On Friday, a federal appeals court vacated the certification that had allowed California-based Tesla owners to pursue their Full Self-Driving advertising claims collectively, determining the litigation would proceed — if at all — on an individual basis rather than as a class action. A ruling from the U.S. 9th Circuit Court of Appeals determined that differences in what individual vehicle buyers may have seen before their purchases prevented the claims from being handled as a group, blocking thousands of California consumers from consolidating their cases into one proceeding — at least for now.
A procedural outcome arrived in Tesla's favour, yet the underlying question of whether the company's advertising practices misled consumers remains unresolved by the decision. Three circuit judges — Ronald Gould, Jay Bybee, and Daniel Bress — sitting on the appeals panel determined that those bringing the lawsuit had not established that every member of the proposed class had actually encountered the disputed statement on Tesla's website.
Three sets of plaintiff classes that a California judge had certified the previous year were at issue when Tesla brought its challenge before the appellate panel, which ultimately determined that a class-wide litigation framework was not viable. One assertion now driving the litigation holds that Tesla's website, for vehicles sold from October 2016 onward, carried a promise that those cars were already equipped with all the hardware required to achieve full autonomous driving.
That determination by U.S. District Judge Rita Lin — that the contested statement had likely reached thousands of people in the prospective buyer pool — provided the evidentiary foundation on which class certification rested before the appeals court intervened. Buyers who purchased Tesla's Full Self-Driving package at a premium price are now pursuing legal action, alleging the automaker overstated the hardware's capabilities and delivered software that fell short of what was promised — a characterisation Tesla disputes. No statement from Tesla arrived in the time available before publication of the ruling.
Stretching back to September 2022, the litigation — formally styled In re Tesla Advanced Driver Assistance Systems Litigation and filed in the Northern District of California — took shape when Thomas LoSavio, serving as lead plaintiff alongside fellow Tesla owners, brought a complaint alleging that the company had misled consumers through its marketing practices. By the time Judge Lin issued the class certification order that August 2025, the pool of individuals who met the eligibility requirements to participate had already narrowed considerably.
A ruling by federal judge Haywood Gilliam in September 2023 directed most of the original named plaintiffs toward individual arbitration, a path triggered by their having agreed to Tesla's standard purchase contract, while those who had formally opted out of that clause retained access to court proceedings. Judge Lin's order, once it arrived, defined two distinct groups of California Tesla owners and lessees who had paid separately for Full Self-Driving capability — the first group spanning October 20, 2016, through May 19, 2017, on a pre-arbitration basis, and the second running from May 19, 2017, through July 31, 2024, restricted to those who had opted out of arbitration.
At the heart of the proceedings lay the question of what role a particular hardware claim had played within Tesla's broader promotional efforts. Buyers could lock in the Full Self-Driving capability through a flat one-time payment of $8,000.
A ruling handed down by California's Department of Motor Vehicles in December 2025 determined that Tesla had breached the state's false-advertising statutes through its use of the names Autopilot and Full Self-Driving Capability to promote what regulators characterised as advanced driver assistance technology. Tesla was given a 60-day window by the agency to address the matter, after which its dealer licence could face suspension.
To keep its California dealer licence intact, Tesla made interim adjustments to its marketing materials before taking the dispute to court in February 2026, filing suit against the DMV on the grounds that the false-advertising determination rested on factual errors. Following pushback from German transport regulators over the "Full Self-Driving" label, Tesla committed to renaming the feature "Tesla Assisted Driving" across its European web presence.
Regulators opened a formal safety inquiry in October 2024 into approximately 2.4 million vehicles running Full Self-Driving software, after four collisions in reduced-visibility conditions drew federal attention — including one in which a pedestrian lost their life. Roughly two million Tesla vehicles became the subject of a federal recall inquiry launched in April 2024, after investigators documented 20 additional collisions that took place following a December 2023 remote software update intended to reinforce prompts reminding drivers to stay attentive — outcomes that raised questions about whether that initial remedy had achieved its intended effect.
A federal judge let stand the $243 million damages verdict tied to a fatal Autopilot crash in the Florida Keys, turning away Tesla's motion for a new trial after jurors had assigned the automaker roughly one-third of the liability for the collision. Friday's Ninth Circuit ruling addressed only the procedural question of whether the lawsuit qualifies for class-action status, leaving the substantive dispute over whether Tesla's Full Self-Driving marketing misled buyers without any ruling on its merits.
