla Hit with False Advertising Class Action Over Cars’ Self-Driving Features

A consumer class action filed late last week claims that Tesla misled its electric car customers about its advanced driver assistance systems (ADAS) technology, which it marketed under names like “Autopilot,” “Enhanced Autopilot,” and “Full Self-Driving Capability” (FSD). The complaint says that the company, in large part per CEO Elon Musk, made inaccurate claims about the efficacy of the technology while using drivers as “guinea pigs.”

The complaint, brought on behalf of classes of nationwide and California Tesla purchasers and lessees, follows on the heels of two enforcement actions by the California Department of Motor Vehicles. Those suits alleged that Tesla falsely advertised its Autopilot and FSD technology features as making its vehicles autonomous. Instead, the DMV asserted that “‘vehicles equipped with those ADAS features could not at the time of those advertisements, and cannot now, operate as autonomous vehicles.’”

Last week’s action points to less than stellar safety and quality control assessments of Tesla’s features by industry experts suggesting that the features were deployed prematurely. For example, in October 2019 Consumer Reports tested Tesla’s “Smart Summon” feature, which Tesla said would allow owners to use a smartphone app to command their Tesla to drive itself across a parking lot without any occupants inside. “Consumer Reports’ testing revealed that the feature had difficulty negotiating a parking lot, with the summoned car crossing lane lines and wandering erratically ‘like a drunken or distracted driver,’” the complaint says.

Further, though Tesla claimed the ADAS features were ready, the suit counters that drivers were made to use beta software on public roads experimentally, and that the data they generated was used by Tesla to improve its software. Additionally, the 74-page lawsuit makes reference to numerous accidents that occurred while ADAS features were in use. 

The complaint argues that Tesla made representations about its features knowing they were false. For motive, it says that Tesla did so “to generate excitement and interest in the company’s vehicles and thereby improve its financial condition by, among other things, attracting investment, increasing sales, avoiding bankruptcy, driving up Tesla’s stock price, and helping to establish Tesla as a dominant player in the electric vehicle market.”

The California plaintiff states claims for violations of the federal Magnuson-Moss Warranty Act and California’s False Advertising Law, Consumers Legal Remedies Act, and Unfair Competition Law, as well as for fraud and deceit, negligent misrepresentation, negligence, and unjust enrichment.

The plaintiff and putative class are represented by Bottini & Bottini Inc.