Judge orders Tesla, plaintiffs to show cause in $500M false advertising case

A federal judge said attorneys for Tesla missed a deadline by months to answer an amended complaint after its motion to dismiss was denied in a $500 million false advertising lawsuit against the company.

Judge Eumi K. Lee ordered Thursday that attorneys for Tesla and the plaintiffs show cause for missing several deadlines, including failing to file a joint case management statement by Jan. 14. It's the third deadline missed in the case, Lee said.

Tesla filed its response shortly after Lee's order Thursday, court documents show.

Lee said both sides must explain to the court why they shouldn't be sanctioned by late January. Tesla is represented by Theta Law Firm, LLP, while plaintiffs are represented by Etemadi Legal Group PC.

"The parties have now violated three Court Orders -- the Civil Standing Order, the Case Management Order, and the Court's January 12, 2026 Order (ECF No. 48) -- by failing to file a case management statement in advance of their Further Case Management Conference scheduled for 1/21/2026. Additionally, Defendant did not file an answer to the operative complaint, after the Court denied Defendant's motion to dismiss, and Defendant's answer is long overdue," the court order states. Nemati et al v. Tesla Motors, Inc., 5:25-cv-00302 (N.D. Cal., filed Jan. 8, 2025).

Adam A. Knighton, representing Tesla, filed a response to the show cause order Thursday. Knighton apologized for the oversight, said the firm would take steps to ensure it doesn't happen again, and asked the court not to impose any punishment beyond requiring the missing documents to be filed.

"With respect to the missed case management statement, there was staff turnover around the time of issuance of the operative case management directives," the response said. "As a result, certain deadlines that should have been calendared were not properly calendared. This was an internal breakdown in calendaring and oversight. Defendant recognizes that staff turnover is not a justification for noncompliance with Court orders."

In response to the order, plaintiffs, who allege the company's cars don't travel as far on a charge as its advertising suggests, filed a motion for a default judgment against Tesla because of their failure to respond.

"Plaintiffs seek default as Defendant has failed to file an Answer almost two months after it was due," the motion, filed by Donna Etemadi, states. "Defendant has also failed to request any extensions on filing an Answer during this time."

Etemadi declined to comment on the case, but her motion states that she was out of the country for a family member's wedding around the time Tesla's answer to the complaint was due and had a trial in a different case upon returning, so she wasn't aware of the company's failure to respond.

The two sides were supposed to meet for a case management conference Jan. 21 but Lee postponed the conference to Feb. 11. The two sides have until Jan. 28 to show cause if they wish to avoid sanctions.

Plaintiffs filed the complaint in November 2024 in Santa Clara County Superior Court, alleging Tesla advertised the full battery capacity of their vehicles even though they warn drivers against fully charging their cars. The case was transferred to federal court in January 2025.

"Setting charge limits directly impacts total range," the complaint, filed by Etemadi, states. "Tesla's advertised total range of its vehicles are based on a full charge. However, because Tesla discourages owners from ever charging their vehicles to 100%, it is increasingly difficult--if not impossible--to ever reach that advertised range. For example, setting the vehicle's charge limit at 80% can reduce the total range by over a hundred miles, compared to the advertised range."

Plaintiffs sued for breach of contract and warranty, false advertising and violations of California's Unfair Competition Law.

Attorneys Soheyl Tahsildoost and Knighton, on behalf of Tesla, moved to dismiss the second amended complaint in August, but Lee denied its motion in October.