Ninth Circuit Finds that California Class Action Lawsuit Against Tesla Cannot Move Forward

Last year in August of 2025, A California District Court Judge Rita Lin certified a class action lawsuit against Tesla. In the class action lawsuit, the Tesla owners claim that the company had falsely represented to them that the Tesla cars had sensors that allowed the car to use its “full self-driving technology” and that the car could drive long-distances while in this full self-driving mode. For those unfamiliar, a class action lawsuit is where a person or a small group of people are able to bring a lawsuit on behalf of a larger group (in this case, a group of thousands) who are similarly injured by a defendant or defendants. In order for someone to bring a class action lawsuit, they must have the class of people certified by a judge. The judge will determine if all the people in the class can show they were each wronged by the same person(s) in the same way. If each person’s claims are too different, their claims cannot be tried together, the class will not be certified, and the class action lawsuit cannot proceed. If that were to happen, each person would have to bring their own individual lawsuit against Tesla.

In certifying this class of Tesla owners, Judge Rita Lin stated that each of these thousands of individual Tesla owners had probably read Tesla’s claim that its cars were capable of full self-driving mode on its website sometime from October 2016 through August 2024. In addition, Tesla CEO Elon Musk made a similar statement during a 2016 press conference. Judge Lin justified these unusual findings because of the peculiar way that Tesla advertises directly to its customers and admitted that “[w]hile 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.” Because of Tesla’s peculiar way of advertising directly to consumers through its website and through Elon Musk’s statements, Judge Lin believed it was more likely that the Tesla owners would have seen the claim that each car had the hardware to enter full self-driving mode. Judge Lin stated that Tesla’s advertising was very different from the traditional advertising other car manufacturers have always (and still do) rely heavily on -namely through dealerships and conventional advertising.

Well, the Ninth Circuit recently issued an opinion in which they disagreed with Judge Lin. The Ninth Circuit made clear that in order to certify this class of Tesla car owners, the Plaintiffs would need to show that each and every class member (thousands of them) had seen Tesla’s claim that its cars had the hardware to enter a full self-driving mode. Moreover, Judge Lin’s claim that one could assume the thousands of class members had seen Tesla’s hardware claim would only be a viable claim if Tesla’s hardware claim was placed on a product label where “every purchaser necessarily has the allegedly misleading statement in front of him.”

This case is interesting because many businesses are now online only and have no brick-and-mortar stores like dealerships. In fact, these new businesses do not rely on traditional advertising and, instead, rely heavily on social media and online reviews. When consumers see these social media posts and online reviews, their only way to purchase these products is through a website. The future of many businesses is online and through direct-to-consumer advertising. In Tesla’s case, the court’s decision to not allow a class action to continue means that each person who wants to sue Tesla must do so individually on their own dime. This could be a huge deterrent for some Tesla owners.