- Tesla said it would ask a Pennsylvania court to transfer a Solar Roof complaint to California.
- Two similar complaints were filed in California, representing customers from around the US.
- Each had “highly individualized circumstances,” complicating a class action, Tesla’s lawyers said.
- See more stories on Insider’s business page.
Tesla’s lawyers on Wednesday said they would ask a Pennsylvania court to transfer a class-action complaint over Solar Roof price hikes to California, where similar complaints have been filed.
Otherwise, the company would seek arbitration.
The Pennsylvania complaint – filed in late April by Philip Dahlin and Mary Arndtsen – said Tesla unilaterally increased the price of the couple’s Solar Roof project by more than $30,000 after they’d signed a contract.
Two similar complaints seeking class-action status were filed in May in US District Court in California. Customers across the US said the company increased the price of their roofing projects by as much as 70%.
A California judge was set to decide whether to combine the two local complaints into a single lawsuit, which may then be certified as a class action.
Tesla’s lawyers on Wednesday said that “any discussion of a potential class settlement would be premature and complicated by the highly individualized circumstances at issue” for each customer.
Insider has reached out to Tesla and its lawyers for additional comment.
Lawyers from both sides of the Pennsylvania case met on Tuesday. They agreed that Tesla would ask a judge next week to decide whether to transfer the case, according to a joint court filing.
Without a transfer, Tesla said it would ask the court to send the complaint to arbitration, since there was an arbitration clause in the couple’s contract.
“The parties have conferred and agreed that Tesla will file a motion addressing these issues on June 8, 2021,” the filing said.
Tesla’s Solar Roof contract arbitration clause “almost certainly forestalls this class action under current Supreme Court precedent,” Gregory Klass, associate dean and professor at Georgetown University Law Center, told Insider last month.
In the original complaint, Peter Muhic, of LeVan Muhic Stapleton, wrote that the arbitration clause would be struck down as invalid under Pennsylvania law, in part because of the way it had been formatted on the page. He wrote that the clause also “does not contain a separate line for each party to indicate assent.”
Tesla’s lawyers – Michael G. Rhodes, Whitty Somvichian, and Danielle Pierre of Cooley LLP – said in Wednesday’s filing that the Federal Arbitration Act would compel the parties into arbitration. That law would supersede the Home Improvement Consumer Protection Act, a Pennsylvania law, which was cited in the complaint, the lawyers said.
Muhic and co-counsel on Wednesday wrote that the Pennsylvania law includes “important consumer safeguards and requirements for an arbitration clause to be valid in a home improvement contract in Pennsylvania.”
They added: “Tesla’s contract wholly fails to comply with the requirements, rendering its arbitration clause invalid.”
Tesla’s lawyers also said the company disputes the “characterization of the facts” as they’re laid out in the Pennsylvania complaint. Solar Roof customers could appeal directly to the company, it said.
“Some customers have already availed themselves of that process, and Tesla remains willing to consider individualized requests from plaintiffs or other customers based on customers’ unique circumstances,” the attorneys wrote.