A federal judge has allowed a key portion of a lawsuit against Tesla to proceed, spotlighting allegations that the company failed to inform buyers about a potential flaw causing vehicles to brake unexpectedly without any collision threat.
In Chicago, U.S. District Judge Georgia Alexakis ruled that a proposed class action can move forward on claims that Tesla concealed this safety issue, known as “phantom braking,” from prospective customers. While some aspects of the lawsuit were dismissed, including claims related to inflated insurance premiums from Tesla’s own insurance arm, the central accusation of withholding defect information remains intact.
The lawsuit, filed by consumers in Illinois and Ohio, alleges that Tesla’s forward collision monitoring system triggers false crash alerts, resulting in abrupt braking. Plaintiffs argue that Tesla has been aware of the defect since at least 2015 but failed to disclose it to buyers, some of whom report higher insurance costs tied to the system’s inaccurate data.
Tesla denies prior knowledge of the issue before one plaintiff’s vehicle purchase in 2021 and asserts that no direct communications misled customers about the defect. However, the judge found enough connection between Tesla’s omissions on its website and consumer purchasing decisions to keep the case alive. The court has also left the door open for plaintiffs to revise their complaint regarding insurance claims.
This decision comes amid broader scrutiny of Tesla’s safety and insurance practices, adding to the challenges faced by Elon Musk’s electric vehicle empire.
