Tesla Lawsuit Settlements: Autopilot, FSD, and Musk Pay

Tesla lawsuit settlements and verdicts now span dozens of active matters with total financial exposure estimated between $2.7 billion and $14.5 billion, anchored by an August 2025 jury verdict of roughly $243 million in a fatal Autopilot crash case and followed by a string of confidential settlements in similar wrongful death suits.¹ Other major resolutions include a $919 million board-compensation clawback, the reinstatement of Elon Musk’s $56 billion pay package on appeal, and a certified consumer class action over the Full Self-Driving package.

The $243 Million Benavides Autopilot Verdict

On August 1, 2025, a federal jury in Miami returned the largest Tesla verdict to date: approximately $243 million in a wrongful death case arising from a 2019 crash in Key Largo, Florida. It was the first time a jury held Tesla liable for a fatal crash involving Autopilot and a person outside the Tesla vehicle.²

The underlying crash happened on April 25, 2019. George McGee was driving a Tesla Model S on Autopilot at about 62 mph when it failed to stop for a stop sign and flashing red light at a T-intersection, striking a parked Chevrolet Tahoe. Naibel Benavides Leon, 22, was killed. Her boyfriend Dillon Angulo suffered broken bones and a traumatic brain injury.³ McGee admitted he had been reaching for a dropped cellphone.⁴

The jury assigned Tesla one-third of the blame and the driver two-thirds. Compensatory damages totaled $129 million, with Tesla’s share around $43 million, plus $200 million in punitive damages assessed solely against Tesla.² Tesla called the verdict “wrong,” cited “substantial errors of law and irregularities at trial,” and argued a pre-trial agreement should cap punitive damages at three times the compensatory amount, reducing the total to roughly $172 million. Plaintiffs disputed that reading.⁵

On February 20, 2026, U.S. District Judge Beth Bloom denied Tesla’s motion to overturn the verdict or order a new trial, writing that “evidence admitted at trial more than supports the jury verdict.”⁶ Tesla has said it will appeal.

Autopilot Crash Settlements After Benavides

The Benavides verdict changed Tesla’s posture. Historically the company kept most Autopilot crash cases away from juries through settlements or dismissals, and after the Miami loss it settled at least four additional wrongful death suits, all on undisclosed terms.⁷

Maldonado (California, 2019)

In September 2025, Tesla settled with the family of Jovani Maldonado, a 15-year-old killed in August 2019 on Interstate 880 in Alameda County. He was riding in a Ford Explorer when a Tesla Model 3 with Autopilot engaged struck the vehicle at roughly 70 mph, slowing only a fraction of a second before impact. Jovani was ejected and died at the scene.⁸⁹ The confidential deal closed just before jury trial in Alameda County Superior Court.¹⁰

Gardena (California, 2019)

Also in September 2025, Tesla settled a wrongful death suit tied to a December 2019 collision in Gardena, California, where a Tesla Model S on Autopilot struck a vehicle at a red light, killing two people. Terms were not disclosed.¹¹

Riley and Martinez (Florida, 2018)

A separate line of Florida litigation involved a May 2018 crash in Fort Lauderdale, where 18-year-old Barrett Riley drove a 2014 Model S at 116 mph in a 30-mph zone, struck a concrete wall, and died along with passenger Edgar Monserratt Martinez when the car caught fire. The case did not involve Autopilot; it centered on allegations that a Tesla technician removed a speed limiter Riley’s parents had asked to be installed, without their consent.¹²

A jury in the Riley family’s suit awarded $10.5 million in damages but assigned 90% of the fault to Barrett Riley, 9% to his father, and 1% to Tesla, leaving Tesla responsible for roughly $105,000. The Eleventh Circuit affirmed the verdict in March 2025.¹³ The Martinez family’s separate wrongful death case settled on undisclosed terms as jury selection began on April 20, 2026.¹⁴

The Full Self-Driving False Advertising Ruling

In December 2025, a California administrative law judge ruled that Tesla’s use of the names “Autopilot” and “Full Self-Driving” was false advertising. The judge found “Autopilot” part of an “unlawful tradition” of using ambiguity to mislead consumers and called “Full Self-Driving” “actually, unambiguously false and counterfactual.”¹⁵ The ruling gave the California DMV authority to temporarily suspend Tesla’s manufacturing or sales licenses in the state.¹⁶

Tesla avoided suspension by changing its marketing. By February 17, 2026, the DMV confirmed the company had taken “appropriate corrective action”: adding the “(Supervised)” qualifier to “Full Self-Driving,” dropping “Autopilot” as a standalone product in the U.S. and Canada, and moving FSD to a subscription-only model at $99 per month.¹⁵ Tesla nonetheless sued the DMV on February 13, 2026, in Los Angeles Superior Court, arguing the agency “wrongfully and baselessly” labeled it a “false advertiser.” That case remains active.¹⁶

The FSD Consumer Class Action

A federal class action from customers who paid for Full Self-Driving was certified on September 3, 2025 in In re: Tesla Advanced Driver Assistance Systems Litigation (Case No. 22-cv-05240-RFL, N.D. California), under a “full-refund theory” for damages.¹⁷

The certified classes cover California residents who bought or subscribed to the FSD package between October 2016 and July 2024, split into two groups: buyers before Tesla’s May 2017 arbitration clause, and buyers afterward who opted out of arbitration. The court certified claims tied to Tesla’s statements that its vehicles carried the hardware needed for full self-driving. It declined to certify claims based on a specific marketing promise about a self-driving trip from Los Angeles to New York, citing insufficient evidence of class-wide exposure.¹⁷ Estimated exposure for Tesla ranges from $100 million to $500 million.¹

The Robotaxi Securities Fraud Case

In August 2025, shareholders filed a securities fraud class action in Morand v. Tesla, Inc. (Case No. 1:25-cv-01213, W.D. Texas), alleging Tesla inflated its stock price by concealing Robotaxi program risks during a class period from April 2023 through June 2025. Named defendants include Elon Musk, former CFO Zachary Kirkhorn, current CFO Vaibhav Taneja, and two other executives. Tesla filed a motion to dismiss in April 2026, with the plaintiffs’ opposition due June 22, 2026.¹⁸ Estimated exposure runs from $1 billion to $5 billion.¹

Racial Discrimination Cases at the Fremont Plant

Tesla’s Fremont, California factory has been the target of nearly a decade of racial discrimination litigation, with three tracks worth watching.

Owen Diaz. A former elevator operator hired in 2015 alleged a hostile work environment involving daily racist epithets, graffiti including swastikas, and threats. A jury initially awarded $137 million, which a judge reduced to $15 million. A 2023 damages retrial produced a $3.2 million award. The case resolved through a confidential settlement in 2024.¹⁹

Vaughn v. Tesla. A proposed class action filed in 2017 on behalf of Black workers at Fremont was decertified by Superior Court Judge Peter Borkon, who ruled that plaintiffs’ counsel could not produce enough randomly sampled class members willing to testify at trial for the court to “reliably extrapolate from the experiences of the trial witnesses to the 14,000 members of the class as a whole.” Attorneys then filed over 500 individual lawsuits with plans to bring more than 900.²⁰

EEOC action. The U.S. Equal Employment Opportunity Commission sued Tesla in 2023, alleging “severe or pervasive” racism against Black employees at Fremont in violation of Title VII. The parties entered private mediation in early 2026. If no settlement is reached, they must submit a proposed litigation protocol to the U.S. District Court for the Northern District of California by June 17, 2026.²¹

The $919 Million Board Compensation Settlement

On January 8, 2025, the Delaware Chancery Court approved a settlement requiring Tesla board members to return as much as $919 million to the company. Shareholders had accused 12 directors of overpaying themselves between 2017 and 2020. Under the deal, directors returned about $277 million in cash and $459 million in stock options, and agreed to forgo future stock option compensation from 2021 to 2023 valued at up to $184 million. Involved directors included board chair Robyn Denholm, Oracle co-founder Larry Ellison, and former 21st Century Fox CEO James Murdoch.²²

The settlement also imposed five years of governance reforms, including annual reviews of director pay, use of an outside compensation consultant, and annual shareholder votes on director compensation. The court awarded $176.2 million in legal fees to the firms representing the plaintiff, the Police and Fire Retirement System of the City of Detroit.²³

Elon Musk’s $56 Billion Pay Package

A separate shareholder challenge targeted the 2018 equity compensation plan awarded to Elon Musk, valued at roughly $56 billion. In January 2024, Delaware Chancellor Kathaleen McCormick ordered the plan rescinded, finding disclosure failures and a breach of fiduciary duty. She identified Musk as a “controlling shareholder” and called the board’s approval process “deeply flawed.”²⁴

On December 19, 2025, the Delaware Supreme Court unanimously reversed, holding that full rescission was “too extreme a remedy” because it left Musk uncompensated for six years of work. The court reinstated the 2018 plan and awarded the plaintiff $1 in nominal damages. It also cut the plaintiff’s attorneys’ fee award from $345 million to about $54 million.²⁵²⁴ The Supreme Court restored the package but did not disturb the lower court’s findings that Musk was a controlling shareholder or that the approval process was flawed. Tesla has since reincorporated from Delaware to Texas.

Total Legal Exposure as of April 2026

Tesla faces more than 20 active litigation tracks with total exposure estimated at $2.7 billion to $14.5 billion. Beyond the cases above, active matters include class actions over allegedly manipulated range projections, odometer manipulation said to shorten warranty periods, Powerwall 2 defects, antitrust claims tied to repair monopolies, wage and hour violations, and H-1B visa discrimination.¹ The Miami verdict appears to have shifted Tesla’s willingness to settle Autopilot cases before trial, with at least four crash suits resolved on confidential terms in its wake.⁷

1
Electrek. Tesla Facing Up to $14 Billion in Lawsuits Deep Dive
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NBC News. Tesla Autopilot Crash Trial Verdict Partly Liable
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ABC7. Jury Orders Tesla To Pay More Than $240 Million in Autopilot Crash Case
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CNBC. Tesla Must Pay $329 Million in Damages in Fatal Autopilot Case
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NPR. Tesla Autopilot Crash Jury $240 Million Florida
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CNBC. Tesla Loses Bid to Toss $243 Million Verdict in Fatal Autopilot Crash Suit
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ABC Australia. Tesla Settles Lawsuits Fatal Crashes Involving Autopilot
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Claims Journal. Tesla Reaches Confidential Settlement in Autopilot Fatal Crash Lawsuit
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CBS News San Francisco. Bay Area Family Suing Tesla Blames Son’s Death on Nascent Autopilot Technology
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The Verge. Tesla Settles Wrongful Death Autopilot Maldonado
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Singleton Schreiber. Tesla Settles Two California Lawsuits on 2019 Crashes Related to Autopilot Software
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Electrek. Tesla Settles Wrongful Death Lawsuit Speed Limiter Not Autopilot
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Justia. James B. Riley v. Tesla Motors, Inc., No. 22-12515
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CBS News Miami. Tesla Wrongful Death Trial South Florida Crash Barrett Riley Edgar Monserrat Martinez
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Electrek. Tesla Sues California DMV to Reverse FSD False Advertising Ruling
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CNBC. Tesla Sues California DMV to Reverse False Advertising Ruling on FSD
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FindLaw. In re Tesla Advanced Driver Assistance Systems Litigation
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CourtListener. Morand v. Tesla, Inc.
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CNBC. Tesla Settles Racial Discrimination Lawsuit
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KQED. Tesla Dodges Class Action Case Now Faces Hundreds of Individual Race Harassment Claims
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HR Dive. EEOC Tesla Head to Private Mediation in Racial Harassment Lawsuit
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Intelligize. Court OKs Tesla Board’s Deal to Repay Nearly $1 Billion
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Legal Dive. Tesla Board Will Return More Than $900M in Shareholder Settlement
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CNBC. Musk Tesla Pay Delaware Supreme Court
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Harvard Law School Forum on Corporate Governance. What the Tesla Decision Means for Executive Compensation and Other Corporate Issues