COMPLAINT against Tesla, Inc. by Raymond Flores. Attorney Zohdy, Tarek H. added. (Filing fee $ 405, receipt number ACAEDC-11247655) (Attachments: # (1) Civil Cover Sheet)(Zohdy, Tarek)
Page 1
Tarek H. Zohdy (SBN 247775)
Tarek.Zohdy@capstonelawyers.com
Cody R. Padgett (SBN 275553)
Cody.Padgett@capstonelawyers.com
Laura E. Goolsby (SBN 321721)
Laura.Goolsby@capstonelawyers.com
Capstone Law APC
1875 Century Park East, Suite Los Angeles, California Telephone: (310) 556-Facsimile: (310) 943-
Attorneys for Plaintiff Raymond Flores
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
RAYMOND FLORES,
Plaintiff,
v.
Case No.:
COMPLAINT FOR:
(1)
Violations of California Civil Code,
§§ 1750 et seq. (California
Consumer Legal Remedies Act —
Injunctive Relief Only);
(2)
Violations of California Unfair
Competition Law, §§ 17500 et seq.
(False Advertising Law —
Injunctive Relief Only);
(3)
Violations of California Business &
Professions Code §§ 17200 et seq.
(Unfair Business Practices –
Injunctive Relief Only);
(4)
Violations of California Business &
Professions Code, §§ 17200 et seq.
(Unlawful Business Practices–
Injunctive Relief Only);
TESLA, INC., d/b/a TESLA
MOTORS, INC., a Delaware
Corporation,
Defendant.
DEMAND FOR JURY TRIAL
COMPLAINTPage 2 INTRODUCTION
1.
This case arises out of Tesla Inc. d/b/a Tesla Motors, Inc.’s
(“Defendant” or “Tesla”) unfair and deceptive marketing of its electric vehicles’
mileage range. Specifically, Plaintiff seeks to compel Tesla to disclose to the public
that, with respect to Tesla Model 3, S, Y and X (collectively the “Tesla Vehicles”):
(1) Tesla’s advertised total mileage range for the Tesla Vehicles is based on
charging the Vehicle to 100%, but Tesla discourages charging its vehicles to 100%;
therefore, Tesla’s advertised mileage range for the Tesla Vehicles is misleading; (2)
the range of the Tesla Vehicles can drop by up to 50% in cold weather, compared
to advertised ranges; and (3) that the ranges of the Tesla Vehicles were not estimated
based on U.S. Environmental Protection Agency (“EPA”) standardized formulae—
despite Tesla advertising the range estimates as “EPA estimates”—but instead
based on Tesla’s own proprietary software method and algorithms for calculating
range, which allowed for a more aggressive estimate of total electric vehicle range.
2.
Tesla advertises its vehicles to the general purchasing public, and the
public is harmed because Tesla advertises exaggerated driving ranges of its electric
vehicles.
3.
In or around June 2023, Plaintiff Raymond Flores (“Plaintiff”)
purchased a new 2023 Tesla Model Y vehicle designed, manufactured, marketed,
distributed, sold, and warranted by Tesla. Tesla representatives had told him to
expect a mileage range of 325 miles, which is also the number advertised on Tesla’s
website. A 325 mile range was Plaintiff’s main reason for purchasing a Tesla
instead of other EV vehicles. However, since purchasing, Plaintiff has not gotten
any more than 250 miles on a full charge, which is about 75 miles (or roughly 23%)
less than advertised. When Plaintiff complained to Tesla about the low mileage in
or around July 2023, Tesla representatives told him that it would eventually get
better. However, the range has not improved over time.
Page COMPLAINTPage 3 4.
As a result of Tesla’s business practices described herein, Plaintiff has
suffered an ascertainable loss of time and money due to purchase of a vehicle based
on Tesla’s misleading and deceptive marketing of its vehicles’ mileage in that he
would not have purchased this vehicle or would have paid less for it, had Tesla not
acted as alleged herein. Accordingly, Plaintiff has standing to seek public injunctive
relief.
5.
The reduced range of the vehicle has impacted Plaintiff’s cost of
operating the vehicle in various ways. Plaintiff has had to charge the vehicle more
frequently, leading to increased electricity costs over time. With its reduced range,
Plaintiff’s vehicle has depreciated and will continue to depreciate in value faster
than those that maintain a longer range. The vehicle’s reduced range has also caused
“range anxiety,” where Plaintiff is constantly concerned about running out of
battery before reaching his destination. This has caused him to take longer routes to
ensure he passes by charging stations or avoids certain trips altogether. These longer
routes have caused increased monetary costs.
JURISDICTION AND VENUE
6.
This action is brought by Plaintiff individually, as a consumer in
California. The value of injunctive relief sought by Plaintiff exceeds the minimal
jurisdiction limits of the Superior Court and will be established according to proof
at trial.
7.
Tesla, through its business of distributing, selling, and leasing the Tesla
Vehicles, has established sufficient contacts in this district such that personal
jurisdiction is appropriate. Tesla is deemed to reside in this district pursuant to
U.S.C. § 1391(a).
8.
This Court has personal jurisdiction over Tesla because it has
consented to jurisdiction by registering to conduct business in the state; maintains
sufficient minimum contacts in California; and otherwise intentionally avails itself
of the markets within California through promotion, sale, marketing and distribution
Page COMPLAINTPage 4
of its vehicles, which renders the exercise of jurisdiction by this Court proper and
necessary.
9.
Venue is proper in this District pursuant to 28 U.S.C. § 1391(a)-(c). A
substantial part of the events or omissions giving rise to the claims occurred in this
District.
PARTIES
10.
Plaintiff Raymond Flores is a California citizen who resides in
Bakersfield, California in Kern County, California. On or around June 29, 2023,
Plaintiff purchased his 2023 Tesla Model Y online from Tesla’s website and picked
up the vehicle from Tesla’s location in Fresno, California, located at 2988 North
Burl Avenue, Fresno, CA 93727 on or around June 30, 2023.
11.
Tesla Motors, Inc. was and is, upon information and belief, a
corporation organized and in existence under the laws of the State of Delaware and
conducts business in the State of California.
12.
At all relevant times, Tesla was and is engaged in the business of
designing, manufacturing, marketing, distributing, selling, leasing, and
warrantying Tesla-branded vehicles in California, and throughout the United
States of America.
FACTUAL ALLEGATIONS
13.
Tesla designs and manufactures electric vehicles that are advertised
and sold to the general public, including millions of consumers in California and
nationwide.
14.
On July 27, 2023, Reuters published a Special Report entitled “Tesla
Created Secret Team to Suppress Thousands of Driving Range Complaints” in
which it asserted that “Tesla years ago began exaggerating its vehicles’ potential
driving distance – by rigging their range-estimating software. The company decided
about a decade ago, for marketing purposes, to write algorithms for its range meter
that would show drivers ‘rosy’ projections for the distance it could travel on a full
Page COMPLAINTPage 5
battery, according to a person familiar with an early design of the software for its
in-dash readouts. Then, when the battery fell below 50% of its maximum charge,
the algorithm would show drivers more realistic projections for their remaining
driving range, this person said. To prevent drivers from getting stranded as their
predicted range started declining more quickly, Tesla vehicles were designed with
a “safety buffer,” allowing about 15 miles (24 km) of additional range even after
the dash readout showed an empty battery, the source said.”
15.
According to Reuters, the directive to present the optimistic range
estimates came from Tesla Chief Executive Officer Elon Musk, this person said.
“Elon wanted to show good range numbers when fully charged,” the person said,
adding: “When you buy a car off the lot seeing 350-mile, 400-mile range, it makes
you feel good.”
16.
The Reuters Special Report states that, according to Reuters’
interviews with three automotive experts who have tested or studied the Tesla’s
vehicles, the Tesla Vehicles often fail to achieve their advertised range estimates
and the projections provided by the cars’ own equipment.
17.
Tesla Vehicles provide range estimates in real-time. The intention is to
provide the driver with contemporaneous updates on the electric vehicle battery’s
performance, which directly correlate to the range the vehicle can be driven.
Generally, accurate range estimates help to ensure that, as the battery drains, the
driver knows to pull over at a charging station before the battery drains completely,
leaving the driver and occupants stranded. Inaccurate range estimates can, indeed,
lead a driver to being stranded, as the battery drains completely—and unexpectedly,
based upon inaccurate range information.
Reuters, “Tesla created secret team to suppress thousands of driving range complaints”
available at: https://www.reuters.com/investigates/special-report/tesla-batteries-range/ (last
accessed, Nov. 13, 2023).
Id.
Id.
Page COMPLAINTPage 6
18.
Tesla vehicles provide range estimates in two ways. First, through a
meter on the screen that is always displayed. This meter can be toggled to indicate
either the electric vehicle battery percentage remaining or the range (measured in
miles or kilometers) remaining. Second, through the vehicle’s navigation system,
which estimates the range (indicated in battery percentage) remaining, as compared
to the set destination. However, if no destination is inputted into the navigation
system, the vehicle will not indicate a range estimate through this second method.
19.
Following purchase, each Tesla Vehicle sets a suggested charge
limit—that is, an upper limit to stop charging the battery. For example, if an 80%
limit is set, the battery will continue to charge until it reaches 80% capacity, then
will stop charging. This effectively ensures that the battery cannot be fully charged
to 100%. A consumer can manually override the charge limit. However, Tesla
recommends that consumers not exceed the suggested charge limit. Tesla
specifically suggests that consumers “[c]harge the battery to the appropriate charge
limit for your vehicle based on the installed battery.” 4 Tesla suggests that Tesla
owners should charge their vehicle to full 100% capacity only sparingly.
20.
Setting charge limits directly impacts total range. Tesla’s advertised
total range of its vehicles are based on a full charge. However, because Tesla
discourages owners from ever charging their vehicles to 100%, it is increasingly
difficult—if not impossible—to ever reach that advertised range. For example,
setting the vehicle’s charge limit at 80% can reduce the total range by hundreds of
miles, compared to the advertised range. Based upon Tesla’s suggested charge
limits, Tesla vehicles cannot reach the total ranges Tesla advertises. Notably, while
Tesla openly advertises its total range estimates (which already are exaggerated) to
consumers at the point of purchase, it does not indicate to consumers that they can
expect to limit the vehicle’s total range by setting charge limits.
Tesla, “Range Tips” available at:
https://www.tesla.com/support/range#:~:text=Charge%20the%20battery%20to%20the,app%0and%20drag%20the%20slider. (last accessed, Nov. 13, 2023).
Page COMPLAINTPage 7
21.
Moreover, Tesla exaggerates its Vehicles’ range. Electric cars can lose
driving range for a lot of the same reasons as gasoline cars, but to a greater degree.
The cold is a particular drag on EVs, slowing the chemical and physical reactions
inside their batteries and requiring a heating system to protect them. 6 Reuters
reported that data collected in 2022 and 2023 from more than 8,000 Tesla Vehicles
by Recurrent, a Seattle-based EV analytics company, showed that the vehicles’
dashboard range meters did not change their estimates to reflect hot or cold outside
temperatures, which can greatly reduce range. 7 Recurrent found that Tesla’s four
models almost always calculated that they could travel more than 90% of their
advertised EPA range estimates regardless of external temperatures. 22.
Indeed, in 2023, the Korea Fair Trade Commission (“KFTC”) cited
Tesla for false advertising for this omission. 9 The KFTC found that Tesla failed to
tell customers that cold weather can drastically reduce its cars’ range. 10 It cited tests
by the country’s environment ministry that showed Tesla cars lost up to 50.5% of
the company’s claimed ranges in cold weather. 11 The KFTC also flagged certain
statements on Tesla’s website, including one that claimed about a particular model:
“You can drive 528 km (328 miles) or longer on a single charge.” 12 Regulators
required Tesla to remove the “or longer” phrase and publicly admit it had misled
consumers. 13 Musk and two local executives did so in a June 19 statement,
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Page COMPLAINTPage 8
acknowledging “false/exaggerated advertising.” 14 South Korean regulators also
fined Tesla about $2.1 million for falsely advertised driving ranges on its local
website between August 2019 and December 2022.
23.
Like their gas-powered counterparts, new electric vehicles are required
by U.S. federal law to display a label with fuel-efficiency information. 16 In the case
of EVs, this is stated in miles-per-gallon equivalent (MPGe), allowing consumers
to compare them to gasoline or diesel vehicles. 17 The labels also include estimates
of total range: how far an EV can travel on a full charge, in combined city and
highway driving.
24.
EV makers have a choice in how to calculate a model’s range. 19 They
can use a standard EPA formula that converts fuel-economy results from city and
highway driving tests to calculate a total range figure. 20 Or, automakers can conduct
additional tests to come up with their own range estimate. 21 The only reason to
conduct more tests is to generate a more favorable estimate, said Gregory Pannone,
a retired auto-industry veteran cited by Reuters. 22 Pannone coauthored a study of
21 different brands of electric vehicles, published in April 2023 by SAE
International, an engineering organization. 23 The research found that, on average,
the cars fell short of their advertised ranges by 12.5% in highway driving. 24 Pannone
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Page COMPLAINTPage 9
told Reuters that three Tesla models posted the worst performance, falling short of
their advertised ranges by an average of 26%. 25.
Tesla does not use EPA’s standardized formula for any of its Vehicles.
Instead, Tesla conducts its own additional range tests on all of its models, resulting
in inflated estimates compared to the ranges drivers actually experience. 26.
By contrast, many other automakers, including Ford, Mercedes and
Porsche, continue to rely on the EPA’s standardized formula to calculate potential
range, according to agency data for 2023 models. 27 Doing so ensures that the
potential range advertised to consumers reflects more conservative estimates based
on real-world driving conditions, Pannone said. 27.
Jonathan Elfalan, vehicle testing director for the automotive website
Edmunds.com, conducted an extensive examination of vehicles from Tesla and
other major automakers, including Ford, General Motors, Hyundai and Porsche.
All five Tesla models tested by Edmunds failed to achieve their advertised range,
the website reported in February 2021. 30 All but one of 10 other models from other
manufacturers exceeded their advertised range. 31 Tesla complained to Edmunds that
the test failed to account for the safety buffer programmed into Tesla’s in-dash range
meters. 32 So, Edmunds did further testing, this time running the vehicles, as Tesla
requested, past the point where their range meters indicated the batteries had run
out.
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Page COMPLAINTPage 10
28.
Only two of six Tesla vehicles tested matched their advertised range,
Edmunds reported in March 2021. 34 The tests found no fixed safety buffer.
Edmunds has continued to test electric vehicles, using its own standard method, to
see if they meet their advertised range estimates. 36 As of July, no Tesla vehicle had
met their own advertised range estimates, Elfalan said. 37 “They've gotten really
good at exploiting the rule book and maximizing certain points to work in their favor
involving EPA tests…[t]he practice can “misrepresent what their customers will
experience with their vehicles,” Elfalan told Reuters.
29.
Recurrent also tested other automakers’ in-dash range meters –
including the Ford Mustang Mach-E, the Chevrolet Bolt and the Hyundai Kona –
and found them to be more accurate. 39 The Kona’s range meter generally
underestimated the distance the car could travel, the tests showed. 40 Recurrent
conducted the study with the help of a National Science Foundation grant. 41 Tesla,
Case said, has consistently designed the range meters in its cars to deliver aggressive
rather than conservative estimates: “That’s where Tesla has taken a different path
from most other automakers.”
30.
To address an overwhelming number of customer complaints
regarding driving range and requests for service appointments to address the issue,
in the summer of 2022, Tesla created a “Diversion Team” in Las Vegas to handle
only range cases, according to the people familiar with the matter, as cited by
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Page COMPLAINTPage 11
Reuters. 43 Diversion Team employees were instructed to thwart any customers
complaining about poor driving range from bringing their vehicles in for service
and to cancel as many range-related appointments as possible.
31.
Advisers would normally run remote diagnostics on customers’ cars
and try to call them, the people said. 45 They were trained to tell customers that the
EPA-approved range estimates were just a prediction, not an actual measurement,
and that batteries degrade over time, which can reduce range. 46 Advisors would
offer tips on extending range by changing driving habits. 47 If the remote diagnostics
found anything else wrong with the vehicle that was not related to driving range,
advisors were instructed not to tell the customer, one of the sources said. 48 Managers
told them to close the cases.
32.
Tesla also updated its phone app so that any customer who complained
about range could no longer book service appointments, one of the sources said.
Instead, they could request that someone from Tesla contact them. 51 It often took
several days before owners were contacted because of the large backlog of range
complaints, the source said.
33.
The app update also routed all U.S. range complaints to the Nevada
diversion team, which started in Las Vegas and later moved to the nearby suburb of
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Page COMPLAINTPage 12
Henderson. 53 The team was soon fielding up to 2,000 cases a week, which
sometimes included multiple complaints from customers frustrated they couldn't
book a service appointment, one of the people said.
34.
The team was expected to close about 750 cases a week. 55 To
accomplish that, office supervisors told advisers to call a customer once and, if there
was no answer, to close the case as unresponsive, the source said. 56 When customers
did respond, advisers were told to try to complete the call in no more than five
minutes.
35.
In late 2022, managers aiming to quickly close cases told advisors to
stop running remote diagnostic tests on the vehicles of owners who had reported
range problems, according to one of the people familiar with the diversion team’s
operations. 58 “Thousands of customers were told there is nothing wrong with their
car” by advisors who had never run diagnostics, the person said. 59 Reuters could not
establish how long the practice continued.
36.
Tesla recently stopped using its diversion team in Nevada to handle
range-related complaints, according to the person familiar with the matter. 61 Virtual
service advisors in an office in Utah are now handling range cases, the person said.
Reuters could not determine why the change was made.
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Page COMPLAINTPage 13
37.
Tesla was aware that its advertised electric vehicle ranges for the Tesla
Vehicles were exaggerated and exceeded the actual range of the vehicle when
driven in real-world driving conditions. Tesla, which employs its own proprietary
method for calculating the range of its electric vehicles, was aware that this method
of calculation produced aggressive and exaggerated range estimates. Further, Tesla
was aware that various driving and environmental factors negatively impacted the
electric vehicle’s range and that these factors were likely to occur in real-world
driving conditions.
38.
Nevertheless, despite knowing this, Tesla did not inform consumers of
this information when advertising their electric vehicle range estimates. For
example, Tesla could have warned potential purchasers that cold weather would
drastically lower the electric vehicle’s range, but Tesla did not issue such a warning,
instead only advertising an exaggerated range estimate.
39.
Tesla also was aware that its advertised range estimates were based on
driving the electric vehicle with a full 100% charge of the electric vehicle battery.
However, because Tesla suggests to customers that they establish a charge limit on
their vehicles well-below full capacity, Tesla was aware that, in reality, customers
would be unable to ever actually experience the full advertised range. Tesla should
have warned potential purchasers that the ranges of the Tesla Vehicles could be
negatively impacted by various driving and environmental factors that were likely
to exist; but Tesla did not.
40.
Tesla should have warned potential purchasers that the ranges of the
Tesla Vehicles were estimated based on full 100% battery charge, but that Tesla
suggested that its model vehicles not be charged to full 100% battery charge on a
regular basis.
41.
Tesla should have warned potential purchasers that the ranges of the
Tesla Vehicles were not estimated based on EPA standardized formulae—despite
Tesla advertising the range estimates as “EPA estimates”—but instead based on
Page COMPLAINTPage 14
Tesla’s own proprietary method and algorithms for calculating range, which
allowed for a more aggressive estimate of total electric vehicle range.
42.
Tesla’s conduct in falsely advertising its estimated vehicle ranges
harmed Plaintiff at the point of sale and continues to harm members of the general
public.
FIRST CAUSE OF ACTION
Violation of California Civil Code § 1750, et seq.
(California Consumer Legal Remedies Act—Injunctive Relief Only)
43.
Plaintiff incorporates by reference the allegations contained in the
preceding paragraphs of this Complaint.
44.
Plaintiff brings this cause of action on behalf of himself and the general
California public.
45.
Tesla is a “person” as defined by California Civil Code § 1761(c).
46.
Plaintiff is a “consumer” within the meaning of California Civil Code
§ 1761(d) because he purchased his Tesla Vehicle primarily for personal, family, or
household use.
47.
The Consumers Legal Remedies Act (“CLRA”) prohibits “unfair or
deceptive acts or practices undertaken by any person in a transaction intended to
result or which results in the sale or lease of goods or services to any consumer[.]”
Cal. Civ. Code § 1770(a).
48.
By misrepresenting the actual driving range for the Tesla Vehicles to
Plaintiff and the general public, Tesla violated California Civil Code § 1770(a), as
it represented that the Tesla Vehicles had characteristics and benefits that they do
not have, represented that the Tesla Vehicles and their driving rage were of a
particular standard, quality, or grade when they were actually of another, and
advertised goods or services with the intent not to sell them as advertised. See Cal.
Civ. Code §§ 1770(a)(5) (7) & (9).
Page COMPLAINTPage 15
49.
Tesla’s unfair and deceptive acts or practices occurred repeatedly in
Tesla’s trade or business, and were capable of deceiving a substantial portion of the
purchasing public.
50.
Tesla knew that the Tesla Vehicles were incapable of reaching the
actual advertised and represented range.
51.
As a result of their reliance on Tesla’s misrepresentations and
omissions, owners and/or lessees of the Tesla Vehicles, including Plaintiff, suffered
an ascertainable loss of money, property, and/or value of their Tesla Vehicles.
52.
Tesla was under a duty to Plaintiff and the general public to disclose
the actual driving range of the Tesla Vehicles because:
a. Tesla was in a superior position to know the true state of facts
about the Tesla Vehicles’ driving range;
b. Plaintiff and the general public could not reasonably have been
expected to learn or discover that their vehicles could never reach
the advertised and represented range; and
c. Tesla knew that Plaintiff and the general public could not
reasonably have been expected to learn of or discover Tesla’s
misrepresentations until after purchasing their Tesla Vehicles.
53.
In misrepresenting the range of the Tesla Vehicles, Tesla knowingly
and intentionally misrepresented and concealed material facts and breached its duty
not to do so.
54.
The facts Tesla misrepresented, concealed from, or failed to disclose
to Plaintiff and the general public are material in that a reasonable consumer would
have considered them to be important in deciding whether to purchase or lease the
Tesla Vehicles or pay less. Had Plaintiff known that the Tesla Vehicles’ were
incapable of reaching the represented and advertised range, he would not have
purchased or leased the Tesla Vehicle or would have paid less for it.
Page COMPLAINTPage 16
55.
Plaintiff is a reasonable consumer who does not expect the Tesla
Vehicle to fail to reach the represented and advertised range. This is the reasonable
and objective consumer expectation relating to a Tesla Vehicle’s advertised range.
56.
Plaintiff is therefore entitled to, and does, seek injunctive relief
pursuant to California Civil Code section 1780(a)(2) to “enjoin the methods, acts or
practices” that violate section 1770. Specifically, Plaintiff seeks public injunctive
relief enjoining Tesla’s unfair or deceptive acts or practices to prevent future injury
to the general public. In addition, Plaintiff seeks an award of attorneys’ fees and
costs under California Civil Code section 1780(e), and orders granting all similar
relief available.
SECOND CAUSE OF ACTION
(Violation of California Business & Professions Code §§ 17500, et seq.)
(False Advertising Law – Injunctive Relief Only)
57.
Plaintiff incorporates by reference the allegations contained in each
and every paragraph of this Complaint.
58.
Tesla is a “person” as defined by California Business & Professions
Code sections 17201, as it is a corporation, firm, partnership, joint stock company,
and/or association.
59.
Tesla has violated, and continues to violate, Section 17500 of the
California Business and Professions Code by failing to disclose and disseminating
untrue and misleading advertising to Plaintiff and the other members of the general
public.
60.
Tesla has disseminated and continues to disseminate untrue and
misleading advertising by knowingly and intentionally misleading Plaintiff and the
public about the true nature of the driving range of the Tesla Vehicles.
61.
Tesla disseminated such untrue and misleading advertisements with
the intent to induce Plaintiff and other members of the general public to purchase
its vehicles.
62.
Tesla knew, or by the exercise of reasonable care should have known,
Page COMPLAINTPage 17
about the true nature of the vehicle range throughout the relevant period. Tesla
should have disclosed accurate and truthful information concerning the vehicle
range in its advertising and through its authorized dealerships.
63.
Accordingly, Tesla was well aware of the false and misleading nature
of its failure to disclose accurate and truthful information concerning the vehicle
range.
64.
Plaintiff reasonably relied on Tesla’s representations and/or omissions
made in connection with its vehicles. Plaintiff was induced to purchase a Tesla-
branded product based on the belief that the purchased vehicle would have the
driving range advertised by Tesla.
65.
Tesla’s representations and/or omissions made in connection with its
Vehicles were likely to deceive reasonable consumers by obfuscating the true nature
of the driving range.
66.
Had Plaintiff known that the vehicle would not have the driving range
as advertised, he would not have purchased his vehicle or would have paid less for
it.
67.
Plaintiff would consider purchasing or leasing similar Tesla vehicles
in the future if Plaintiff could rely on Tesla’s representations regarding the vehicles.
68.
As a direct and proximate result of Tesla’s untrue and misleading
advertising, Tesla has improperly acquired money from Plaintiff.
69.
Plaintiff brings this cause of action for public injunctive relief pursuant
to Section 17535 of the California Business and Professions Code. Tesla’s
violations of Section 17500 are ongoing because it continues to advertise and
engage in misrepresentations and failures to disclose to the public at large regarding
its vehicle range, thus increasing the safety risk to the general public. Unless
restrained by this Court, Tesla will continue to engage in untrue and misleading
advertising, representations, and failures to disclose, as alleged above, in violation
Page COMPLAINTPage 18
of Section 17500. Accordingly, Plaintiff seeks an injunction enjoining Tesla from
continuing to violate Section 17500.
THIRD CAUSE OF ACTION
(Violation of California Business & Professions Code §§ 17200, et seq.
(Unfair Business Practices- Injunctive Relief Only)
70.
Plaintiff incorporates by reference the allegations contained in each
and every paragraph of this Complaint.
71.
Tesla is a “person” as defined by California Business & Professions
Code sections 17201, as it is a corporation, firm, partnership, joint stock company,
and/or association.
72.
Tesla’s conduct, as alleged herein, has been, and continues to be,
unfair, and harmful to Plaintiff and to the general public. Plaintiff has suffered injury
in fact as a result of Tesla’s unfair business practices. Plaintiff seeks to enforce
important rights affecting the public interest within the meaning of Code of Civil
Procedure section 1021.5.
73.
Tesla’s activities, namely knowingly and intentionally misleading
Plaintiff and the public about the true nature of the range of the Tesla Vehicles, has
caused and will cause harm to Plaintiff and the general public. Tesla knew or
reasonably should have known about the true nature of the vehicle range throughout
the relevant period. Tesla should have disclosed accurate and truthful information
concerning the vehicle range in its advertising and through its authorized
dealerships. Tesla was in a superior position to know the true facts related to the
vehicle range, and Plaintiff and the general public could not reasonably be expected
to learn or discover the true facts related to the Tesla Vehicles’ range.
74.
Plaintiff brings this cause of action for public injunctive relief pursuant
to Section 17200, et seq., including Section 17203, of the California Business and
Professions Code. Tesla’s violations of Section 17200 are ongoing because it
continues to advertise and engage in misrepresentations and failures to disclose to
the public at large regarding its vehicle range, thus increasing the safety risk to the
Page COMPLAINTPage 19
general public. Unless restrained by this Court, Tesla will continue to engage in
untrue and misleading advertising, representations, and failures to disclose, as
alleged above, in violation of Section 17200. Accordingly, Plaintiff seeks an
injunction enjoining Tesla from continuing to violate Section 17200.
FOURTH CAUSE OF ACTION
Violation of California Business & Professions Code §§ 17200, et seq.
(Unlawful Business Practices - Injunctive Relief Only)
75.
and every paragraph of this Complaint.
76.
and/or association.
77.
injury in fact as a result of Tesla’s unlawful business practices. Plaintiff seeks to
enforce important rights affecting the public interest within the meaning of Code of
Civil Procedure section 1021.5.
78.
Tesla’s activities, namely knowingly and intentionally misleading
Plaintiff and the public about the true nature of the range of the Tesla Vehicles, have
caused and will cause harm to Plaintiff and the purchasing general public.
Tesla’s conduct, as alleged herein, has been, and continues to be,
unlawful, and harmful to Plaintiff and to the general public. Plaintiff has suffered
Tesla is a “person” as defined by California Business & Professions
Code section 17201, as it is a corporation, firm, partnership, joint stock company,
Plaintiff incorporates by reference the allegations contained in each
79.
As stated, Tesla’s failures are a violation of Cal. Civ. Code
§§1770(a)(5), (7), & (9). Thus, Tesla’s violations constitute an unlawful business
practice in violation of California Business & Professions Code sections 17200, et
seq.
80.
Plaintiff brings this cause of action for public injunctive relief pursuant
to Section 17200, et seq., including Section 17203, of the California Business and
Professions Code. Tesla’s violations of Section 17200 are ongoing because it
continues to advertise and engage in misrepresentations and failures to disclose to
the public at large, thus increasing the safety risk to the general public. Unless
Page COMPLAINTPage 20
restrained by this Court, Tesla will continue to engage in untrue and misleading
advertising, representations, and failures to disclose, as alleged above, in violation
of Section 17200. Accordingly, Plaintiff seeks an injunction enjoining Tesla from
continuing to violate Section 17200.
PRAYER FOR RELIEF
81.
Plaintiff requests the Court to enter judgment against Tesla, as follows:
a. An order enjoining Tesla from continuing to violate California’s
Consumer Legal Remedies Act and Unfair Competition Law as
described herein;
b. An order granting injunctive and declaratory relief to remedy
Tesla’s violations of California law, including but not limited to an
order declaring the parties’ respective legal rights and obligations
and enjoining Tesla from continuing their unlawful and unfair
business practices;
c. An award of attorneys’ fees and costs, as permitted by law;
d. An award of attorneys’ fees and costs pursuant to California Code
of Civil Procedure section 1021.5; and
e. Leave to amend the Complaint to conform to the evidence
produced at trial.
DEMAND FOR JURY TRIAL
Plaintiff hereby demands a trial by jury of any and all issues in this action so
triable.
Page COMPLAINTPage 21
Dated: December 18,
Respectfully submitted,
Capstone Law APC
By: /s/ Tarek H. Zohdy
Tarek H. Zohdy
Cody R. Padgett
Laura H. Goolsby
Attorneys for Plaintiff Raymond Flores
Page COMPLAINT
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PlainSite Cover Page
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1
6
Tarek H. Zohdy (SBN 247775)
Tarek.Zohdy@capstonelawyers.com
Cody R. Padgett (SBN 275553)
Cody.Padgett@capstonelawyers.com
Laura E. Goolsby (SBN 321721)
Laura.Goolsby@capstonelawyers.com
Capstone Law APC
1875 Century Park East, Suite 1000
Los Angeles, California 90067
Telephone: (310) 556-4811
Facsimile: (310) 943-0396
7
Attorneys for Plaintiff Raymond Flores
2
3
4
5
8
9
UNITED STATES DISTRICT COURT
10
EASTERN DISTRICT OF CALIFORNIA
11
12
RAYMOND FLORES,
Plaintiff,
13
14
15
16
17
v.
Case No.:
COMPLAINT FOR:
(1)
Violations of California Civil Code,
§§ 1750 et seq. (California
Consumer Legal Remedies Act —
Injunctive Relief Only);
(2)
Violations of California Unfair
Competition Law, §§ 17500 et seq.
(False Advertising Law —
Injunctive Relief Only);
(3)
Violations of California Business &
Professions Code §§ 17200 et seq.
(Unfair Business Practices –
Injunctive Relief Only);
(4)
Violations of California Business &
Professions Code, §§ 17200 et seq.
(Unlawful Business Practices–
Injunctive Relief Only);
TESLA, INC., d/b/a TESLA
MOTORS, INC., a Delaware
Corporation,
Defendant.
18
19
20
21
22
23
24
DEMAND FOR JURY TRIAL
25
26
27
28
COMPLAINT
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INTRODUCTION
1
2
1.
This case arises out of Tesla Inc. d/b/a Tesla Motors, Inc.’s
3
(“Defendant” or “Tesla”) unfair and deceptive marketing of its electric vehicles’
4
mileage range. Specifically, Plaintiff seeks to compel Tesla to disclose to the public
5
that, with respect to Tesla Model 3, S, Y and X (collectively the “Tesla Vehicles”):
6
(1) Tesla’s advertised total mileage range for the Tesla Vehicles is based on
7
charging the Vehicle to 100%, but Tesla discourages charging its vehicles to 100%;
8
therefore, Tesla’s advertised mileage range for the Tesla Vehicles is misleading; (2)
9
the range of the Tesla Vehicles can drop by up to 50% in cold weather, compared
10
to advertised ranges; and (3) that the ranges of the Tesla Vehicles were not estimated
11
based on U.S. Environmental Protection Agency (“EPA”) standardized formulae—
12
despite Tesla advertising the range estimates as “EPA estimates”—but instead
13
based on Tesla’s own proprietary software method and algorithms for calculating
14
range, which allowed for a more aggressive estimate of total electric vehicle range.
15
2.
Tesla advertises its vehicles to the general purchasing public, and the
16
public is harmed because Tesla advertises exaggerated driving ranges of its electric
17
vehicles.
18
3.
In or around June 2023, Plaintiff Raymond Flores (“Plaintiff”)
19
purchased a new 2023 Tesla Model Y vehicle designed, manufactured, marketed,
20
distributed, sold, and warranted by Tesla. Tesla representatives had told him to
21
expect a mileage range of 325 miles, which is also the number advertised on Tesla’s
22
website. A 325 mile range was Plaintiff’s main reason for purchasing a Tesla
23
instead of other EV vehicles. However, since purchasing, Plaintiff has not gotten
24
any more than 250 miles on a full charge, which is about 75 miles (or roughly 23%)
25
less than advertised. When Plaintiff complained to Tesla about the low mileage in
26
or around July 2023, Tesla representatives told him that it would eventually get
27
better. However, the range has not improved over time.
28
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4.
1
As a result of Tesla’s business practices described herein, Plaintiff has
2
suffered an ascertainable loss of time and money due to purchase of a vehicle based
3
on Tesla’s misleading and deceptive marketing of its vehicles’ mileage in that he
4
would not have purchased this vehicle or would have paid less for it, had Tesla not
5
acted as alleged herein. Accordingly, Plaintiff has standing to seek public injunctive
6
relief.
7
5.
The reduced range of the vehicle has impacted Plaintiff’s cost of
8
operating the vehicle in various ways. Plaintiff has had to charge the vehicle more
9
frequently, leading to increased electricity costs over time. With its reduced range,
10
Plaintiff’s vehicle has depreciated and will continue to depreciate in value faster
11
than those that maintain a longer range. The vehicle’s reduced range has also caused
12
“range anxiety,” where Plaintiff is constantly concerned about running out of
13
battery before reaching his destination. This has caused him to take longer routes to
14
ensure he passes by charging stations or avoids certain trips altogether. These longer
15
routes have caused increased monetary costs.
JURISDICTION AND VENUE
16
17
6.
This action is brought by Plaintiff individually, as a consumer in
18
California. The value of injunctive relief sought by Plaintiff exceeds the minimal
19
jurisdiction limits of the Superior Court and will be established according to proof
20
at trial.
21
7.
Tesla, through its business of distributing, selling, and leasing the Tesla
22
Vehicles, has established sufficient contacts in this district such that personal
23
jurisdiction is appropriate. Tesla is deemed to reside in this district pursuant to 28
24
U.S.C. § 1391(a).
25
8.
This Court has personal jurisdiction over Tesla because it has
26
consented to jurisdiction by registering to conduct business in the state; maintains
27
sufficient minimum contacts in California; and otherwise intentionally avails itself
28
of the markets within California through promotion, sale, marketing and distribution
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1
of its vehicles, which renders the exercise of jurisdiction by this Court proper and
2
necessary.
3
9.
Venue is proper in this District pursuant to 28 U.S.C. § 1391(a)-(c). A
4
substantial part of the events or omissions giving rise to the claims occurred in this
5
District.
PARTIES
6
7
10.
Plaintiff Raymond Flores is a California citizen who resides in
8
Bakersfield, California in Kern County, California. On or around June 29, 2023,
9
Plaintiff purchased his 2023 Tesla Model Y online from Tesla’s website and picked
10
up the vehicle from Tesla’s location in Fresno, California, located at 2988 North
11
Burl Avenue, Fresno, CA 93727 on or around June 30, 2023.
12
11.
Tesla Motors, Inc. was and is, upon information and belief, a
13
corporation organized and in existence under the laws of the State of Delaware and
14
conducts business in the State of California.
15
12.
At all relevant times, Tesla was and is engaged in the business of
16
designing, manufacturing, marketing, distributing, selling, leasing, and
17
warrantying Tesla-branded vehicles in California, and throughout the United
18
States of America.
FACTUAL ALLEGATIONS
19
20
13.
Tesla designs and manufactures electric vehicles that are advertised
21
and sold to the general public, including millions of consumers in California and
22
nationwide.
23
14.
On July 27, 2023, Reuters published a Special Report entitled “Tesla
24
Created Secret Team to Suppress Thousands of Driving Range Complaints” in
25
which it asserted that “Tesla years ago began exaggerating its vehicles’ potential
26
driving distance – by rigging their range-estimating software. The company decided
27
about a decade ago, for marketing purposes, to write algorithms for its range meter
28
that would show drivers ‘rosy’ projections for the distance it could travel on a full
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1
battery, according to a person familiar with an early design of the software for its
2
in-dash readouts. Then, when the battery fell below 50% of its maximum charge,
3
the algorithm would show drivers more realistic projections for their remaining
4
driving range, this person said. To prevent drivers from getting stranded as their
5
predicted range started declining more quickly, Tesla vehicles were designed with
6
a “safety buffer,” allowing about 15 miles (24 km) of additional range even after
7
the dash readout showed an empty battery, the source said.” 1
8
15.
According to Reuters, the directive to present the optimistic range
9
estimates came from Tesla Chief Executive Officer Elon Musk, this person said.
10
“Elon wanted to show good range numbers when fully charged,” the person said,
11
adding: “When you buy a car off the lot seeing 350-mile, 400-mile range, it makes
12
you feel good.” 2
13
16.
The Reuters Special Report states that, according to Reuters’
14
interviews with three automotive experts who have tested or studied the Tesla’s
15
vehicles, the Tesla Vehicles often fail to achieve their advertised range estimates
16
and the projections provided by the cars’ own equipment. 3
17
17.
Tesla Vehicles provide range estimates in real-time. The intention is to
18
provide the driver with contemporaneous updates on the electric vehicle battery’s
19
performance, which directly correlate to the range the vehicle can be driven.
20
Generally, accurate range estimates help to ensure that, as the battery drains, the
21
driver knows to pull over at a charging station before the battery drains completely,
22
leaving the driver and occupants stranded. Inaccurate range estimates can, indeed,
23
lead a driver to being stranded, as the battery drains completely—and unexpectedly,
24
based upon inaccurate range information.
25
1
26
27
28
Reuters, “Tesla created secret team to suppress thousands of driving range complaints”
available at: https://www.reuters.com/investigates/special-report/tesla-batteries-range/ (last
accessed, Nov. 13, 2023).
2
Id.
3
Id.
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1
18.
Tesla vehicles provide range estimates in two ways. First, through a
2
meter on the screen that is always displayed. This meter can be toggled to indicate
3
either the electric vehicle battery percentage remaining or the range (measured in
4
miles or kilometers) remaining. Second, through the vehicle’s navigation system,
5
which estimates the range (indicated in battery percentage) remaining, as compared
6
to the set destination. However, if no destination is inputted into the navigation
7
system, the vehicle will not indicate a range estimate through this second method.
8
19.
Following purchase, each Tesla Vehicle sets a suggested charge
9
limit—that is, an upper limit to stop charging the battery. For example, if an 80%
10
limit is set, the battery will continue to charge until it reaches 80% capacity, then
11
will stop charging. This effectively ensures that the battery cannot be fully charged
12
to 100%. A consumer can manually override the charge limit. However, Tesla
13
recommends that consumers not exceed the suggested charge limit. Tesla
14
specifically suggests that consumers “[c]harge the battery to the appropriate charge
15
limit for your vehicle based on the installed battery.” 4 Tesla suggests that Tesla
16
owners should charge their vehicle to full 100% capacity only sparingly.
17
20.
Setting charge limits directly impacts total range. Tesla’s advertised
18
total range of its vehicles are based on a full charge. However, because Tesla
19
discourages owners from ever charging their vehicles to 100%, it is increasingly
20
difficult—if not impossible—to ever reach that advertised range. For example,
21
setting the vehicle’s charge limit at 80% can reduce the total range by hundreds of
22
miles, compared to the advertised range. Based upon Tesla’s suggested charge
23
limits, Tesla vehicles cannot reach the total ranges Tesla advertises. Notably, while
24
Tesla openly advertises its total range estimates (which already are exaggerated) to
25
consumers at the point of purchase, it does not indicate to consumers that they can
26
expect to limit the vehicle’s total range by setting charge limits.
27
28
4
Tesla, “Range Tips” available at:
https://www.tesla.com/support/range#:~:text=Charge%20the%20battery%20to%20the,app%2
0and%20drag%20the%20slider. (last accessed, Nov. 13, 2023).
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1
21.
Moreover, Tesla exaggerates its Vehicles’ range. Electric cars can lose
2
driving range for a lot of the same reasons as gasoline cars, but to a greater degree. 5
3
The cold is a particular drag on EVs, slowing the chemical and physical reactions
4
inside their batteries and requiring a heating system to protect them. 6 Reuters
5
reported that data collected in 2022 and 2023 from more than 8,000 Tesla Vehicles
6
by Recurrent, a Seattle-based EV analytics company, showed that the vehicles’
7
dashboard range meters did not change their estimates to reflect hot or cold outside
8
temperatures, which can greatly reduce range. 7 Recurrent found that Tesla’s four
9
models almost always calculated that they could travel more than 90% of their
10
11
advertised EPA range estimates regardless of external temperatures. 8
22.
Indeed, in 2023, the Korea Fair Trade Commission (“KFTC”) cited
12
Tesla for false advertising for this omission. 9 The KFTC found that Tesla failed to
13
tell customers that cold weather can drastically reduce its cars’ range. 10 It cited tests
14
by the country’s environment ministry that showed Tesla cars lost up to 50.5% of
15
the company’s claimed ranges in cold weather. 11 The KFTC also flagged certain
16
statements on Tesla’s website, including one that claimed about a particular model:
17
“You can drive 528 km (328 miles) or longer on a single charge.” 12 Regulators
18
required Tesla to remove the “or longer” phrase and publicly admit it had misled
19
consumers. 13 Musk and two local executives did so in a June 19 statement,
20
21
5
See supra note 1.
6
See supra note 1.
7
See supra note 1.
24
8
See supra note 1.
25
9
See supra note 1.
26
10
See supra note 1.
11
See supra note 1.
12
See supra note 1.
13
See supra note 1.
22
23
27
28
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1
acknowledging “false/exaggerated advertising.” 14 South Korean regulators also
2
fined Tesla about $2.1 million for falsely advertised driving ranges on its local
3
website between August 2019 and December 2022. 15
4
23.
Like their gas-powered counterparts, new electric vehicles are required
5
by U.S. federal law to display a label with fuel-efficiency information. 16 In the case
6
of EVs, this is stated in miles-per-gallon equivalent (MPGe), allowing consumers
7
to compare them to gasoline or diesel vehicles. 17 The labels also include estimates
8
of total range: how far an EV can travel on a full charge, in combined city and
9
highway driving. 18
10
24.
EV makers have a choice in how to calculate a model’s range. 19 They
11
can use a standard EPA formula that converts fuel-economy results from city and
12
highway driving tests to calculate a total range figure. 20 Or, automakers can conduct
13
additional tests to come up with their own range estimate. 21 The only reason to
14
conduct more tests is to generate a more favorable estimate, said Gregory Pannone,
15
a retired auto-industry veteran cited by Reuters. 22 Pannone coauthored a study of
16
21 different brands of electric vehicles, published in April 2023 by SAE
17
International, an engineering organization. 23 The research found that, on average,
18
the cars fell short of their advertised ranges by 12.5% in highway driving. 24 Pannone
19
20
14
See supra note 1.
21
15
See supra note 1.
16
See supra note 1.
17
See supra note 1.
18
See supra note 1.
24
19
See supra note 1.
25
20
See supra note 1.
26
21
See supra note 1.
22
See supra note 1.
23
See supra note 1.
24
See supra note 1.
22
23
27
28
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1
told Reuters that three Tesla models posted the worst performance, falling short of
2
their advertised ranges by an average of 26%. 25
25.
3
Tesla does not use EPA’s standardized formula for any of its Vehicles.
4
Instead, Tesla conducts its own additional range tests on all of its models, resulting
5
in inflated estimates compared to the ranges drivers actually experience. 26
26.
6
By contrast, many other automakers, including Ford, Mercedes and
7
Porsche, continue to rely on the EPA’s standardized formula to calculate potential
8
range, according to agency data for 2023 models. 27 Doing so ensures that the
9
potential range advertised to consumers reflects more conservative estimates based
10
on real-world driving conditions, Pannone said. 28
27.
11
Jonathan Elfalan, vehicle testing director for the automotive website
12
Edmunds.com, conducted an extensive examination of vehicles from Tesla and
13
other major automakers, including Ford, General Motors, Hyundai and Porsche. 29
14
All five Tesla models tested by Edmunds failed to achieve their advertised range,
15
the website reported in February 2021. 30 All but one of 10 other models from other
16
manufacturers exceeded their advertised range. 31 Tesla complained to Edmunds that
17
the test failed to account for the safety buffer programmed into Tesla’s in-dash range
18
meters. 32 So, Edmunds did further testing, this time running the vehicles, as Tesla
19
requested, past the point where their range meters indicated the batteries had run
20
out. 33
21
25
See supra note 1.
26
See supra note 1.
27
See supra note 1.
24
28
See supra note 1.
25
29
See supra note 1.
26
30
See supra note 1.
31
See supra note 1.
32
See supra note 1.
33
See supra note 1.
22
23
27
28
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1
28.
Only two of six Tesla vehicles tested matched their advertised range,
2
Edmunds reported in March 2021. 34 The tests found no fixed safety buffer. 35
3
Edmunds has continued to test electric vehicles, using its own standard method, to
4
see if they meet their advertised range estimates. 36 As of July, no Tesla vehicle had
5
met their own advertised range estimates, Elfalan said. 37 “They've gotten really
6
good at exploiting the rule book and maximizing certain points to work in their favor
7
involving EPA tests…[t]he practice can “misrepresent what their customers will
8
experience with their vehicles,” Elfalan told Reuters. 38
9
29.
Recurrent also tested other automakers’ in-dash range meters –
10
including the Ford Mustang Mach-E, the Chevrolet Bolt and the Hyundai Kona –
11
and found them to be more accurate. 39 The Kona’s range meter generally
12
underestimated the distance the car could travel, the tests showed. 40 Recurrent
13
conducted the study with the help of a National Science Foundation grant. 41 Tesla,
14
Case said, has consistently designed the range meters in its cars to deliver aggressive
15
rather than conservative estimates: “That’s where Tesla has taken a different path
16
from most other automakers.” 42
17
30.
To address an overwhelming number of customer complaints
18
regarding driving range and requests for service appointments to address the issue,
19
in the summer of 2022, Tesla created a “Diversion Team” in Las Vegas to handle
20
only range cases, according to the people familiar with the matter, as cited by
21
34
See supra note 1.
35
See supra note 1.
36
See supra note 1.
24
37
See supra note 1.
25
38
See supra note 1.
26
39
See supra note 1.
40
See supra note 1.
41
See supra note 1.
42
See supra note 1.
22
23
27
28
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1
Reuters. 43 Diversion Team employees were instructed to thwart any customers
2
complaining about poor driving range from bringing their vehicles in for service
3
and to cancel as many range-related appointments as possible. 44
4
31.
Advisers would normally run remote diagnostics on customers’ cars
5
and try to call them, the people said. 45 They were trained to tell customers that the
6
EPA-approved range estimates were just a prediction, not an actual measurement,
7
and that batteries degrade over time, which can reduce range. 46 Advisors would
8
offer tips on extending range by changing driving habits. 47 If the remote diagnostics
9
found anything else wrong with the vehicle that was not related to driving range,
10
advisors were instructed not to tell the customer, one of the sources said. 48 Managers
11
told them to close the cases. 49
12
32.
Tesla also updated its phone app so that any customer who complained
13
about range could no longer book service appointments, one of the sources said. 50
14
Instead, they could request that someone from Tesla contact them. 51 It often took
15
several days before owners were contacted because of the large backlog of range
16
complaints, the source said. 52
17
18
33.
The app update also routed all U.S. range complaints to the Nevada
diversion team, which started in Las Vegas and later moved to the nearby suburb of
19
20
43
See supra note 1.
44
See supra note 1.
45
See supra note 1.
46
See supra note 1.
24
47
See supra note 1.
25
48
See supra note 1.
26
49
See supra note 1.
50
See supra note 1.
51
See supra note 1.
52
See supra note 1.
21
22
23
27
28
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1
Henderson. 53 The team was soon fielding up to 2,000 cases a week, which
2
sometimes included multiple complaints from customers frustrated they couldn't
3
book a service appointment, one of the people said. 54
4
34.
The team was expected to close about 750 cases a week. 55 To
5
accomplish that, office supervisors told advisers to call a customer once and, if there
6
was no answer, to close the case as unresponsive, the source said. 56 When customers
7
did respond, advisers were told to try to complete the call in no more than five
8
minutes. 57
9
35.
In late 2022, managers aiming to quickly close cases told advisors to
10
stop running remote diagnostic tests on the vehicles of owners who had reported
11
range problems, according to one of the people familiar with the diversion team’s
12
operations. 58 “Thousands of customers were told there is nothing wrong with their
13
car” by advisors who had never run diagnostics, the person said. 59 Reuters could not
14
establish how long the practice continued. 60
15
36.
Tesla recently stopped using its diversion team in Nevada to handle
16
range-related complaints, according to the person familiar with the matter. 61 Virtual
17
service advisors in an office in Utah are now handling range cases, the person said. 62
18
Reuters could not determine why the change was made. 63
19
20
53
See supra note 1.
21
54
See supra note 1.
55
See supra note 1.
56
See supra note 1.
57
See supra note 1.
24
58
See supra note 1.
25
59
See supra note 1.
26
60
See supra note 1.
61
See supra note 1.
62
See supra note 1.
63
See supra note 1.
22
23
27
28
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1
37.
Tesla was aware that its advertised electric vehicle ranges for the Tesla
2
Vehicles were exaggerated and exceeded the actual range of the vehicle when
3
driven in real-world driving conditions. Tesla, which employs its own proprietary
4
method for calculating the range of its electric vehicles, was aware that this method
5
of calculation produced aggressive and exaggerated range estimates. Further, Tesla
6
was aware that various driving and environmental factors negatively impacted the
7
electric vehicle’s range and that these factors were likely to occur in real-world
8
driving conditions.
9
38.
Nevertheless, despite knowing this, Tesla did not inform consumers of
10
this information when advertising their electric vehicle range estimates. For
11
example, Tesla could have warned potential purchasers that cold weather would
12
drastically lower the electric vehicle’s range, but Tesla did not issue such a warning,
13
instead only advertising an exaggerated range estimate.
14
39.
Tesla also was aware that its advertised range estimates were based on
15
driving the electric vehicle with a full 100% charge of the electric vehicle battery.
16
However, because Tesla suggests to customers that they establish a charge limit on
17
their vehicles well-below full capacity, Tesla was aware that, in reality, customers
18
would be unable to ever actually experience the full advertised range. Tesla should
19
have warned potential purchasers that the ranges of the Tesla Vehicles could be
20
negatively impacted by various driving and environmental factors that were likely
21
to exist; but Tesla did not.
22
40.
Tesla should have warned potential purchasers that the ranges of the
23
Tesla Vehicles were estimated based on full 100% battery charge, but that Tesla
24
suggested that its model vehicles not be charged to full 100% battery charge on a
25
regular basis.
26
41.
Tesla should have warned potential purchasers that the ranges of the
27
Tesla Vehicles were not estimated based on EPA standardized formulae—despite
28
Tesla advertising the range estimates as “EPA estimates”—but instead based on
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Tesla’s own proprietary method and algorithms for calculating range, which
2
allowed for a more aggressive estimate of total electric vehicle range.
3
42.
Tesla’s conduct in falsely advertising its estimated vehicle ranges
4
harmed Plaintiff at the point of sale and continues to harm members of the general
5
public.
6
7
8
9
10
11
FIRST CAUSE OF ACTION
Violation of California Civil Code § 1750, et seq.
(California Consumer Legal Remedies Act—Injunctive Relief Only)
43.
Plaintiff incorporates by reference the allegations contained in the
preceding paragraphs of this Complaint.
44.
Plaintiff brings this cause of action on behalf of himself and the general
California public.
12
45.
Tesla is a “person” as defined by California Civil Code § 1761(c).
13
46.
Plaintiff is a “consumer” within the meaning of California Civil Code
14
§ 1761(d) because he purchased his Tesla Vehicle primarily for personal, family, or
15
household use.
16
47.
The Consumers Legal Remedies Act (“CLRA”) prohibits “unfair or
17
deceptive acts or practices undertaken by any person in a transaction intended to
18
result or which results in the sale or lease of goods or services to any consumer[.]”
19
Cal. Civ. Code § 1770(a).
20
48.
By misrepresenting the actual driving range for the Tesla Vehicles to
21
Plaintiff and the general public, Tesla violated California Civil Code § 1770(a), as
22
it represented that the Tesla Vehicles had characteristics and benefits that they do
23
not have, represented that the Tesla Vehicles and their driving rage were of a
24
particular standard, quality, or grade when they were actually of another, and
25
advertised goods or services with the intent not to sell them as advertised. See Cal.
26
Civ. Code §§ 1770(a)(5) (7) & (9).
27
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49.
Tesla’s unfair and deceptive acts or practices occurred repeatedly in
2
Tesla’s trade or business, and were capable of deceiving a substantial portion of the
3
purchasing public.
4
5
6
50.
Tesla knew that the Tesla Vehicles were incapable of reaching the
actual advertised and represented range.
51.
As a result of their reliance on Tesla’s misrepresentations and
7
omissions, owners and/or lessees of the Tesla Vehicles, including Plaintiff, suffered
8
an ascertainable loss of money, property, and/or value of their Tesla Vehicles.
9
10
52.
Tesla was under a duty to Plaintiff and the general public to disclose
the actual driving range of the Tesla Vehicles because:
a. Tesla was in a superior position to know the true state of facts
11
about the Tesla Vehicles’ driving range;
12
13
b. Plaintiff and the general public could not reasonably have been
14
expected to learn or discover that their vehicles could never reach
15
the advertised and represented range; and
16
c. Tesla knew that Plaintiff and the general public could not
17
reasonably have been expected to learn of or discover Tesla’s
18
misrepresentations until after purchasing their Tesla Vehicles.
19
53.
In misrepresenting the range of the Tesla Vehicles, Tesla knowingly
20
and intentionally misrepresented and concealed material facts and breached its duty
21
not to do so.
22
54.
The facts Tesla misrepresented, concealed from, or failed to disclose
23
to Plaintiff and the general public are material in that a reasonable consumer would
24
have considered them to be important in deciding whether to purchase or lease the
25
Tesla Vehicles or pay less. Had Plaintiff known that the Tesla Vehicles’ were
26
incapable of reaching the represented and advertised range, he would not have
27
purchased or leased the Tesla Vehicle or would have paid less for it.
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55.
Plaintiff is a reasonable consumer who does not expect the Tesla
2
Vehicle to fail to reach the represented and advertised range. This is the reasonable
3
and objective consumer expectation relating to a Tesla Vehicle’s advertised range.
4
56.
Plaintiff is therefore entitled to, and does, seek injunctive relief
5
pursuant to California Civil Code section 1780(a)(2) to “enjoin the methods, acts or
6
practices” that violate section 1770. Specifically, Plaintiff seeks public injunctive
7
relief enjoining Tesla’s unfair or deceptive acts or practices to prevent future injury
8
to the general public. In addition, Plaintiff seeks an award of attorneys’ fees and
9
costs under California Civil Code section 1780(e), and orders granting all similar
10
11
12
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relief available.
SECOND CAUSE OF ACTION
(Violation of California Business & Professions Code §§ 17500, et seq.)
(False Advertising Law – Injunctive Relief Only)
57.
Plaintiff incorporates by reference the allegations contained in each
and every paragraph of this Complaint.
58.
Tesla is a “person” as defined by California Business & Professions
Code sections 17201, as it is a corporation, firm, partnership, joint stock company,
and/or association.
59.
Tesla has violated, and continues to violate, Section 17500 of the
California Business and Professions Code by failing to disclose and disseminating
untrue and misleading advertising to Plaintiff and the other members of the general
public.
60.
Tesla has disseminated and continues to disseminate untrue and
misleading advertising by knowingly and intentionally misleading Plaintiff and the
public about the true nature of the driving range of the Tesla Vehicles.
61.
Tesla disseminated such untrue and misleading advertisements with
the intent to induce Plaintiff and other members of the general public to purchase
its vehicles.
62.
Tesla knew, or by the exercise of reasonable care should have known,
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about the true nature of the vehicle range throughout the relevant period. Tesla
2
should have disclosed accurate and truthful information concerning the vehicle
3
range in its advertising and through its authorized dealerships.
63.
4
Accordingly, Tesla was well aware of the false and misleading nature
5
of its failure to disclose accurate and truthful information concerning the vehicle
6
range.
64.
7
Plaintiff reasonably relied on Tesla’s representations and/or omissions
8
made in connection with its vehicles. Plaintiff was induced to purchase a Tesla-
9
branded product based on the belief that the purchased vehicle would have the
10
driving range advertised by Tesla.
65.
11
Tesla’s representations and/or omissions made in connection with its
12
Vehicles were likely to deceive reasonable consumers by obfuscating the true nature
13
of the driving range.
66.
14
Had Plaintiff known that the vehicle would not have the driving range
15
as advertised, he would not have purchased his vehicle or would have paid less for
16
it.
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18
19
20
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67.
Plaintiff would consider purchasing or leasing similar Tesla vehicles
in the future if Plaintiff could rely on Tesla’s representations regarding the vehicles.
68.
As a direct and proximate result of Tesla’s untrue and misleading
advertising, Tesla has improperly acquired money from Plaintiff.
69.
Plaintiff brings this cause of action for public injunctive relief pursuant
22
to Section 17535 of the California Business and Professions Code. Tesla’s
23
violations of Section 17500 are ongoing because it continues to advertise and
24
engage in misrepresentations and failures to disclose to the public at large regarding
25
its vehicle range, thus increasing the safety risk to the general public. Unless
26
restrained by this Court, Tesla will continue to engage in untrue and misleading
27
advertising, representations, and failures to disclose, as alleged above, in violation
28
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of Section 17500. Accordingly, Plaintiff seeks an injunction enjoining Tesla from
2
continuing to violate Section 17500.
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4
5
6
7
8
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10
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12
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THIRD CAUSE OF ACTION
(Violation of California Business & Professions Code §§ 17200, et seq.
(Unfair Business Practices- Injunctive Relief Only)
70.
Plaintiff incorporates by reference the allegations contained in each
and every paragraph of this Complaint.
71.
Tesla is a “person” as defined by California Business & Professions
Code sections 17201, as it is a corporation, firm, partnership, joint stock company,
and/or association.
72.
Tesla’s conduct, as alleged herein, has been, and continues to be,
unfair, and harmful to Plaintiff and to the general public. Plaintiff has suffered injury
in fact as a result of Tesla’s unfair business practices. Plaintiff seeks to enforce
important rights affecting the public interest within the meaning of Code of Civil
Procedure section 1021.5.
73.
Tesla’s activities, namely knowingly and intentionally misleading
Plaintiff and the public about the true nature of the range of the Tesla Vehicles, has
caused and will cause harm to Plaintiff and the general public. Tesla knew or
reasonably should have known about the true nature of the vehicle range throughout
the relevant period. Tesla should have disclosed accurate and truthful information
concerning the vehicle range in its advertising and through its authorized
dealerships. Tesla was in a superior position to know the true facts related to the
vehicle range, and Plaintiff and the general public could not reasonably be expected
to learn or discover the true facts related to the Tesla Vehicles’ range.
74.
Plaintiff brings this cause of action for public injunctive relief pursuant
to Section 17200, et seq., including Section 17203, of the California Business and
Professions Code. Tesla’s violations of Section 17200 are ongoing because it
continues to advertise and engage in misrepresentations and failures to disclose to
the public at large regarding its vehicle range, thus increasing the safety risk to the
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general public. Unless restrained by this Court, Tesla will continue to engage in
2
untrue and misleading advertising, representations, and failures to disclose, as
3
alleged above, in violation of Section 17200. Accordingly, Plaintiff seeks an
4
injunction enjoining Tesla from continuing to violate Section 17200.
FOURTH CAUSE OF ACTION
Violation of California Business & Professions Code §§ 17200, et seq.
(Unlawful Business Practices - Injunctive Relief Only)
5
6
7
8
75.
and every paragraph of this Complaint.
9
10
11
76.
14
15
16
and/or association.
77.
19
injury in fact as a result of Tesla’s unlawful business practices. Plaintiff seeks to
enforce important rights affecting the public interest within the meaning of Code of
Civil Procedure section 1021.5.
78.
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23
24
25
26
27
28
Tesla’s activities, namely knowingly and intentionally misleading
Plaintiff and the public about the true nature of the range of the Tesla Vehicles, have
caused and will cause harm to Plaintiff and the purchasing general public.
20
21
Tesla’s conduct, as alleged herein, has been, and continues to be,
unlawful, and harmful to Plaintiff and to the general public. Plaintiff has suffered
17
18
Tesla is a “person” as defined by California Business & Professions
Code section 17201, as it is a corporation, firm, partnership, joint stock company,
12
13
Plaintiff incorporates by reference the allegations contained in each
79.
As stated, Tesla’s failures are a violation of Cal. Civ. Code
§§1770(a)(5), (7), & (9). Thus, Tesla’s violations constitute an unlawful business
practice in violation of California Business & Professions Code sections 17200, et
seq.
80.
Plaintiff brings this cause of action for public injunctive relief pursuant
to Section 17200, et seq., including Section 17203, of the California Business and
Professions Code. Tesla’s violations of Section 17200 are ongoing because it
continues to advertise and engage in misrepresentations and failures to disclose to
the public at large, thus increasing the safety risk to the general public. Unless
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1
restrained by this Court, Tesla will continue to engage in untrue and misleading
2
advertising, representations, and failures to disclose, as alleged above, in violation
3
of Section 17200. Accordingly, Plaintiff seeks an injunction enjoining Tesla from
4
continuing to violate Section 17200.
PRAYER FOR RELIEF
5
6
81.
Plaintiff requests the Court to enter judgment against Tesla, as follows:
7
a. An order enjoining Tesla from continuing to violate California’s
8
Consumer Legal Remedies Act and Unfair Competition Law as
9
described herein;
10
b. An order granting injunctive and declaratory relief to remedy
11
Tesla’s violations of California law, including but not limited to an
12
order declaring the parties’ respective legal rights and obligations
13
and enjoining Tesla from continuing their unlawful and unfair
14
business practices;
15
c. An award of attorneys’ fees and costs, as permitted by law;
16
d. An award of attorneys’ fees and costs pursuant to California Code
of Civil Procedure section 1021.5; and
17
e. Leave to amend the Complaint to conform to the evidence
18
produced at trial.
19
DEMAND FOR JURY TRIAL
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Plaintiff hereby demands a trial by jury of any and all issues in this action so
triable.
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2
Dated: December 18, 2023
Respectfully submitted,
Capstone Law APC
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By: /s/ Tarek H. Zohdy
Tarek H. Zohdy
Cody R. Padgett
Laura H. Goolsby
Attorneys for Plaintiff Raymond Flores
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