In a recent ruling by Judge Reid Scott of the Circuit Court for Palm Beach County, it has been determined that there is “reasonable evidence” suggesting Tesla (NASDAQ: TSLA) CEO Elon Musk and other managers were aware of defects in the Autopilot system but permitted the vehicles to be operated unsafely.
This finding emerged from a lawsuit surrounding a fatal 2019 crash in Florida, where a Tesla Model 3 collided with an 18-wheeler, resulting in the death of owner Stephen Banner.
The judge’s decision allows the plaintiff to proceed to trial, introducing the possibility of punitive damages against Tesla for intentional misconduct and gross negligence. This setback for Tesla follows its success in two product liability trials in California earlier this year related to the Autopilot system.
The court found that Tesla engaged in a marketing strategy portraying its products as autonomous, with Musk’s public statements significantly influencing perceptions of the technology’s capabilities. The judge noted “alarming inconsistencies” between what Tesla knew internally and what it was communicating externally through its marketing. Furthermore, the plaintiff can argue that Tesla’s warnings in manuals and agreements were inadequate.
The judge drew parallels between Banner’s crash and a 2016 incident involving Joshua Brown, where the Autopilot system failed to detect crossing trucks. This similarity led the judge to conclude that Tesla, through its CEO and engineers, was likely aware of the Autopilot’s deficiencies.
The ruling also referenced a 2016 video used for Autopilot marketing, where a Tesla was shown driving without human intervention. The judge noted that the video, lacking disclaimers indicating its aspirational nature or the technology’s non-existence in the market, presented scenarios similar to Banner’s accident.
Tesla has not yet commented on the ruling, and the trial, initially scheduled for October, remains pending a rescheduled date.
Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.