Appeals Court Removes Class Status From Tesla "Full Self-Driving" Advertising Lawsuit

A federal appeals court has removed class status from a lawsuit accusing Tesla of misleading buyers about its self-driving technology. In a memorandum dated October 16, a three-judge panel of the US Court of Appeals for the Ninth Circuit undid the certification order in LoSavio v. Tesla, sending the case back to the trial court (Courts Cast, 24/7 Wall St.).

What the court decided

LoSavio v. Tesla (9th Cir.)	Details
Case number	25-7927
Date	October 16, 2026 (nonprecedential memorandum)
Panel	Judges Ronald Gould, Jay Bybee, Daniel Bress
Classes undone	Two damages classes and one injunctive-relief class of California FSD buyers
Original certification	August 2025, Judge Rita Lin, Northern District of California
Next step	Remanded to Judge Lin; named plaintiffs' individual claims continue

The panel held that the district court wrongly inferred that all buyers were exposed to the same allegedly misleading statement, according to Bloomberg Law. The statement sat on Tesla's Autopilot web page, and unlike a product label that every buyer sees, nothing required buyers to visit that page before purchasing (Yahoo Finance). Questions about individual exposure also undercut the lower court's finding on the limitations issue, and the injunctive class fell with the damages classes. Outlets variously describe the order as vacated or reversed; the effect is the same.

What the court did not decide

The panel did not rule on whether Tesla's statements were false or whether the company is liable, and it did not reach the damages model. The memorandum is nonprecedential: it binds the parties but carries less weight in other cases than a published opinion.

Reactions

Lawyers for the plaintiffs said, "we think the panel did not fully appreciate the unique circumstances here." Tesla has denied the claims and did not immediately comment on the ruling.

Why it matters

Class certification decides whether thousands of buyers can sue together or must bring claims one by one. Removing it greatly reduces pressure on a defendant, because individual cases are costly and legal fees can exceed what a single buyer would recover. The decision turns a case about a shared marketing message into one about what each buyer actually saw.

It also reflects a common point in advertising cases: where a claim appears everywhere, a court may presume buyers saw it; where it sits on a page buyers could skip, each buyer's exposure becomes a question of fact.

The wider context

The ruling does not affect regulators. Separately, Tesla recently replaced the Full Self-Driving name with "Tesla Assisted Driving" on several European websites as it seeks EU approval, a change unconnected to this case. For owners, nothing changes immediately, and anyone with an individual claim can still pursue it, subject to their purchase agreement.

What to watch next

Proceedings before Judge Lin, any request for rehearing, and whether the plaintiffs try to certify narrower classes.

Related on Gadgets365

• Tesla Q3 profit falls 43%, and unsupervised FSD slips to 2027
• Musk says Tesla's robotaxis can't yet be trusted to spot pets at night
• Tesla-SpaceX merger committees are not a deal