SOHAIL, et al. vs TESLA, INC.

25CV141154: SOHAIL, et al. vs TESLA, INC. 06/02/2026 Hearing on Motion to Compel Arbitration filed by TESLA, INC. (Defendant) CRS# 144185117167 in Department 517

Tentative Ruling - 05/27/2026 Keith Fong

The Motion to Compel Arbitration filed by TESLA, INC. on 04/13/2026 is Granted.

Defendant Tesla, Inc.’s Motion to Compel Arbitration is GRANTED.

BACKGROUND

On or about March 9, 2021, Plaintiffs Shazia Sohail and Sohail Mehmood (“Plaintiffs”) placed an order for a 2021 Tesla Model Y (“the Subject Vehicle”) through Defendant Tesla, Inc.’s (“Tesla” or “Defendant”) website. (Kim Decl. ¶ 3.) For Plaintiffs to place the order, Plaintiffs were required to accept the terms and conditions of Tesla’s Motor Vehicle Order Agreement (“Order Agreement”) which was available through a hyperlink below the “Place Order” button. (Id. ¶ 4.)

The Order Agreement contained an Agreement to Arbitrate, which states the following in pertinent part:

Please carefully read this provision, which applies to any dispute between you and Tesla, Inc. and its affiliates, (together “Tesla”). ... If not resolved within 60 days, you agree that any dispute arising out of or relating to any aspect of the relationship between you and Tesla will not be decided by a judge or jury but instead by a single arbitrator in an arbitration administered by the American Arbitration Association (AAA) under its Consumer Arbitration Rules. This includes claims arising before this Agreement, such as claims related to statements about our products.

We will pay all AAA fees for any arbitration, which will be held in the city or county of your residence. To learn more about the Rules and how to begin an arbitration, you may call any AAA office or go to www.adr.org.

The arbitrator may only resolve disputes between you and Tesla, and may not consolidate claims without the consent of all parties. If a court or arbitrator decides that any part of this agreement to arbitrate cannot be enforced as to a particular claim for relief or remedy, then that claim or remedy (and only that claim or remedy) must be brought in court and any other claims must be arbitrated.

If you prefer, you may instead take an individual dispute to small claims court. 25CV141154: SOHAIL, et al. vs TESLA, INC. 06/02/2026 Hearing on Motion to Compel Arbitration filed by TESLA, INC. (Defendant) CRS# 144185117167 in Department 517

You may opt out of arbitration within 30 days after signing this Agreement by sending a letter to: Tesla, Inc.; P.O. Box 15430; Fremont, CA 94539-7970, stating your name, Order Number or Vehicle Identification Number, and intent to opt out of the arbitration provision. If you do not opt out, this agreement to arbitrate overrides any different arbitration agreement between us, including any arbitration agreement in a lease or finance contract.

(Kim Dec. Exh. 1, p. 3.)

When Plaintiffs took delivery of the Subject Vehicle on or about March 26, 2021, Plaintiffs executed a Retal Installment Sale Contract (“RISC”). (Kim Decl. ¶ 3.) At the bottom of the first page of the RISC, it states the following:

Agreement to Arbitrate: By signing below, you agree that, pursuant to the Arbitration Provision on page 5 of this contract, you or we may elect to resolve any dispute by neutral, binding arbitration and not by a court action. See the Arbitration Provision for additional information concerning the agreement to arbitrate.

(Kim Dec. Exh. 2.)

The RISC contained an Arbitration Provision, which states the following in pertinent part:

ARBITRATION PROVISION PLEASE REVIEW - IMPORTANT - AFFECTS YOUR LEGAL RIGHTS

1. EITHER YOU OR WE MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN YOU AND US DECIDED BY ARBITRATION AND NOT IN COURT OR BY JURY TRIAL.

2. IF A DISPUTE IS ARBITRATED, YOU WILL GIVE UP YOUR RIGHT TO PARTICIPATE AS A CLASS REPRESENTATIVE OR CLASS MEMBER ON ANY CLASS CLAIM YOU MAY HAVE AGAINST US INCLUDING ANY RIGHT TO CLASS ARBITRATION OR ANY CONSOLIDATION OF INDIVIDUAL ARBITRATIONS.

3. DISCOVERY AND RIGHTS TO APPEAL IN ARBITRATION ARE GENERALLY MORE LIMITED THAN IN A LAWSUIT, AND OTHER RIGHTS THAT YOU AND WE WOULD HAVE IN COURT MAY NOT BE AVAILABLE IN ARBITRATION.

Any claim or dispute, whether in contract, tort, statute or otherwise (including the

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV141154: SOHAIL, et al. vs TESLA, INC. 06/02/2026 Hearing on Motion to Compel Arbitration filed by TESLA, INC. (Defendant) CRS# 144185117167 in Department 517 interpretation and scope of this Arbitration Provision, any allegation of waiver of rights under this Arbitration Provision, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successors or assigns, which arises out of or relates to your credit application, purchase or condition of this Vehicle, this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action.

You or we may choose the American Arbitration Association (www.adr.org) or National Arbitration and Mediation (www.namadr.com) as the arbitration organization to conduct the arbitration. If you and we agree, you or we may choose a different arbitration organization. You may get a copy of the rules of an arbitration organization by contacting the organization or visiting its website.

Arbitrators shall be attorneys or retired judges and shall be selected pursuant to the applicable rules. The arbitrator shall apply governing substantive law and the applicable statute of limitations. The arbitration hearing shall be conducted in the federal district in which you reside unless the Seller-Creditor is a party to the claim or dispute, in which case the hearing will be held in the federal district where this transaction was originated. We will pay the filing, administration, service, or case management fee and the arbitrator or hearing fee up to a maximum of $5,000, unless the law or the rules of the chosen arbitration organization require us to pay more.

You and we will pay the filing, administration, service, or case management fee and the arbitrator or hearing fee over $5,000 in accordance with the rules and procedures of the chosen arbitration organization. The amount we pay may be reimbursed in whole or in part by decision of the arbitrator if the arbitrator finds that any of your claims is frivolous under applicable law. Each party shall be responsible for its own attorney, expert and other fees, unless awarded by the arbitrator under applicable law.

If the chosen arbitration organization's rules conflict with this Arbitration Provision, then the provisions of this Arbitration Provision shall control. Any award by the arbitrator shall be in writing and will be final and binding on all parties, subject to any limited right to appeal under the Federal Arbitration Act. Any court having jurisdiction may enter judgment on the arbitrator's award. This Arbitration Provision shall survive any termination, payoff or transfer of this contract. If any part of this Arbitration Provision, other than waivers of class rights, is deemed or found to be unenforceable for any reason, the remainder shall remain enforceable.

You agree that you expressly waive any right you may have for a claim or dispute to be resolved on a class basis in court or in arbitration. If a court or arbitrator finds that this class arbitration waiver is unenforceable for any reason with respect to a claim or dispute in which class allegations have been made, the rest of this Arbitration Provision shall also be unenforceable.

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV141154: SOHAIL, et al. vs TESLA, INC. 06/02/2026 Hearing on Motion to Compel Arbitration filed by TESLA, INC. (Defendant) CRS# 144185117167 in Department 517 (Kim Dec. Exh. 2.)

Plaintiffs initiated this litigation on September 5, 2025, alleging various violations of the Song- Beverly Consumer Warranty Act against Defendant related to the purchase of the Subject Vehicle. Defendant moves to compel arbitration and stay proceedings, pursuant to the arbitration provisions in both the Order Agreement and the RISC. Plaintiffs contend that Defendant has not established mutual consent to the terms of the arbitration provisions, and that the arbitration provisions are unconscionable and therefore unenforceable.

LEGAL STANDARD

An agreement to submit disputes to arbitration “is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281; see 9 U.S.C. § 2.)

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) grounds exist for the recission of the agreement.” (Code Civ. Proc. § 1281.2.)

REQUEST FOR JUDICIAL NOTICE

Defendant’s unopposed Request for Judicial Notice is GRANTED IN PART. Notice is taken only of the existence of Plaintiffs’ Complaint, and not the truth of factual matters asserted in the documents. (People v. Franklin (2016) 63 Cal. 4th 261, 280.)

DISCUSSION

Existence of a Valid Arbitration Agreement

The threshold question in a motion to compel arbitration is whether there is an agreement to arbitrate. (Fleming v. Oliphant Financial, LLC (2023) 88 Cal.App.5th 13, 19.) A court cannot compel an individual to arbitrate a dispute if he or she did not agree to do so. (Id.) An arbitration agreement is subject to the same rules of construction and enforcement as any other contract. (Toal v. Tardif (2009) 178 Cal.App.4th 1208, 1221.)

The moving party bears the initial burden of proving the existence of a valid arbitration agreement. (Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 787.) Facts necessary to determine an arbitration agreement’s enforcement are proven by affidavits or declarations. (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV141154: SOHAIL, et al. vs TESLA, INC. 06/02/2026 Hearing on Motion to Compel Arbitration filed by TESLA, INC. (Defendant) CRS# 144185117167 in Department 517 Tesla submits the declaration of Raymond Kim, Defendant’s Business Resolution Manager. Kim states that he is familiar with Tesla’s record-keeping procedures and processes of the subject transaction. (Kim Dec. ¶ 2.) As noted above, Kim describes the procedure by which Plaintiffs placed the order for the Subject Vehicle, and the execution of the Order Agreement containing the Arbitration Provision. (Id. ¶ 4.)

He states that the Order Agreement is placed in Plaintiffs’ electronic file after a consumer has executed the Order Agreement, and the file is kept in the ordinary course of business. (Id. ¶ 5) He further states that Tesla did not receive correspondence from Plaintiffs opting out of the Arbitration Provision. (Id. ¶ 7.) Kim further states that Plaintiffs had an opportunity to read the entire RISC prior to signing, and once executed, it is kept in the ordinary course of business. (Id. ¶¶ 8-10.) He states that neither the Order Agreement nor the RISC would not be in Tesla’s internal system without Plaintiffs’ execution regarding the purchase of the Subject Vehicle. (Id. ¶¶ 5, 13.)

The Court finds that Tesla establishes the existence of a valid arbitration agreement entered into by Plaintiffs. As Tesla has met its burden, Plaintiffs, as the party opposing arbitration, must prove by the preponderance of the evidence any defense to the motion to compel the dispute to be arbitrated. (Larian v. Larian (2004) 123 Cal.App.4th 751, 760.)

Plaintiffs contend that the agreement was not entered into with mutual assent. However, neither Plaintiff submits a sworn declaration stating that they did not enter into either the Order Agreement or the RISC which contained arbitration provisions as set forth in the Kim Declaration. There is no evidence submitted with the Opposition stating that Plaintiffs did not notice or was unable to review the Terms and Conditions containing the Arbitration Provision. The declaration of attorney Lillian Lawrence contains hearsay, speculation, and improper argument as to Plaintiffs’ order and purchase of the Subject Vehicle, or their review and acceptance of the agreements containing the arbitration provisions.

Plaintiffs have not demonstrated by the preponderance of the evidence any defense to the existence of a valid arbitration agreement. As such, the Court finds that there are valid arbitration provisions in the agreements between Plaintiffs and Defendant.

Unconscionability

Plaintiffs argue that the arbitration agreement is unenforceable because it is both procedurally and substantively unconscionable.

A court may refuse to enforce an unconscionable provision in a contract, such as an arbitration agreement. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.) “[U]nconscionability has both a ‘procedural’ and a ‘substantive’ element, the former focusing on ‘oppression’ or ‘surprise’ due to unequal bargaining power, the latter on ‘overly harsh’ or ‘one-sided’ results.” (Id.) Both procedural and substantive unconscionability must be found before an arbitration provision is deemed unenforceable, but they need not be present in the same degree. (Id.) Rather a sliding scale is involved under which "the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV141154: SOHAIL, et al. vs TESLA, INC. 06/02/2026 Hearing on Motion to Compel Arbitration filed by TESLA, INC. (Defendant) CRS# 144185117167 in Department 517 come to the conclusion that the term is unenforceable, and vice versa." (Id.)

"[T]he party opposing arbitration bears the burden of proving any defense, such as unconscionability." (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

Procedural Unconscionability

Procedural unconscionability means “an absence of meaningful choice” on the part of one of the contracting parties and substantive unconscionability means terms that can be described as “overly harsh,” “unduly oppressive,” or “so one sided as to shock the conscience.” (Sonic- Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1145 (citing cases).) Procedural unconscionability refers to the manner in which a party's consent was obtained. Consent, of course, is the basis of contractual arbitration. (Oto, L.L.C. v. Kho (2019) 8 Cal 5th 111, 129.)

Plaintiffs contend that the Order Agreement was a contract of adhesion as Plaintiffs had no meaningful opportunity to negotiate or discuss the terms. The adhesive nature of the contract establishes a degree of unconscionability but does not render the contract automatically unenforceable. (Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 914.)

Plaintiffs further contend that the circumstances of the sales transaction increased procedural unconscionability. However, Plaintiffs do not submit admissible evidence to establish the circumstances of the sales transaction. Based upon the declaration of Raymond Kim, it appears that Plaintiffs initially purchased the Subject Vehicle online, and the RISC was executed when Plaintiffs took delivery of the Subject Vehicle.

Pursuant to the foregoing, the Court finds a minimal amount of procedural unconscionability in the Arbitration Provision of the Order Agreement.

Substantive Unconscionability

Substantive unconscionability focuses on whether the provision is overly harsh or one-sided and is shown if the disputed provision of the contract falls outside of the reasonable expectations of the non-drafting party or is unduly oppressive. (Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 88.)

Plaintiffs contend that the class action waiver in both arbitration provisions eliminates Plaintiffs’ “only realistic means of enforcing their rights.” (Opposition Br. at p. 5.) However, Plaintiffs are not bringing a representative action here; the Complaint is for Plaintiffs’ claims relating to the Subject Vehicle. Plaintiffs are not prevented from bringing their individual claims to enforce their rights to the warranties as alleged in their Complaint.

Plaintiffs contend that the fee-splitting provision may impose unreasonable costs. The arbitration

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV141154: SOHAIL, et al. vs TESLA, INC. 06/02/2026 Hearing on Motion to Compel Arbitration filed by TESLA, INC. (Defendant) CRS# 144185117167 in Department 517 provision provides that Tesla will pay the filing, administration, service, or case management fee and the arbitrator/hearing fee up to a maximum of $5,000, unless the forum requires additional payment. The provision further states that either Plaintiffs or Tesla will pay fees over $5,000. Tesla may be reimbursed in whole or in part only upon a finding that the arbitrator finds that the claims are legally frivolous. Both parties will bear their own attorneys’ fees and costs unless otherwise awarded by the arbitrator.

The Court finds insufficient grounds of substantive unconscionability.

CONCLUSION

Defendant meets its initial burden to show the existence of a valid arbitration agreement. Plaintiffs have not presented sufficient evidence to demonstrate that the agreement is so procedurally and/or substantively unconscionable that it cannot be enforced.

Pursuant to the foregoing, Defendant’s motion to compel arbitration is GRANTED. These proceedings are STAYED pending resolution of the arbitration. (C.C.P. § 1281.4.)

The initial case management conference scheduled for July 28, 2026 CONTINUED to January 14, 2027. No less than 15 days prior to the CMC, the parties shall file a joint CMC statement which either advises the Court of the status of arbitration proceedings, or requests a continuance if the arbitration remains pending.

HOW DO I CONTEST A TENTATIVE RULING?

THROUGH ECOURT

Notify the Court and all the other parties no later than 4:00 p.m. (but by Noon if possible) at least one (1) court day before the scheduled hearing, and briefly identify the issues you wish to argue through the following steps: 1. Log into eCourt Public Portal 2. Case Search 3. Enter the Case Number and select "Search" 4. Select the Case Name 5. Select the Tentative Rulings Tab 6. Select "Click to Contest this Ruling" 7. Enter your Name and Reason for Contesting 8. Select "Proceed"

BY EMAIL Send an email to the DEPARTMENT CLERK and all the other parties no later than 4pm (but by

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV141154: SOHAIL, et al. vs TESLA, INC. 06/02/2026 Hearing on Motion to Compel Arbitration filed by TESLA, INC. (Defendant) CRS# 144185117167 in Department 517 Noon if possible) at least one (1) court day before the scheduled hearing.

BOTH ECOURT AND EMAIL notices are required.

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