Tesla Inc. failed to dismiss a proposed class action lawsuit accusing it of concealing a defect in its vehicles' braking systems that allegedly causes them to stop automatically without a collision risk, according to a ruling by U.S. District Judge Georgia Alexakis in Chicago on Friday.
While the judge dismissed some claims, including allegations that Tesla's insurance arm charged consumers inflated premiums due to the defect, she allowed the core claim to proceed.
The lawsuit, filed by two consumers from Illinois and Ohio in 2023, accuses Tesla of failing to warn potential buyers about an alleged defect in its forward collision monitoring system. The defect purportedly triggers false crash warnings and automatic braking even when there is no real danger.
The plaintiffs claim Tesla was aware of the issue as early as 2015 but did not disclose it to buyers, leading consumers to rely on incomplete or misleading information when purchasing Tesla vehicles.
Tesla denied prior knowledge of the alleged defect before one of the plaintiffs purchased his vehicle in early 2021. The company also argued that plaintiffs failed to identify specific instances where Tesla intentionally misled buyers.
However, Judge Alexakis ruled that the plaintiffs had sufficiently linked Tesla’s alleged omission of safety information on its website to consumers’ reliance on that information during their purchase decisions.
The court dismissed claims related to inflated insurance premiums offered through Tesla’s insurance program, stating the plaintiffs had not yet provided enough evidence to support the allegation.
Alexakis allowed the plaintiffs to amend their complaint to attempt to revive those claims.
The lawsuit, which seeks class-action status, could have significant implications for Tesla if more buyers come forward with similar allegations. The proposed class action could cover a wide range of consumers who purchased Tesla vehicles equipped with the forward collision monitoring system.
Neither Tesla nor the plaintiffs' attorneys have commented on the ruling.
Tesla’s braking systems have previously drawn scrutiny from regulators. In 2022, the National Highway Traffic Safety Administration (NHTSA) launched an investigation into more than 750,000 Tesla vehicles over reports of "phantom braking."
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