Amans v. Tesla, Inc.

Background

The plaintiffs alleged that Tesla offered Solar Roofs at an artificially low price and later increased the price. They sought specific performance, meaning a court order requiring performance of the contract; restitution; and damages. The opinion specifically discusses claims by Amans and Malek. Tesla moved to dismiss the claims.

Mootness

Tesla argued that Malek's claims were moot because Tesla had installed his roof at the original contract price. The court rejected that argument because Malek plausibly alleged that Tesla charged him at least an additional $10,500, and the parties disputed what that charge covered. A refund could provide effective relief.

Tesla also argued that Amans's claims were moot because Tesla offered to install his roof at the original price. The court held that Tesla had not shown that its challenged conduct could not reasonably recur. In particular, Tesla continued to assert that its contract allowed it to increase the roof price, and Malek plausibly alleged that he was overcharged despite Tesla's promises.

Equitable relief and restitution

Tesla argued that the court could not grant equitable relief—relief other than money damages, such as specific performance or restitution—unless the plaintiffs showed that damages would not be an adequate remedy. The court held that Amans adequately explained why damages might not be sufficient: he alleged that no comparable Solar Roof products currently existed.

The court held that Malek had not explained why restitution, rather than damages, was needed to remedy his injury. It therefore granted dismissal of the restitution claim, with leave to amend because Malek might be able to identify an alternative legal theory supporting restitution.

Breach of contract

Tesla argued that the contract authorized its price increases. The court found that the contract language appeared to authorize a more limited increase tied to the final cost of repairs, not a general increase in the roofing agreement's price. Another provision appeared to allow a limited increase based on unforeseen conditions at the installation location or changes to the solar portion of the roof, but Tesla had not justified the challenged increases on those grounds.

The court concluded that, at minimum, these provisions were ambiguous. It therefore denied the motion to dismiss the breach of contract claim seeking specific performance and damages.

Statutory and fraud-based claims

The plaintiffs' claims under the Consumer Legal Remedies Act, California Business and Professions Code section 7160, and the fraudulent prong of California's Unfair Competition Law relied on allegations that Tesla offered an artificially low price while planning to increase it later. The plaintiffs also alleged that Tesla intentionally misrepresented installation timing. Because these were fraud-based allegations, they had to meet Federal Rule of Civil Procedure 9(b)'s heightened pleading requirement.

The court held that the complaint did not provide enough facts to support an inference that Tesla intended, when the original agreements were made, to raise prices or mislead customers about installation timing. The court dismissed those claims. It also dismissed the UCL claim based on allegedly unfair conduct because it relied on the same fraud theory, and dismissed the UCL claim based on allegedly unlawful conduct because it depended on alleged violations of the Consumer Legal Remedies Act and section 7160.

The court stated that the UCL, Consumer Legal Remedies Act, and section 7160 claims were dismissed without prejudice to seeking leave to file an amended complaint if discovery on the surviving claims provided a good-faith basis for more specific fraud allegations.

Truth in Lending Act claim

Tesla argued that Malek lacked standing—a sufficient concrete injury to bring the claim—to pursue his Truth in Lending Act claim. Malek did not respond to that argument in his opposition. The court dismissed the Truth in Lending Act claim with prejudice.

Disposition

The motion to dismiss was denied as to the breach of contract claim for specific performance and damages. It was granted as to the breach of contract claim for restitution and as to the claims under the Unfair Competition Law, Consumer Legal Remedies Act, California Business and Professions Code section 7160, and Truth in Lending Act. The restitution claim was dismissed with leave to amend; the UCL, Consumer Legal Remedies Act, and section 7160 claims were dismissed without prejudice to seeking leave to amend under the conditions stated by the court; and the Truth in Lending Act claim was dismissed with prejudice.