Tesla Prevails In Lawsuit Alleging Autopilot Fraud

Authored by Zachary Stieber via The Epoch Times,

Tesla has beaten a lawsuit alleging the company and its top officials misled the public and investors over the state of its autopilot systems.

Plaintiffs in the case failed to show Tesla CEO Elon Musk and other officials committed fraud with statements such as the autopilot on average being safer than normal drivers, U.S. District Judge Araceli Martínez-Olguín said in a Sept. 30 ruling.

Musk said during a 2019 investor event that “we publish accidents per mile every quarter, and what we see right now is that autopilot is about twice as safe as a normal driver on average.” That same year, he wrote on Twitter (now X) that “buying a car in 2019 that can’t upgrade to full self-driving is like buying a horse instead of a car in 1919.”

Those and other statements were false and misleading because they overstated the effectiveness of autopilot and omitted key information, according to the suit, brought by investor Thomas Lamontagne. The Securities Exchange Act prohibits making business-related statements that are manipulative or deceptive.

Tesla lawyers defended the statements, saying they were protected because they were forward-looking and accompanied by cautionary language.

Olguín sided with Tesla, finding that some of the statements “are plainly forward-looking statements of Tesla’s plans and objectives” and thus meet a safe harbor provision in federal law.

“Plaintiffs have failed to allege that these challenged statements contain such ‘concrete’ assertions of ‘current or past fact,’” the judge said.

Tesla and its officials also used cautionary language, such as telling investors that actual results could differ from projections.

A number of the statements, however, were not forward-looking, but plaintiffs did not show that Musk knew the statements were false, meaning they’re protected by another safe harbor provision, according to the ruling.

A third set of statements, including Musk’s saying that the system was “not going to be perfect, but what matters is that it is very clearly safer than not deploying it,” are not actionable because they constitute corporate optimism, the judge ruled.

She also sided with Tesla on other statements involving the safety of autopilot, such as Musk telling investors that autopilot was safer than normal drivers.

The plaintiffs have failed to provide contemporaneous reports or data showing the statements were false or misleading when made, the judge said.

“Even if this data existed at the time the statements were made, the fact that there were safety issues with the technology does not suggest that it was false or misleading to assert that the technology was safer than regular human driving,” she wrote.

Olguín dismissed the claims, but gave plaintiffs the opportunity to file a new complaint providing evidence the statements were false or misleading.

“Justice prevails,” Musk wrote on his social media platform X.

A lawyer for the plaintiffs did not return a request for comment.