US appeals court blocks class actions over Tesla's self-driving claims

By Mike Scarcella

Oct 16 (Reuters) - A US appeals court threw out on Friday an order allowing Tesla TSLA.O customers in California to pursue class action claims accusing the electric vehicle maker of misleading them about the capabilities of its full self-driving technology.

In its ruling, a three-judge panel of the San Francisco-based 9th US Circuit Court of Appeals said there were too many individualized questions about what buyers actually saw before making a purchase, and so they could not sustain their lawsuit as a class action.

The appeals court decision is a win for now for Tesla, which had urged the appeals court to vacate orders by a California judge last year certifying three sets of classes. The ruling means the thousands of California buyers the lower court had grouped together cannot, for now, pursue their claims jointly in a single case.

The ruling is not on the merits of the plaintiffs' lawsuit alleging false advertising, and the case remains pending. The plaintiffs contend Tesla is misrepresenting its vehicles' hardware capabilities for full self-driving, convincing customers to pay extra money for software that they say does not work.

In a statement, the plaintiffs' lawyers said "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 a request for comment. Tesla has denied the plaintiffs' claims.

In the underlying case, US District Judge Rita Lin last year ruled that thousands of prospective buyers were likely exposed to Tesla's claim on its website that vehicles sold from October 2016 to the present contained hardware needed for full self-driving capability.

But the appeals court panel — Circuit Judges Ronald Gould, Jay Bybee and Daniel Bress — said the plaintiffs could not show that all class members had been exposed to the allegedly false statement.

The US Chamber of Commerce filed a court brief in support of Tesla and urged the appeals court to strike the class certification orders. The business advocate said the underlying ruling "threatens to substantially increase the costs to businesses and consumers of overbroad and meritless class proceedings."