Rasmussen v. Tesla, Inc.

Background

David Rasmussen brought this class action against Tesla, Inc., doing business as Tesla Motors, Inc. The proposed settlement concerned changes to the maximum battery voltage caused by Tesla software updates issued in May 2019, July 2019, and March 2020.

The settlement class consisted of all U.S. residents who, between May 15, 2019, and September 1, 2020, owned or leased a Tesla Model S vehicle that experienced a limitation of maximum battery voltage as a result of Tesla’s May 2019 software update. The presiding judge, immediate family members of the presiding judge, and Tesla and its officers and directors were excluded.

The court had preliminarily approved the settlement and ordered notice to the class. It found that notice was properly provided, including notice required under the Class Action Fairness Act, and that class members had an opportunity to exclude themselves. People who timely and validly excluded themselves were not bound by the final order; other class members were bound by it.

Final Approval

After reviewing the filings, settlement agreement, supporting declarations, and arguments at a June 16, 2022 hearing, the court gave final approval to the settlement. Applying the requirements for approving a class settlement, the court found that the settlement was fair, adequate, reasonable, and in the best interests of the settlement class.

The court considered the strength of the plaintiff’s claims, the likely expense and difficulty of continued litigation, the method for distributing relief, the risks of maintaining class-action status, the relief provided, informal discovery, class counsel’s experience and views, and the class’s positive reaction. It also examined the settlement and negotiation history and found no signs of improper coordination. The court found that experienced counsel and neutral mediators participated, that the benefits were substantial and appropriate, and that attorneys’ fees and costs were negotiated only after agreement in principle on the settlement’s substantive terms.

Objection

Miles Lewis objected to final approval. He said he had spent approximately $10,000 on a larger battery for his Tesla Model S and that, although software updates restored the battery’s maximum voltage, the vehicle’s full 300-mile range had not been restored. He sought a refund or restoration of the full range.

The court overruled the objection. It stated that Lewis had not provided factual support for the reduced range, that no other class member had raised the issue, and that vehicle data showed the battery’s maximum voltage had been restored to 100 percent. The court also concluded that the settlement was not required to resolve every possible consequential-damages claim, particularly an unsubstantiated issue that was not the focus of the case.

Class Certification and Settlement Terms

For settlement purposes only, the court certified the settlement class under Federal Rule of Civil Procedure 23(b)(3) and 23(c), appointed Rasmussen as class representative, and appointed the listed attorneys as class counsel. It found that the requirements for a class action under Rule 23(a) and (b)(3) were met, including numerosity, common questions predominating, typical claims, adequate representation, and superiority.

The court ordered the parties to perform their settlement obligations and incorporated the settlement agreement, including its releases, into the court’s order. Upon the settlement’s effective date, Rasmussen, settlement class members, and other releasing parties would release claims relating to the specified software-update changes to maximum battery voltage. The releases did not cover claims involving motor-vehicle accidents, personal injury, or property damage.

The court dismissed the action with prejudice and without costs, except as otherwise provided in the order and settlement. Upon the effective date, the released claims could not be pursued in another lawsuit, arbitration, or proceeding, and the releases and settlement would have preclusive effect in pending and future proceedings. The court also retained jurisdiction to implement, enforce, interpret, and monitor compliance with the settlement.

Payments and Judgment

The court approved payment from the settlement fund of $373,377.79 in attorneys’ fees and $36,622.21 in costs to class counsel. It also approved a $1,000 service award to Rasmussen. The order stated that the settlement and order were not admissions by Tesla or Rasmussen about the truth or merit of the allegations, liability, fault, or wrongdoing.

Judge Beth Labson Freeman directed the clerk to enter the final approval order and accompanying judgment without delay.