U.S. appeals court decertifies 3 classes in Tesla self-driving case

Key Facts

On October 16, 2026, the U.S. Court of Appeals for the Ninth Circuit decertified two damages classes and a third class seeking injunctive relief in the case of “Lo Saviou v. Tesla,” and sent the case back to the district court for further proceedings. The court said the judge erred in assuming that all class members had seen the “hardware statement” that plaintiffs allege was misleading. The dispute concerns the capabilities of hardware in Tesla vehicles sold with Full Self-Driving packages, known as FSD. The Ninth Circuit concluded that this assumption was not enough to satisfy the requirement that common questions predominate in class actions. For now, the decision halts the buyers’ effort to pursue their claims together in one case, but it does not resolve the underlying allegations or the company’s liability.

The case stems from allegations that Tesla and its subsidiaries misrepresented the capabilities of their vehicles’ hardware, in violation of California consumer protection laws and common law. The lawsuit sought to represent buyers of vehicles and FSD packages in class actions, rather than having their claims heard individually. The district court initially certified two classes under Rule 23(b)(3) and a third under Rule 23(b)(2). The first two classes seek damages, while the third was tied to a request for injunctive relief. The Ninth Circuit granted Tesla permission to appeal the class certification decision before trial ended under Rule 23(f).

The appeals court’s ruling centered on whether buyers had actually encountered the disputed statement on Tesla’s “Autopilot” webpage. The court said completing an FSD package purchase did not require visiting that page. It concluded that one could not infer that every buyer had seen the statement simply because the page was available on the website. In the court’s words, there was “no specific requirement that an FSD purchaser pass through the Autopilot page to complete the purchase.” It therefore found that exposure to the statement could vary from buyer to buyer, weakening the common basis for certifying the class.

The district court relied in part on website traffic data. But the appeals panel said that data alone did not prove all class members had seen the “hardware statement.” It said page visits did not show whether each individual buyer had viewed the statement before purchasing. According to the ruling, “this data, standing alone, does not establish that all class members must have been exposed to the hardware statement.” The Ninth Circuit therefore found that the question of individual exposure could not be treated as settled for the entire class.

The exposure issue also affected defenses based on statutes of limitation, the court said, because their consideration depended on what buyers had seen on Tesla’s website and possibly on other statements. The Ninth Circuit said the inquiry “depends on the extent to which class members were exposed to the Autopilot website.” Because the date of access and the content each buyer saw could vary, the court found that these questions could not automatically be resolved on a class-wide basis. The appeals panel did not address plaintiff Lo Saviou’s proposed damages model. It said the exposure issue was sufficient to decide the appeal, stating: “Because exposure is dispositive, we do not address the adequacy of Lo Saviou’s proposed damages model.”

The court also decertified the injunctive-relief class because it included a subset of members of the two damages classes and was closely connected to them. It considered the class’s fate inseparable from the basis for the other two classes. Having decertified all three classes, the court sent the case back to the district court for further proceedings. The decision does not mean the court accepted the plaintiffs’ allegations of misrepresentation, nor does it establish that Tesla acted improperly or is liable. Reuters confirmed that the lawsuit remains pending and that the ruling did not decide its merits.

The class-certification process began on August 18, 2025, when the district court certified a limited class of California consumers not subject to arbitration agreements, according to Tesla’s 2025 annual report. The company said it filed a petition for permission to appeal on September 1, 2025, and that the Ninth Circuit granted the petition on December 18 of the same year. The district court then stayed the case on January 5, 2026, pending the appeal proceedings. The appeals panel heard arguments in San Francisco on August 31, 2026, before issuing its decision in October. The memorandum is unpublished and states that it is not precedent except under the exceptions set out in Ninth Circuit Rule 36-3.

Plaintiffs’ lawyers told Reuters they believed the panel had not fully appreciated the case’s particular circumstances and the importance of the hardware statement in Tesla’s marketing campaign. They described the statement as important to the marketing, reflecting a dispute over how widely it appeared and whether buyers saw it. The Ninth Circuit’s decision, by contrast, rests on the lack of proof that every buyer encountered the statement through the website page. Reuters had reported that thousands of California buyers brought together by the district court cannot, for now, pursue their claims together in one case. The next step is for the case to continue in the district court after remand, with the ruling setting no date for that based on the evidence available.