• by Tanya Gazdik , Yesterday

Photo Credit: Tanya Gazdik/MediaPost

Tesla and its CEO Elon Musk suffered a pair of legal setbacks last week.

“The rulings open the door for broader litigation over Tesla's marketing of its self-driving technology, and Musk's alleged role in efforts to defund the U.S. Agency for International Development (USAID),” according to Newsweek.

Federal judges in California and Maryland certified separate class-action lawsuits against the carmaker and its CEO personally.

In California, U.S. District Judge Rita Lin said  the claim that Tesla lacked hardware to achieve the promised level of autonomy and its inability to “demonstrate a long-distance autonomous drive with any of its vehicles” justified group lawsuits by two sets of drivers, according to Electrek. “In short, it amounts to false advertising, but one of the problems with making this a class-action lawsuit is the fact that Tesla doesn’t do mass advertising and was making these claims through blog posts, its website, social media posts, and its CEO [Elon Musk].”

The judge said in her decision that thousands of people likely saw Tesla's claim in the "Autopilot" section of its website from October 2016 to August 2024 that its vehicles contained hardware for Full Self-Driving. Tesla made a similar claim in a blog post, newsletter and quarterly earnings call, as did Musk at a 2016 press conference, according to Reuters.

"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," Lin wrote, adding that it was reasonable to infer that class members interested in Full Self-Driving technology went to Tesla's website to get information. 

"For years, critics of [Full Self-Driving], lawmakers, and lawyers have warned about the gap between Tesla’s marketing and its technological reality — even if it is now rapidly approaching its promises,” according to Not A Tesla App. “This lawsuit is the latest and most significant sign that Tesla could be facing a future legal battle due to the way it used to [market Full Self-Driving].”

Meanwhile, in Maryland, U.S. District Judge Theodore D. Chuang certified a class action against Musk personally. Plaintiffs allege that Musk was involved in efforts to dismantle or defund USAID programs, undermining the agency's operations.