Automotive

Tesla Faces Antitrust Suit: Owners Seek Fair Repair Access

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Tesla Faces Antitrust Suit: Owners Seek Fair Repair Access

A class action lawsuit has been filed against Tesla, Inc., accusing the electric vehicle (EV) manufacturer of engaging in anticompetitive practices in the United States EV market, Tesla Repair Services market, and Tesla-Compatible Parts market. The plaintiff, Andrew Ragone, alleges that Tesla designed its warranty and related policies to discourage Tesla owners from obtaining repair services or compatible parts from anyone other than Tesla. Furthermore, the lawsuit claims that Tesla unreasonably restricted access to its manuals, diagnostic tools, vehicle telematic data, and OEM replacement parts.

What Laws Did Tesla Allegedly Violate?

The plaintiff alleges Tesla violated Sections 1 and 2 of the Sherman Act as well as Section 102(c) of the Magnuson-Moss Warranty Act. The Sherman Act is a federal antitrust law aimed at preserving competition in markets across the United States. Section 1 prohibits contracts or conspiracies that restrain trade or commerce among states while Section 2 outlaws monopolies or attempts to monopolize any part of interstate commerce.

The Magnuson-Moss Warranty Act is another federal law governing consumer product warranties. In particular, Section 102(c) prohibits manufacturers from tying their warranties to specific products or services unless they can demonstrate that such restrictions are necessary for proper performance or maintenance.

How Does The Plaintiff Claim That Tesla Violated These Laws?

According to the complaint filed by Andrew Ragone against Tesla, the company designed its warranty and related policies to discourage Tesla owners from obtaining Tesla Repair Services or Tesla-Compatible Parts from anyone other than Tesla. This, in turn, allegedly created a barrier for independent repair shops and parts manufacturers to enter the market.

Additionally, Ragone claims that Tesla designed its vehicles such that maintenance and repairs require access to diagnostics and telematics accessible only through remote management tools exclusively accessed by Tesla. This would force vehicle owners to rely on Tesla for any necessary maintenance or repairs, further limiting competition in these markets. Lastly, the lawsuit alleges that Tesla unreasonably restricted access to its manuals, diagnostic tools, vehicle telematic data, and OEM replacement parts which could be viewed as monopolistic behavior.

Who Are The Class Members In This Case?

The class members in this case are current or former United States-based owners of a new or used Tesla vehicle. To be eligible as part of the class action lawsuit against the company, individuals must have been affected by the alleged misconduct laid out in the complaint. This includes violations of Sections 1 and 2 of the Sherman Act as well as Section 102(c) of the Magnuson-Moss Warranty Act.

The exact number of potential class members is unknown at this time; however, it is estimated there may be hundreds of thousands who fit into this category across all states within U.S.

What Damages Is The Plaintiff Seeking?

In addition to seeking certification for a class action lawsuit against Tesla, Andrew Ragone is also demanding injunctive relief as well as monetary damages. The plaintiff is requesting that the court adjudge and decree that Tesla's alleged misconduct violates Sections 1 and 2 of the Sherman Act, and Section 102(c) of the Magnuson-Moss Warranty Act. Furthermore, the plaintiff asks for injunctive relief to protect the interests of class members.

While no specific dollar amount has been stated in the complaint, it's expected that damages sought by Ragone on behalf of himself and other class members will be at least five million dollars.

What Could Be The Next Steps In This Case?

The next steps in this case will likely involve a review of the allegations made by Andrew Ragone against Tesla as well as a determination on whether or not this lawsuit can proceed as a class action. If certified, additional plaintiffs may join in on this legal action against Tesla. It is also possible that there could be attempts to reach a settlement between both parties involved before going to trial.

However, if no settlement is reached and this case proceeds to trial, it may take months or even years before a final verdict is reached. The outcome could have significant implications for Tesla owners as well as independent repair shops and parts manufacturers who wish to compete with Tesla in these markets.

Case Facts

  • Status:
    Lawsuit Filed
  • Case Number:
    5:23-cv-02352
  • Filing Date:
    May 15, 2023
  • Jurisdiction:
    U.S. District Courts
  • State:
    California
  • Court:
    California Northern District
  • Plaintiff:
    Andrew Ragone
  • Defendant:
    Tesla, Inc.
  • Plaintiff Firm:
  • Defendant Firm:
    Schneider Wallace Cottrell Konecky LLP
  • Claims Administrator:
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Will Gendron
Will Gendron
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