Page 1 BEFORE THE
DEPARTMENT OF MOTOR VEHICLES
STATE OF CALIFORNIA
In the Matter of the First Amended Accusation Against:
TESLA INC., dba TESLA MOTORS INC.,
A Vehicle Manufacturer, Respondent.
OAH No. 2023110194
Case No. 21-02188
License No. 63277
AIMS No. 21V1L12011
CONSOLIDATED WITH:
In the Matter of the First Amended Accusation Against:
TESLA INC., dba TESLA MOTORS INC.,
A Vehicle Dealer, Respondent.
OAH No. 2023110196
Case No. 21-02189
License No. 68106
AIMS No. 21V1L12011Page 2 ORDER DENYING MOTION TO DISMISS
These consolidated matters are set for hearing before Administrative Law Judge
Juliet E. Cox, State of California, Office of Administrative Hearings, on September 9
through 13, 2024. Deputy Attorney General Greg Call represents complainant Ailene
Short, Chief of the Industry Services Branch, Occupational Licensing Operations,
Operations Division, Department of Motor Vehicles. Attorneys Ariel A. Neuman, Miri
Gold, Oliver Rocos, Joel Kurtzberg, Miles Wiley, Lisa J. Cole, and Philip Golodetz
represent respondent Tesla Inc.
The First Amended Accusations allege, in brief, that the Department should
revoke or suspend respondent’s licenses to manufacture and sell motor vehicles in
California on the ground that respondent unlawfully has used false, misleading phrases
and feature names to market such vehicles. Respondent has moved for an order
dismissing the First Amended Accusations without an evidentiary hearing, and
recommending that the Department dismiss this matter rather than permitting
complainant to amend the accusations further. Complainant opposes this motion.
The parties provided thorough written argument for and against the motion.
Respondent also offered evidence to support the motion, in the form of a request
(which complainant also opposes) for the administrative law judge to take official
notice of documents. Attorneys Call, Kurtzberg, and Neuman provided oral argument
on June 7, 2024.
Respondent acknowledges that the administrative law judge who will hear this
matter for the Department lacks authority under the formal hearing provisions of the
California Administrative Procedure Act (Gov. Code, § 11500 et seq.) to order the
Department directly to dismiss this matter. Respondent argues, however, that becausePage 3 this matter raises questions under both the United States and California Constitutions
relating to governmental speech regulation, the administrative law judge and the
Department should exercise discretion to review these questions now, and to resolve
them if possible without extensive but ultimately unnecessary litigation. Respondent
argues further that the administrative law judge and the Department may resolve
these questions in respondent’s favor without an evidentiary hearing, either because
(1) complainant’s factual allegations do not describe any statutory violation on which
the United States or California Constitutions permit the Department to predicate
enforcement action or (2) the evidence necessary to determine whether such a
statutory violation has occurred is beyond dispute.
The First Amended Accusations do allege facts that would, if true, support
enforcement action by the Department, under relevant statutes that would on those
facts be consistent with both the state and federal constitutions. Complainant alleges
that respondent violated Civil Code section 1770 and Vehicle Code section 11713
when it “made or disseminated statements that are untrue or misleading, and not
based on facts, in advertising vehicles.” In addition, complainant alleges that
respondent violated Vehicle Code sections 24011.5 and 11713 by identifying its
vehicles’ “partial driving automation features using language that implies or would
otherwise lead a reasonable person to believe that the features allow the vehicle to
function as an autonomous vehicle.“ These statutes prohibit false or misleading
statements in vehicle advertising, as complainant alleges; and the Department may, as
an agency of the State of California, prohibit or penalize false or misleading
statements in advertising. (Central Hudson Gas & Electric Corp. v. Public Service Com. of
New York (1980) 447 U.S. 557, 563; Leoni v. State Bar (1985) 39 Cal.3d 609, 624-625.) Page 4 Respondent argues, correctly, that the Department must consider the contexts
in which respondent’s allegedly false or misleading statements have occurred to
evaluate whether these statements really are false or misleading, and if so whether the
Department may revoke or suspend respondent’s licenses because of them. To
consider the statements’ contexts, the Department must rely on evidence establishing
those contexts. According to respondent, however, an evidentiary hearing is
unnecessary because officially noticeable, indisputable documents provide the
complete context in which the administrative law judge, the Department, and any
reviewing court must evaluate each statement that complainant alleges to be unlawful.
At this stage in this proceeding, the administrative law judge cannot conclude
that the documentary evidence of which respondent requests official notice is or will
be the only evidence relevant to complainant’s allegations. 1 Complainant has not yet
offered any evidence, and under the Administrative Procedure Act is under no
obligation before the hearing to do so. Furthermore, respondent’s motion does not
show that complainant necessarily will be unable to present any relevant evidence that
supports complainant’s allegations or contradicts the evidence respondent anticipates
presenting. The administrative law judge cannot terminate this proceeding
prematurely by granting respondent’s motion before complainant has had the
opportunity to develop evidence and present it at the hearing.
Complainant also has statutory authority to amend the accusations further
before hearing. (Gov. Code, § 11507.) Such amendments could make additional
evidence relevant, and could alter the hearing timetable.Page 5 Respondent’s motion to dismiss the First Amended Accusations is denied,
without prejudice to any arguments respondent may make at and after the evidentiary
hearing in this matter.
In light of this ruling, respondent’s request for judicial notice also is denied,
without prejudice to either party’s right to proffer or object to evidence at hearing.
DATE:
/10/2024
JULIET E. COX
Administrative Law Judge
Office of Administrative Hearings
PDF Page 1
PlainSite Cover Page
PDF Page 2
BEFORE THE
DEPARTMENT OF MOTOR VEHICLES
STATE OF CALIFORNIA
In the Matter of the First Amended Accusation Against:
TESLA INC., dba TESLA MOTORS INC.,
A Vehicle Manufacturer, Respondent.
OAH No. 2023110194
Case No. 21-02188
License No. 63277
AIMS No. 21V1L12011
CONSOLIDATED WITH:
In the Matter of the First Amended Accusation Against:
TESLA INC., dba TESLA MOTORS INC.,
A Vehicle Dealer, Respondent.
OAH No. 2023110196
Case No. 21-02189
License No. 68106
AIMS No. 21V1L12011
PDF Page 3
ORDER DENYING MOTION TO DISMISS
These consolidated matters are set for hearing before Administrative Law Judge
Juliet E. Cox, State of California, Office of Administrative Hearings, on September 9
through 13, 2024. Deputy Attorney General Greg Call represents complainant Ailene
Short, Chief of the Industry Services Branch, Occupational Licensing Operations,
Operations Division, Department of Motor Vehicles. Attorneys Ariel A. Neuman, Miri
Gold, Oliver Rocos, Joel Kurtzberg, Miles Wiley, Lisa J. Cole, and Philip Golodetz
represent respondent Tesla Inc.
The First Amended Accusations allege, in brief, that the Department should
revoke or suspend respondent’s licenses to manufacture and sell motor vehicles in
California on the ground that respondent unlawfully has used false, misleading phrases
and feature names to market such vehicles. Respondent has moved for an order
dismissing the First Amended Accusations without an evidentiary hearing, and
recommending that the Department dismiss this matter rather than permitting
complainant to amend the accusations further. Complainant opposes this motion.
The parties provided thorough written argument for and against the motion.
Respondent also offered evidence to support the motion, in the form of a request
(which complainant also opposes) for the administrative law judge to take official
notice of documents. Attorneys Call, Kurtzberg, and Neuman provided oral argument
on June 7, 2024.
Respondent acknowledges that the administrative law judge who will hear this
matter for the Department lacks authority under the formal hearing provisions of the
California Administrative Procedure Act (Gov. Code, § 11500 et seq.) to order the
Department directly to dismiss this matter. Respondent argues, however, that because
2
PDF Page 4
this matter raises questions under both the United States and California Constitutions
relating to governmental speech regulation, the administrative law judge and the
Department should exercise discretion to review these questions now, and to resolve
them if possible without extensive but ultimately unnecessary litigation. Respondent
argues further that the administrative law judge and the Department may resolve
these questions in respondent’s favor without an evidentiary hearing, either because
(1) complainant’s factual allegations do not describe any statutory violation on which
the United States or California Constitutions permit the Department to predicate
enforcement action or (2) the evidence necessary to determine whether such a
statutory violation has occurred is beyond dispute.
The First Amended Accusations do allege facts that would, if true, support
enforcement action by the Department, under relevant statutes that would on those
facts be consistent with both the state and federal constitutions. Complainant alleges
that respondent violated Civil Code section 1770 and Vehicle Code section 11713
when it “made or disseminated statements that are untrue or misleading, and not
based on facts, in advertising vehicles.” In addition, complainant alleges that
respondent violated Vehicle Code sections 24011.5 and 11713 by identifying its
vehicles’ “partial driving automation features using language that implies or would
otherwise lead a reasonable person to believe that the features allow the vehicle to
function as an autonomous vehicle.“ These statutes prohibit false or misleading
statements in vehicle advertising, as complainant alleges; and the Department may, as
an agency of the State of California, prohibit or penalize false or misleading
statements in advertising. (Central Hudson Gas & Electric Corp. v. Public Service Com. of
New York (1980) 447 U.S. 557, 563; Leoni v. State Bar (1985) 39 Cal.3d 609, 624-625.)
3
PDF Page 5
Respondent argues, correctly, that the Department must consider the contexts
in which respondent’s allegedly false or misleading statements have occurred to
evaluate whether these statements really are false or misleading, and if so whether the
Department may revoke or suspend respondent’s licenses because of them. To
consider the statements’ contexts, the Department must rely on evidence establishing
those contexts. According to respondent, however, an evidentiary hearing is
unnecessary because officially noticeable, indisputable documents provide the
complete context in which the administrative law judge, the Department, and any
reviewing court must evaluate each statement that complainant alleges to be unlawful.
At this stage in this proceeding, the administrative law judge cannot conclude
that the documentary evidence of which respondent requests official notice is or will
be the only evidence relevant to complainant’s allegations. 1 Complainant has not yet
offered any evidence, and under the Administrative Procedure Act is under no
obligation before the hearing to do so. Furthermore, respondent’s motion does not
show that complainant necessarily will be unable to present any relevant evidence that
supports complainant’s allegations or contradicts the evidence respondent anticipates
presenting. The administrative law judge cannot terminate this proceeding
prematurely by granting respondent’s motion before complainant has had the
opportunity to develop evidence and present it at the hearing.
1
Complainant also has statutory authority to amend the accusations further
before hearing. (Gov. Code, § 11507.) Such amendments could make additional
evidence relevant, and could alter the hearing timetable.
4
PDF Page 6
Respondent’s motion to dismiss the First Amended Accusations is denied,
without prejudice to any arguments respondent may make at and after the evidentiary
hearing in this matter.
In light of this ruling, respondent’s request for judicial notice also is denied,
without prejudice to either party’s right to proffer or object to evidence at hearing.
DATE:
06/10/2024
JULIET E. COX
Administrative Law Judge
Office of Administrative Hearings
5
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