Tesla has been successful in moving a proposed class action lawsuit to arbitration. The proposed lawsuit alleged the automaker engaged in false advertising by providing exaggerated driving range estimates.
The legal action was launched last year in California, one week after allegations surfaced in a report that Tesla had formed a dedicated team to dismiss appointments concerning range issues, and that the company had fielded numerous complaints from vehicle owners that the actual driving ranges were not meeting the advertised distances.
Additionally, the report accused Tesla of directing its engineers to create algorithms that would predict excessively optimistic distances that vehicles could achieve on a full charge.
While U.S. District Judge Yvonne Gonzalez Rogers did not rule on the merits of the allegations, she did move the case to arbitration. In the ruling published on Thursday, the judge said owners must take their cases up individually with the automaker, and not form a class action lawsuit, because that is what they agreed to when they purchase a vehicle from Tesla. (via Reuters)
Here is the relevant excerpt in the Tesla purchase agreement for Canada and the US, which says owners give up the right to sue, and must pursue claims through arbitration. It is worth noting the ‘Agreement to Arbitrate’ clause is the only clause in the agreement that is highlighted with a box to draw the reader’s attention to it.
This is not the first time Tesla has been able to enforce this clause in the purchase agreement. Last year two proposed class action lawsuits were moved to arbitration by a judge. One case involved alleged false advertising claims on Autopilot, while the second involved allegations of intrusive video recordings being accessed and viewed by Tesla employees.
Tesla recently updated the driving range estimates for most of their vehicles due to changes in the EPA testing protocols.
