US judge says Tesla privacy case belongs in arbitration, not court
By Mike Scarcella
Oct 13 (Reuters) -A Tesla TSLA.O owner who accused the electric vehicle maker of improperly accessing and sharing video recorded from his car must pursue his privacy claims in an individual arbitration rather than a proposed class action lawsuit, a judge in California has ruled.
Tesla owner Henry Yeh agreed to an arbitration provision for resolving disputes with the carmaker when he bought his Model Y car online in late 2021, U.S. Magistrate Judge Joseph Spero said in a Thursday order.
Spero's ruling means Tesla, at least for now, will not have to face class action claims from a larger group of vehicle owners. Spero paused Yeh's case pending the outcome of the arbitration proceeding and did not delve into the merits of Yeh's lawsuit.
Lawyers for Yeh did not immediately respond to a request for comment.
Tesla and its attorneys did not immediately respond to similar requests.
Yeh's lawsuit in April came on the heels of a Reuters report that Tesla employees had used an internal messaging system to privately share highly invasive videos and images that were captured on customers' cameras between 2019 and 2022.
The Reuters report, based on interviews with nine former employees, said some of the recordings caught Tesla customers in embarrassing situations. Crashes and road-rage incidents were also shared.
Tesla's attorneys in a court filing said Yeh's lawsuit failed to allege that Tesla improperly collected and shared data from his vehicle. The lawyers also said Tesla owners "can disable the collection of camera data through a few easy steps via their vehicle's touchscreen."
Tesla's arbitration agreements have been challenged in a number of cases. Tesla is one of a few automakers that have direct sales to consumers, and so consent to arbitration occurs with a click of a button when an order is placed.
In Yeh's case, his attorneys said the arbitration provision is improper because it prohibits Yeh and other owners from seeking a public injunction in any forum.
They also argued that Yeh's one-year-old son was not bound to arbitration.
In his ruling, Spero said it would be "inequitable" to let Yeh's son litigate privacy claims in court that "are so closely intertwined with the claims his father agreed to arbitrate."
Hyunjoo Jin contributed reporting.
The case is Yeh v. Tesla, U.S. District Court, Northern District of California, 3:23-cv-01704-JCS.
For Yeh: Jack Fitzgerald and Paul Joseph of Fitzgerald Joseph; and Timothy Blood and Thomas O'Reardon of Blood Hurst & O'Reardon
For Tesla: David Schrader and Mark Feller of Morgan, Lewis & Bockius
Read more:
Tesla workers shared sensitive images recorded by customer cars
Tesla scores Autopilot victory as judge rules owners must use arbitration
Tesla hit with class action lawsuit over alleged privacy intrusion
Reporting by Mike Scarcella
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