In this week’s Suits & Settlements, you’ll find the following reports:
Tesla Autopilot Lawsuit Moves Forward in Fatal Crash Case. A federal judge has allowed key claims to proceed in a wrongful death lawsuit alleging Tesla’s Autopilot system contributed to a fatal crash, rejecting the automaker’s argument that the claims were preempted by federal safety standards, according to Reuters. The case centers on whether Tesla’s driver-assistance technology was defectively designed or inadequately warned drivers of its limitations. Plaintiffs argue the system created a false sense of security and failed to prevent a foreseeable collision, while Tesla maintains drivers are responsible for maintaining control at all times. The ruling allows core product liability and negligence claims to move forward, keeping alive one of several closely watched cases testing how courts will treat advanced driver-assistance systems as they become more common across the industry.
Federal Judge Rules Class-Action Lawsuit May Proceed Against GM, OnStar Over Driver Data Sharing Practices. According to multiple reports, in April, a federal judge ruled that core claims can proceed in a class action lawsuit against GM, On Star and several analytics firms over data collection practices. In a 200-plus page ruling, U.S. District Judge Thomas Thrash largely rejected the defendants' efforts to dismiss federal wiretap and privacy claims. The case stems from a 2024 report in the New York Times that alleged the automaker compiled and gave driving info to auto insurers without drivers consent or knowledge. The plaintiffs claim information such as hard braking, speed and mileage was transmitted through connected vehicle systems and used to help insurers adjust premiums, potentially without drivers’ knowledge. Plaintiffs allege violations of privacy and consumer protection laws, while the companies involved have said disclosures were provided and consent obtained through user agreements. The litigation reflects growing scrutiny over how automakers monetize connected car data and could shape future rules around transparency and consumer control.
Automakers Push Back Against Multi-Billion-Dollar Finance Scheme. A British auto finance scandal is heading deeper into the courts after Mercedes-Benz and Volkswagen joined legal challenges to a proposed $12 billion consumer compensation program tied to allegedly mis-sold car loans, according to Reuters. The dispute centers on claims that lenders and dealers failed to properly disclose commission arrangements that may have increased borrowing costs for consumers financing vehicles. Britain’s Financial Conduct Authority is developing a massive industrywide redress plan, but automakers and finance companies argue portions of the proposal are unclear, overly broad and potentially unlawful. Volkswagen Financial Services UK said it supports compensation for consumers who were genuinely harmed but wants courts to clarify how the reimbursement framework would work before billions are paid out. Legal experts say the case could become one of the largest automotive financial settlements in U.K. history and may influence how vehicle financing disclosures are handled globally. The litigation also highlights growing scrutiny of dealer-arranged financing and incentive structures, long a profit center for dealerships and captive finance arms alike.
Automakers Watching Closely as Stellantis Contract Battle Continues. A closely watched supply-chain lawsuit involving Stellantis and supplier Kamax Inc. took another turn last week after the Michigan Supreme Court declined to hear an appeal that many automotive manufacturers hoped would clarify long-term parts contract obligations, according to legal analysis published by UHY and Foley & Lardner. The case centers on whether automakers can dramatically reduce purchases under flexible “requirements contracts” without breaching supplier agreements, an issue with major implications across the industry as manufacturers rapidly adjust production for EVs, hybrids and changing consumer demand. By declining review, the court leaves in place lower-court rulings favoring supplier Kamax, while avoiding a broader precedent the automotive supply chain had hoped for. Attorneys following the case say the uncertainty could make suppliers more cautious when negotiating future contracts and could lead to more litigation over volume commitments and sourcing changes. In an era of volatile production schedules, tariff concerns and shifting electrification strategies, the dispute underscores how legal fights over parts contracts are becoming increasingly important behind the scenes of the auto business.