Tesla Resolves Most of Lawsuit That Alleges Sudden Acceleration

(Bloomberg) -- Tesla Inc. resolved most of a purported class-action lawsuit by customers who alleged that their Model S and Model X vehicles would suddenly accelerate, which in some cases resulted in accidents.

Lawyers for the carmaker and the plaintiffs said in a filing Tuesday in federal court in Santa Ana, California, that six plaintiffs will drop their claims and that the remaining plaintiff and his son will only pursue individual claims and no claims on behalf of other Tesla drivers. Settlement terms weren’t disclosed.

Key Insights

• By avoiding a class-action case, Tesla won’t have to face the combined resources of plaintiff lawyers who can command a bigger settlement than an individual plaintiff.
• The narrowing of the case to only a California plaintiff means that Tesla can’t be held liable for any alleged defects under the laws of other states, including Florida and New Jersey, that were part of the class-action complaint.

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