Litigation

Tesla faces coordinated class-action litigation across multiple jurisdictions from owners of Hardware 3-equipped vehicles manufactured between 2016 and 2024. The plaintiffs allege that Tesla and Elon Musk made false representations that these vehicles would achieve full self-driving capability through software updates alone. A spring 2026 software release exposed Hardware 3's technical limitations, effectively excluding millions of owners from advanced autonomous features now reserved for newer Hardware 4 systems. The lead case, brought by retired attorney Tom LoSavio, centers on buyers who paid $8,000 to $12,000 for full self-driving capability that is now incompatible with their vehicles without costly hardware retrofits Tesla has not formally offered. Similar suits have been filed in Australia, the Netherlands, across Europe, and in California, where one action involves approximately 3,000 plaintiffs. Globally, the disputes affect roughly 4 million vehicles.

On April 16, 2026, the Ninth Circuit affirmed dismissal of a consumer class action against Brita Products Company, holding that a reasonable consumer would not expect a $15 water filter to remove all hazardous contaminants. Plaintiff Nicholas Brown sued under California's Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act, claiming Brita's labels for its Everyday Pitcher and Standard Filter misled buyers into believing the products eliminated contaminants like arsenic, chromium-6, PFOA, PFOS, nitrates, and radium to undetectable levels. The three-judge panel, led by Judge Kim McLane Wardlaw, rejected the claims after the Los Angeles district court had already dismissed without leave to amend in September 2024.

A federal judge in Manhattan has ruled that a financial services executive waived attorney-client privilege and work product protection by using Anthropic's Claude AI tool without his lawyers' involvement. In United States v. Heppner, Judge Jed S. Rakoff ordered disclosure of 31 strategy documents the defendant generated after inputting case details derived from attorney communications. The court found that Claude, as a non-attorney third party, lacks fiduciary duties, and that Anthropic's privacy policy—which permits data use for training and third-party sharing—destroyed any reasonable expectation of confidentiality. This marks the first federal decision of its kind, rejecting the defendant's argument that later sharing the materials with counsel could retroactively restore privilege protection.

On April 17, the Ninth Circuit reversed a district court's dismissal of a putative class action alleging Target sold 100% cotton bedsheets with fraudulent thread counts. Plaintiff Alexander Panelli claimed he purchased sheets labeled 800-thread-count in September 2023 that tested at only 288 threads per inch. He asserted the label was literally false under California consumer protection law, since 600 thread count is the physical maximum for pure cotton. The district court had dismissed the case, reasoning no reasonable consumer would believe an impossible claim. Target argued the thread count measurement itself was ambiguous and therefore not deceptive as a matter of law.

The Federal Trade Commission's Rule on Unfair or Deceptive Fees took effect on May 12, 2025, requiring companies to disclose total prices upfront for live-event tickets and short-term lodging, including all mandatory fees. The rule has accelerated an already-steep rise in junk fee litigation across ticketing, hospitality, banking, and rental industries. Class actions and mass arbitrations alleging "drip pricing"—the practice of hiding or misrepresenting fees until late in transactions—have spiked since 2022, with potential exposures exceeding $10 million per case. California's SB 478, effective July 1, 2024, compounds liability by imposing penalties up to $2,500 per violation. Plaintiffs' firms are pursuing coordinated mass arbitrations against ticket sellers, banks, landlords, and online retailers, often bypassing class-action waivers through arbitration clauses.

On March 30, 2026, California Attorney General Rob Bonta filed an amicus brief in Art Center Holdings, Inc. v. WCE CA Art, LLC before the California Court of Appeal, Second Appellate District. Bonta argued that succession agreements in management services organization–professional corporation (MSO-PC) structures violate California's corporate practice of medicine doctrine by granting MSOs impermissible control over physician ownership. The brief supports a 2024 trial court ruling that found the defendants engaged in unlicensed practice of medicine through a succession agreement that gave the MSO unfettered discretion to replace the physician-owner, effectively creating a "captive PC" regardless of whether that control right was actually exercised.

VDPP, LLC, a non-practicing entity holding expired U.S. Patent 9,426,452 B2 for 3D display technology, sued Volkswagen Group of America in August 2023 in the Southern District of Texas over alleged infringement in Volkswagen's surround-view camera systems. Volkswagen moved to dismiss, arguing that VDPP failed to comply with the patent marking requirements under 35 U.S.C. §287(a) necessary to recover pre-suit damages. The patent had expired in 2022. Volkswagen also noted that VDPP had previously settled with 11 other defendants under agreements that included denial-of-infringement clauses and imposed no marking obligations. In March 2024, Chief Judge Lee H. Rosenthal granted Volkswagen's motion, dismissed the case with prejudice, denied VDPP's request to amend its complaint as futile, and awarded attorneys' fees against both VDPP and its counsel, William Ramey.

A U.S. district court has dismissed FMReps Consulting Enterprises' patent infringement lawsuit against Ford Motor Company, invalidating two patents under 35 U.S.C. § 101 as directed to unpatentable abstract ideas. FMReps alleged that Ford's certified pre-owned vehicle inspection and approval software infringed its patents covering computerized processes for vehicle certification. The court ruled that the patents merely automated traditional dealership workflows using routine computer functions—dashboards, real-time data displays, role-based access controls, and tabbed interfaces—which does not satisfy patent eligibility standards under Supreme Court and Federal Circuit precedent.

A Pennsylvania federal judge imposed a $5,000 sanction against an attorney for submitting multiple court filings containing fabricated case citations generated by artificial intelligence. The judge, expressing she was "appalled" by the conduct, also ordered the attorney to complete coursework in AI ethics. The misconduct stemmed from the lawyer's failure to verify outputs from AI tools before filing them with the court.

On April 20, 2026, the U.S. District Court for the Western District of Texas vacated a preliminary injunction in Yue v. Reaction Labs, LLC, finding that a USPTO rejection of all 18 claims in U.S. Patent No. 11,972,881 constituted a changed circumstance that undermined the patent owner's likelihood of success on the merits. The court ruled that the non-final office action raising substantial questions of patent validity was enough to overturn its earlier decision granting the injunction to Lup, the patent owner, against counter-defendants Reaction Labs and Yue.

Miles Mediation & Arbitration published "Five Mistakes Attorneys Make at Mediation — and How to Avoid Them" in the Daily Report on April 22, 2026. The article identifies five common pitfalls: inadequate preparation, excessive aggression, miscalculation of settlement value, insufficient settlement authority, and reliance on hardball tactics. Each mistake includes practical guidance for avoidance, drawn from the author's two decades of mediation experience.

Epstein Becker Green released Episode 23 of its "Speaking of Litigation" podcast on April 22, 2026, titled "How to Protect Your Business from a Counterparty's Financial Crisis." The episode features EBG attorneys discussing practical strategies for businesses managing distressed counterparties, including early legal consultation, security interests, guarantees, debtor-in-possession financing, and critical vendor program positioning in bankruptcy scenarios.