A US federal appeals court has thrown out an order that let Tesla buyers in California sue the company together as a class over claims about the hardware in its cars for “full self-driving” (FSD). The Ninth Circuit Court of Appeals vacated the class certification on 16 October and sent the case back to the lower court. It did not decide whether Tesla’s statements were misleading. The ruling is an unpublished memorandum, which means it is not binding precedent, and the case itself continues.
What the court decided
The case is LoSavio v. Tesla. Thomas J. LoSavio sued “on behalf of himself and similarly situated individuals”, alleging that Tesla “violated California’s consumer protection statutes and common law by misrepresenting Tesla cars’ hardware capabilities with respect to the full self-driving (FSD) packages that Tesla sold”, according to the court’s memorandum. Tesla has denied the claims, Reuters reports.
District Judge Rita F. Lin of the Northern District of California had certified two classes under Federal Rule of Civil Procedure 23(b)(3) and a third under Rule 23(b)(2). Tesla was given permission to appeal that decision before the case finished.
A three-judge panel of Circuit Judges Ronald Gould, Jay Bybee and Daniel Bress reversed it. “We hold that the district court erred by inferring classwide exposure to the allegedly misleading Hardware Statement and concluding that Rule 23(b)(3)’s predominance requirement was satisfied,” the memorandum says. The panel concluded: “Accordingly, we vacate the district court’s order certifying the (b)(3) classes and the (b)(2) class and remand for further proceedings.”
What class certification and predominance mean
A class action lets one or a few people sue on behalf of a larger group with similar claims. Before that can happen, a judge must “certify” the class, deciding it meets the rules for group litigation.
For one type of class, under Rule 23(b)(3), the court must find that questions common to the whole group “predominate” over questions that differ from person to person. In the memorandum’s words, the issue was whether “common questions concerning class members’ exposure to the Hardware Statement and the applicability of the limitations defenses” outweighed “individualized questions”. The panel said they did not.
The Rule 23(b)(2) class was what the memorandum calls an “injunctive-relief class”: a group seeking a court order to change behaviour rather than money. Because it was defined as a subset of the (b)(3) classes, the panel said it “rises and falls with the (b)(3) classes”.
Why the panel ruled for Tesla
The central question was whether every buyer could be assumed to have seen Tesla’s “Hardware Statement” on its Autopilot webpage. Reuters describes this as Tesla’s claim that vehicles sold from October 2016 onwards contained the hardware needed for full self-driving capability.
According to the memorandum, Judge Lin had compared the case to product-label cases, stressing Tesla’s reliance on its website. She found it “highly likely” that customers would “visit the website when considering the purchase of an expensive package such as . . . FSD.”
The panel called that analogy “legally erroneous”. With a label, “every purchaser necessarily has the allegedly misleading statement in front of him,” it wrote. Here, by contrast, “there [was] no specific requirement forcing [FSD purchasers] through the Autopilot page to complete their purchase.” The panel also found that Tesla’s website-traffic data and other statements were not enough to show that all class members were exposed.
The panel said the same problem affected the statute-of-limitations defences, because “individualized questions of exposure pervade the statute of limitations analysis”. It did not consider the plaintiffs’ damages model: “Since the exposure issue is dispositive, we do not address the propriety of LoSavio’s proposed damages model.”
What happens now
The ruling “is not on the merits of the plaintiffs’ lawsuit alleging false advertising, and the case remains pending”, Reuters reports. Reuters says it means “the thousands of California buyers the lower court had grouped together cannot, for now, pursue their claims jointly in a single case.” The case goes back to Judge Lin for further proceedings.
The plaintiffs’ lawyers said in a statement, quoted by Reuters: “we think the panel did not fully appreciate the unique circumstances here, and the importance of the hardware statement to Tesla’s marketing campaign.” Tesla did not immediately respond to Reuters’ request for comment.
The US Chamber of Commerce filed a brief supporting Tesla. According to Reuters, it argued that the lower court’s ruling “threatens to substantially increase the costs to businesses and consumers of overbroad and meritless class proceedings.”
What we don’t know
- Whether the plaintiffs will try to certify narrower classes, or seek a further review.
- How the case will proceed for individual buyers.
- Whether Tesla will comment.
What this means
- The Ninth Circuit has vacated class certification in the Tesla FSD hardware case, finding that buyers’ exposure to the disputed statement could not be assumed for everyone.
- This is not a finding on whether Tesla’s claims were true or false, and the unpublished memorandum is not binding precedent.
- The lawsuit continues in the district court, but buyers cannot, for now, pursue their claims together as a class.
Sources
- US Court of Appeals for the Ninth Circuit: LoSavio v. Tesla, Inc., No. 25-7927, memorandum filed 16 October 2026 (PDF)
- Reuters via Yahoo Finance: US appeals court blocks class actions over Tesla’s self-driving claims
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