Unreported / Non-Citable
Background
Thomas J. LoSavio sued Tesla, Inc. and affiliated entities on behalf of a putative class, alleging that they violated California consumer protection statutes and common law by misrepresenting the hardware capabilities of Tesla vehicles in connection with its full self-driving (FSD) packages. The Northern District of California certified two classes under Federal Rule of Civil Procedure 23(b)(3) and a third, injunctive-relief class under Rule 23(b)(2). Tesla obtained permission under Rule 23(f) to appeal the certification order, and the Ninth Circuit exercised jurisdiction under 28 U.S.C. § 1292(e).
The dispute centered on the Hardware Statement, which appeared on Tesla's Autopilot webpage. To satisfy predominance, LoSavio had to show classwide exposure to it. The district court reasoned by analogy to product-label cases, citing Tesla's unique marketing strategy and the central role of its website, and found it highly likely that customers would visit the website when considering an expensive package like FSD. It recognized, however, that nothing required FSD purchasers to pass through the Autopilot page to complete a purchase. It also found that common questions predominated on Tesla's statute of limitations defenses, and it defined the (b)(2) class as a subset of the (b)(3) classes.
The Court’s Holding
Reviewing for legal error before abuse of discretion, the panel held that the district court erred by inferring classwide exposure to the Hardware Statement. Plaintiffs bear the burden of satisfying Rule 23, and the Ninth Circuit has recognized a presumption of classwide exposure where a misrepresentation was part of an extensive, long-term advertising campaign or appeared on a label or other medium typically provided to all customers. A label inference works because every purchaser necessarily sees a consistently used label. Here, the inference required two assumptions: that purchasers reached the Autopilot webpage and that they saw the statement there. Even if the statement's prominence supported the second, the first prevented an inference of classwide exposure, as in Sevidal v. Target Corp., where customers had to click an optional tab.
Other evidence did not fill the gap. The website-traffic data, which the district court described as consistent with classwide exposure while addressing Tesla's rebuttal, did not by itself show that all class members must have been exposed. Statements reinforcing the Hardware Statement's message appeared elsewhere, not on a label or in material given to all prospective purchasers, and alone or combined with the webpage did not amount to an extensive, long-term advertising campaign. The exposure problem also infected the limitations analysis, because whether Tesla's statements kept consumers from discovering their claims depends on exposure to the Autopilot website and potentially other statements. Individualized exposure questions therefore pervaded that defense, and predominance was not met.
The panel vacated the (b)(3) certification. Because the (b)(2) class was a subset inextricably linked to the (b)(3) classes, it vacated that certification as well, declined to address the proposed damages model, and remanded for further proceedings.
Key Takeaways
- This is an unpublished memorandum disposition that is not precedent except as provided by Ninth Circuit Rule 36-3, so it illustrates the court's approach without binding later panels.
- A product-label inference of exposure fails where nothing required purchasers to visit the webpage carrying the challenged statement.
- Website-traffic data and reinforcing statements made outside the webpage did not substitute for evidence that the misrepresentation was pervasively disseminated to all class members.
- Individualized questions about exposure can defeat predominance on statute of limitations defenses, even though some individualized limitations questions will not bar certification in every case.
- The panel vacated and remanded rather than ending the case, and it did not address the damages model, so what the parties may do on remand remains open.
Why It Matters
Although nonprecedential, the memorandum shows how the Ninth Circuit applies its exposure-presumption cases to online sales: a prominent statement on an optional webpage is not equivalent to a label every buyer must see. Plaintiffs seeking certification of California consumer claims built on website statements should expect to prove exposure with more than the likelihood that customers visited a page or aggregate traffic data.
The ruling is not a merits decision. The panel vacated certification and remanded without deciding whether any class could be certified on a different showing, and it expressly left the damages model unaddressed. The underlying claims remain pending in the district court.