Elon Musk and Tesla suffered a pair of legal setbacks on Monday after federal judges in California and Maryland certified separate class action lawsuits against the carmaker and its CEO personally.
The rulings open the door for broader litigation over Tesla’s marketing of its self-driving technology, and Musk’s alleged role in efforts to defund the U.S. Agency for International Development (USAID).
Musk has not publicly responded to either ruling. Newsweek contacted Tesla and USAID for comment via email outside of normal office hours on Tuesday.
Why It Matters
A class-action lawsuit allows one or more people sue on behalf of a larger group with similar claims. Instead of each person filing separately, the court treats them as a single “class,” making litigation more efficient and giving individuals—who might not sue on their own—the ability to pursue claims collectively. If plaintiffs win or reach a settlement, the outcome typically applies to everyone in the class unless they opt out.
Certification of the Tesla class action magnifies the company’s legal and financial risk by grouping customers into a single lawsuit. Certification of the USAID class action raises Musk’s potential liability and exposes him to wider discovery into his personal actions.
Together, the new rulings highlight Musk’s growing exposure in the courtroom. The rulings do not decide liability but mark a pivotal stage, significantly raising the stakes.
What to Know
Tesla Ruling
In California, U.S. District Judge Rita F. Lin certified two classes in litigation over Tesla’s claims that its vehicles were equipped for full self-driving capability. The case centers on statements by Tesla and Musk that all vehicles produced since late 2016 had the hardware necessary for “Level 5 Autonomy.”
At an October 2016 press conference, Musk said: “Basic news is that all cars exiting the factory have hardware necessary for Level 5 Autonomy so that’s in terms of Cameras, Compute Power, it’s in every car we make … literally meaning hardware capable of full self-driving for driver less capability,” court papers said.
Plaintiffs argue those claims misled consumers into purchasing costly packages such as Enhanced Autopilot (EAP) and Full Self-Driving (FSD). One named plaintiff, Thomas LoSavio, said he spent $8,000 on the packages because he believed full autonomy would soon be available.
Tesla has disputed allegations it missold features, pointing to disclosures that FSD was subject to “validation and regulatory approval.” But the court ruled those statements did not negate the broader message that vehicles already had the hardware for autonomy.
Tesla’s lawyers opposed class certification, arguing plaintiffs cannot represent all buyers exposed to self-driving claims since October 2016, noting some owners value the features and may not want them deactivated.
Judge Lin concluded that Tesla’s representations were widespread enough to affect California purchasers and could form the basis for class-wide claims under consumer protection and fraud statutes. “Plaintiff has shown by a preponderance of the evidence that class members were exposed to the Hardware Statement from October 2016 to August 2024,” she wrote.
Two subclasses were certified: one covering California residents who purchased FSD packages between October 2016 and May 2017, and another for those who opted out of Tesla’s arbitration agreement between 2017 and mid-2024. An injunctive relief class was also certified, which could bar Tesla from making similar statements unless vehicles can actually drive themselves.
USAID Ruling
Meanwhile, in Maryland, U.S. District Judge Theodore D. Chuang certified a class action against Musk personally. In J. Doe 4 v. Musk, plaintiffs allege that Musk was involved in efforts to dismantle or defund USAID programs, undermining the agency’s operations.
The lawsuit, filed by USAID employees and the State Democracy Defenders Fund, represented by Norm Eisen and other attorneys, alleges that only someone nominated by the president and confirmed by the Senate as an “Officer of the United States” could dismantle the agency. Plaintiffs allege Musk, an informal adviser to President Donald Trump, was involved in efforts aligned with the second Trump administration’s attempt to dismantle USAID.
The judge’s 2-page certification order allows plaintiffs to press collective claims rather than pursue them individually. While the court did not detail the alleged conduct in Monday’s filing, the decision means Musk could face broader liability if the claims are proven.
Musk’s lawyers argued class certification was unnecessary, saying overlapping lawsuits already cover the claims and would add “significant additional complexity and burdens” on the court.
What People Are Saying
Plaintiff Thomas LoSavio, who paid about $8,000 for the Full Self‑Driving feature in 2017, said in his testimony he was, “still waiting for the technology six years later, with Tesla remaining unable ‘even remotely’ to produce a fully self‑driving car.”
Judge Theodore D. Chuang’s March 18, 2025 decision on USAID read: “Where Congress has prescribed the existence of USAID in statute pursuant to its legislative powers under Article I, the President’s Article II power … does not provide authority for the unilateral, drastic actions taken to dismantle the agency.”
Plaintiffs’ counsel in the USAID case Norm Eisen, executive chair of the State Democracy Defenders Fund, told the Washington Post on March 18: “They are performing surgery with a chainsaw instead of a scalpel, harming not just the people USAID serves but the majority of Americans who count on the stability of our government. This case is a milestone in pushing back on Musk and DOGE’s illegality.”
Deputy press secretary for the White House Anna Kelly responded in a March 19 statement: “If these Judges want to force their partisan ideologies across the government, they should run for office themselves. The Trump Administration will appeal this miscarriage of justice and fight back against all activist judges intruding on the separation of powers.”
What Happens Next
The Tesla case will now move toward trial, with plaintiffs seeking damages in the form of refunds for FSD purchases and subscriptions. A September 24 conference will set the schedule as discovery begins, with Tesla expected to seek dismissal.
In the USAID case, class members will be notified as discovery and motions proceed, potentially expanding Musk’s liability.
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