In a victory for Tesla, a California federal judge ruled over the weekend that a group of Tesla owners cannot pursue in court claims that the company falsely advertised its automated features. Instead, they will have to face individual arbitration.

U.S. District Judge Haywood Gilliam’s ruling isn’t a win for the defensibility of Tesla’s advanced driver assistance systems, Autopilot and Full Self-Driving (FSD), but simply for Tesla’s terms and conditions. The plaintiffs who filed the proposed class action in September 2022 did in fact agree to arbitrate any legal claims against the company when they signed on the dotted line, according to the judge. They had 30 days to opt out, and none chose to do so.

Forced arbitration has been a stalwart partner in the tech industry. Tesla’s success in dodging a class action lawsuit could encourage other automakers to lean more heavily on this tactic.

“In some respects, it probably does put down a marker that these types of claims will likely face these types of challenges,” Ryan Koppelman, partner at law firm Alston & Bird, told TechCrunch.

Koppelman noted that arbitration is a common legal strategy used by companies to avoid individual claims and class actions like this one.

In this specific case, a fifth plaintiff did opt out of arbitration, but Judge Gilliam ruled to dismiss their claims, as they waited too long to sue, according to court documents.

“The statue of limitation aspect is interesting because the claims at issue here had to do with what the Tesla products will be capable of in the future, as well as what they were supposedly capable of at the time of sale,” said Koppelman.

The plaintiffs in the case all claimed to have spent thousands of dollars on unreliable and dangerous technology that has caused accidents, some resulting in death. Tesla has denied wrongdoing and moved to send the claims to arbitration, after citing the plaintiffs’ acceptance of the arbitration agreement.

Judge Gilliam also denied the plaintiffs’ motion for preliminary injunction “prohibiting the defendant from continuing to engage in its allegedly illegal and deceptive practices.” In effect, the plaintiffs asked the court to force Tesla to stop marketing their ADAS as providing “full self-driving capability”; to stop selling and de-activate their FSD beta software; and to alert all customers that Tesla’s use of terms like “full self-driving capability,” “self-driving” and “autonomous” to describe the ADAS technology was inaccurate.

Falsely advertising Autopilot and FSD

The original complaint, filed in September 2022, alleged that Tesla and its CEO Elon Musk have been deceitfully advertising its automated driving features as either fully functioning or close to being “solved” since 2016, despite knowing full well that the capabilities of Autopilot and FSD don’t live up to the hype.

The plaintiffs alleged that Tesla’s ADAS cause vehicles to run red lights, miss turns and veer into traffic, all the while costing Tesla owners thousands of dollars.

Briggs Matsko, the named plaintiff in the lawsuit, said he paid $5,000 for his 2018 Tesla Model X to get Enhanced Autopilot. Tesla’s FSD costs an additional $12,000.

The failed class action isn’t the only time Tesla’s so-called self-driving technology has come under scrutiny. Earlier this year, Musk was found to have overseen a 2016 video that overstated the capabilities of Autopilot.

The revelation came from a deposition from a senior engineer taken as evidence in a lawsuit against Tesla for a fatal 2018 crash involving former Apple engineer Walter Huang. The lawsuit alleges that errors by Autopilot, and Huang’s misplaced trust in the capabilities of the system, caused the crash.

Hello and welcome back to Max Q!

In this issue:

• Mining water on the moon with Starpath Robotics
• News from Blue Origin, SpaceX and more

Starpath Robotics has emerged from stealth with an ambitious plan to design, launch and operate machines to mine and refine water for rocket propellant using resources on the moon and Mars.

In-situ resource utilization of water for the purposes of making rocket propellant is not a new idea. Rocket propellant is a mix of liquid oxygen (LOX) and some other combustible fuel, like hydrogen, kerosene or methane. Given that there is plenty of water on the surface of the moon and Mars, people have long speculated that these resources could be put toward making propellant in space — and building a self-sustaining human colony off-world.

Click the link above to read more about how Starpath envisions turning this science fiction into a reality.

Image Credits: Starpath Robotics

More news from across TC

Concept image of a Dream Chaser craft attached to an inflatable habitat. Image Credits: Sierra Space

Max Q is brought to you by me, Aria Alamalhodaei. If you enjoy reading Max Q, consider forwarding it to a friend. 

When Elon Musk rebranded Twitter to X this summer, there were concerns that the new company could face trademark lawsuits as there were nearly 900 active U.S. trademark registrations that cover the letter and branding “X” across various industries, according to comments made by trademark attorney Josh Gerben, speaking to the press at the time. Now his firm is representing what may be the first client to sue X over its trademark — a Florida-based social media ad agency, X Social Media, that connects clients with opportunities to market themselves across social platforms like Facebook and Instagram.

The complaint, which was filed in the U.S. District Court for the Middle District of Florida, was initially reported by Bloomberg Law. It states that X Social Media, LLC “has continuously used the X Social Media Mark in commerce since at least early 2016,” and has significantly invested in marketplace awareness, which included developing a distinctive “X” mark that’s associated with its social media advertising services.

For what it’s worth, X Social Media’s “X” looks nothing like Musk’s “X” — in fact, it’s an image that is actually a figure of a person where the “X” has distinctive arms and legs holding a pair of scales — a symbol the company uses to designate its specialty in serving clients in the legal industry. 

Nevertheless, the complaint argues that Twitter’s rebranding to “X” infringes on its own mark, and that its “recent attempt to register the mark in association with social media, business data, promotion and advertising, business consulting, market research services, and advertising services…necessitates this action” because it causes “serious irreparable harm” to X Social Media.

In addition, the complaint alleges that the marketing and awareness that was built around Twitter’s rebranding to X, as Musk’s vision to transform the company into an “everything app,” has caused consumer confusion because people may believe that X Social Media’s advertising services are being offered by or are in association with X.

X Social Media is also now ranking lower in search results for its own name, as Google points to X Corp.’s Wikipedia entry as a top result.

The suit also makes the case that several of X Corp.’s trademark applications are for services similar to X Social Media’s offering, including business data analysis; promotional services; business consulting and information services; and business, consumer, and market research.

Ahead of its lawsuit, X Social Media sent a cease-and-desist letter to X Corp. in August, but the company declined to stop using the mark, it says.

X Social Media’s suit wants the court to stop X Corp. from using the “X” in its advertising and marketing materials and publish corrective advertising to address consumer confusion; X Social Media is also asking for damages.

Though X Social Media’s case may mark one of the first companies to target Musk’s X Corp. it may not be the last. Gerben had previously warned that the mark was used by hundreds of companies and had told Reuters there was a “100% chance” Twitter would be sued by somebody over the X rebranding.

X is not the first major tech rebrand to result in a lawsuit, Bloomberg’s report also noted. Facebook’s rebranding to Meta saw multiple suits, including from a VR company, blockchain group and software company. Meanwhile, Block settled with tax preparation service H&R Block after rebranding from Square.

X Corp. didn’t reply to requests for comment on the suite, sending only its auto-reply email “Busy now, please check back later.”