California Judge Rules Tesla Owners Must Pursue Autopilot Claims in Individual Arbitration

A California federal judge has made a significant ruling in favor of Tesla Inc (TSLA.O), stating that a group of Tesla owners must pursue their claims regarding the company’s autopilot features through individual arbitration rather than court. This decision means that Tesla will not have to face class action claims from larger groups of vehicle owners.

U.S. District Judge Haywood Gilliam ruled that four Tesla owners, who filed a proposed class action last year, had agreed to arbitrate any legal claims against the company when they accepted its terms and conditions during their vehicle purchases. Additionally, the judge dismissed the claims of a fifth plaintiff who did not sign an arbitration agreement, stating that they had waited too long to sue.

The lawsuit alleges that Tesla misled the public by repeatedly making false statements about its advanced driver assistance systems (ADAS) technology, claiming it was on the verge of delivering fully self-driving vehicles. The plaintiffs, who purchased Tesla cars between 2017 and 2022 and paid for the optional ADAS technology, argue that the technology has been unreliable and has led to accidents, injuries, and deaths.

Tesla has denied any wrongdoing and moved to send the claims to arbitration based on the plaintiffs’ acceptance of the arbitration agreement. Judge Gilliam rejected the plaintiffs’ claims that the signed agreements were unenforceable.

This ruling comes amidst the ongoing trial in California state court where plaintiffs allege that Tesla’s Autopilot feature caused a fatal accident. Tesla maintains that the accident was the result of driver error and not a flaw in its technology.

Tesla and the plaintiffs’ lawyers have not yet commented on the recent ruling.