The case involved a fatal crash in March 2018, when a Tesla in Autopilot careened into a highway barrier near Mountain View, Calif., after getting confused by what the company’s lawyers described in court documents as a “faded and nearly obliterated” lane line. Walter Huang, a father of two and Apple engineer on his morning commute, was allegedly playing a game on his phone while his Tesla steered itself down U.S. 101. Documents filed in the case show Huang’s vehicle on Autopilot drifted from a “faded and nearly obliterated” lane line and then began following a clearer lane line to the left, which put him in the path of a highway safety barrier separating the 101 from an exit to State Route 85 while going 71 mph.
Huang, 38, was killed. An investigation by the National Transportation Safety Board later cited Tesla’s failure to limit the use of Autopilot in such conditions as a contributing factor: The company has acknowledged to National Transportation Safety Board that Autopilot is designed for areas with “clear lane markings.”
The settlement is a surprising twist in the high-profile case, which Tesla has been fighting since Huang’s family sued in April 2019. In its defense for this case — as well as other lawsuits headed to trial this year — Tesla argues that it was not liable because it warns drivers that they are ultimately in control of the vehicle while in Autopilot.
Tesla argues it “makes extremely clear” that the driver must be fully alert and have their hands on the wheel while using Autopilot, and the company also states in its user manual that the technology may not operate as intended “when unable to accurately determine lane markings” or when “bright light is interfering with the camera’s view.” According to court documents, Huang’s hands were not detected on the wheel within seconds of the crash.
At issue in this case was whether those warnings were enough to spare the company from all liability when it knows about a shortcoming, but still puts the responsibility on the driver to correct for its mistakes. Tesla knew for years that faded lane lines could be a problem, according to complaints filed to NHTSA, deposition from top engineers at the company and federal investigators.
Ed Walters, who teaches autonomous vehicle law at Georgetown Law, said he is surprised Tesla decided to settle in the case because the facts of Huang’s crash seemed “favorable” for Tesla. Since the Huang case echoes multiple other lawsuits across the country scheduled for trial later this year or early next, many observers were watching this case closely for its potential to set a precedent for the future proceedings.
The outcomes of these trials are critical for the company’s future and Musk, who has said Tesla is “worth basically zero” if it cannot make its cars self-driving. Tesla has so far prevailed: A jury found the company not liable in a case last year over the alleged role of its Autopilot technology in a 2019 crash in Riverside County, Calif.
Walters said settlements are a good way for the company to “manage risk,” as jury trials can yield “highly unpredictable results.” The trial was expected to last several weeks, according to the family’s lawyers.
“This might be a sign that Tesla is taking a stronger settlement posture for early cases, waiting to litigate until its software is more advanced,” he said. But he added that he is “surprised this case settled. I thought Tesla would want to litigate on these facts.”
