Court Tosses Tesla Securities Case

It took a federal appeals court less than a week to reject Tesla shareholders’ plea to revive a class action challenging Tesla’s 2013 statements that its cars are safe from fires in its lithium batteries.

The 9th U.S. Circuit Court of Appeals in a non-precedential ruling Wednesday upheld a lower court ruling to dismiss the class action lawsuit that claimed Tesla caused a $6.5 billion drop in its market value by allegedly lying about the safety of its electric cars.

The shareholders have failed to allege any materially false or misleading statements by Tesla, the panel said.  “Almost all of the allegedly false or misleading statements were true, and those few statements that arguably were misleading were not materially misleading, the panel said.

The court heard arguments in the case just six days before issuing the ruling.

The decision backs a 2014 decision by U.S. District Judge Charles Breyer in San Francisco and the appeals court agreed that no amount of amending the claims could save the lawsuit.

Case: Acar v. Tesla Motors, No. 14-1750

 

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