As Tesla Solar Roof customers file another lawsuit, California is set to decide whether to combine them into a single class-action complaint

Tesla CEO Elon Musk with a hardhat.JPG
Tesla CEO Elon Musk in Germany this week.

A California judge will decide whether two complaints filed against Tesla will be combined into a single lawsuit, as plaintiffs across the US pursue a class action over Solar Roof price hikes.

Eight Tesla customers this week filed a complaint in US District Court in the Northern District of California, alleging the company violated California law by increasing the price after they’d signed contracts.

The complaint said Tesla’s actions were a “classic bait-and-switch,” increasing the agreed-upon price for each customer’s Solar Roofs and energy-storage batteries, called Powerwalls.

The filing marked the second California lawsuit against Tesla to seek class-action status in as many weeks. Homeowners around the country have spoken out about Tesla unilaterally raising their prices. Many of those homeowners have had difficulty getting customer service support after their prices were altered.

Tesla did not respond to an email seeking comment.

Judge Lucy H. Koh will decide whether to combine the two cases, according to a court order filed this week after the second California lawsuit.

That order was to be expected, since the cases were similar, said Brian Fitzpatrick, a professor at Vanderbilt Law School and author of “The Conservative Case for Class Actions.” Otherwise, he added, “multiple judges could end up reinventing wheels in similar cases.”

He said he expected the cases to be consolidated, after which there would be a “rigorous” process of discovery. Only then would a judge decide whether the case fits the requirements for class-action status.

“I doubt these cases will get to that point for at least another year,” Fitzpatrick said after reviewing the most recent filings.

A Solar Roof and Tesla Powerwall in 2016.JPG
A Solar Roof and Tesla Powerwall.

The two California complaints came after a similar complaint was filed by a couple in New Hope, Pennsylvania. They said their contract had been increased to $78,352.66 from the original $46,084.80. Each of the three complaints sought class-action status.

The Pennsylvania couple’s attorney, Peter Muhic, of LeVan Muhic Stapleton, is also co-counsel on the new filing in California.

“We seek nationwide relief,” he said via email, noting that the suits included plaintiffs from California, Florida, Massachusetts, New Jersey, New York, and Pennsylvania.

In the newest complaint, the homeowners said Tesla raised the prices of their contracts – most by more than 50% – after they’d been signed. Tesla also told customers they would “risk losing their place in line” for an installation they didn’t “pay promptly,” according to the complaint.

One of the plaintiffs, Mattias Astrom, placed an original order in 2017 for a Solar Roof for his home in Lexington, Massachusetts. The complaint said he paid a $1,000 deposit, then waited three years for an installation. He cancelled the order in December 2020 without getting the roof.

Astrom entered a new order in January 2021, with a $100 deposit against a full price of $150,013, according to the complaint. In April 2021, he received an email from Tesla saying his price had been increased 52% to $228,008.

In Fullerton, California, Sol Kim signed a contract for a $39,658.44 project in February 2021. He refinanced his mortgage to fund the project. In April 2021, Kim got an email saying the price had increased to $52,337.30.

The Tesla project manager working with Kim told him that it “was a company-wide update to the pricing structure,” according to the complaint.

Tesla CEO Elon Musk in April addressed customer concerns, saying: “We did find that we basically made some significant mistakes in assessment of difficulty of certain roofs.”

In the complaint filed on Tuesday, the plaintiffs said the company used several methods to determine their roofs’ complexity during the ordering process.

The customers first plugged information about their homes into a Tesla website, then Tesla used a combination of aerial photos and on-site visits to identify “anomalies or unique shapes.” After that, the contract would be drawn up and signed, according to the complaint.

In Roslyn Heights, New York, Anupama Vivek paid a $1,000 deposit for a Solar Roof in April 2020.

In March 2021, Tesla notified Vivek that there would be a new $4,214 charge for roof preparation and pre-construction costs, bringing her total contract to $58,805.48, according to the complaint.

Less than a month later, the company increased the price to $77,333.03, according to the court filing.

The complaint said the company “knowingly marketed, advertised, and promised to provide and install its Solar Roof systems at prices that the company knew it would not honor and on delivery dates the company knew it could not meet.”

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A former shoe company CFO admitted to siphoning $30 million to pay for diamonds and flights to tropical vacations

money
  • The former CFO of a Massachusetts shoe company pleaded guilty to a $30 million embezzlement scheme.
  • 64-year-old Richard Hajjar bought private flights to the Caribbean and diamonds with the money.
  • The company, Alden Shoe Co., terminated Hajjar in October 2019.
  • See more stories on Insider’s business page.

The former chief financial officer of a Massachusetts shoe company pleaded guilty to embezzling $30 million from the business over the course of several years, according to a statement from the Department of Justice.

When 64-year-old Richard Hajjar was the CFO for Alden Shoe Co., he wrote checks to himself from the company and transferred business funds to his personal accounts, the DOJ said.

He used the money to “enrich himself” by buying “gifts and luxury travel for others close to him, including private flights to the Caribbean and diamond jewelry,” the Wednesday statement said.

In a civil lawsuit from Alden, the company said Hajjar spent some of the money on Bianca de la Garza, a Boston-based news anchor whom he’d developed a romantic relationship with at the time.

“They vacationed together often. And Mr. Hajjar purchased gifts for Ms. de la Garza worth hundreds of thousands of dollars,” the lawsuit filed in Suffolk County Superior Court read.

In total, Hajjar transferred about half, or $15 million, of the embezzled funds to de la Garza, and at one point purchased her a million-dollar co-op in New York City.

The scheme lasted from about 2011 to October 2019, when the company terminated him. Alden, a 137-year-old family-owned luxury men’s shoe-maker, did not respond to Insider’s request for comment on the story.

Read more: A crypto exec listed Goldman, Lending Club and RBC on his resume. A bankruptcy examiner claims he’s a prison escapee.

Before being terminated, Hajjar was Alden’s vice president and corporate secretary, a member of the board of directors, and the CFO.

According to the civil lawsuit, Hajjar worked at Alden for 30 years and became “a trusted advisor to the Tarlow family and a key employee at Alden.”

His lead attorney, Daniel Conley, of the Boston law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC, said Hajjar had more than just an employee-employer relationship with the company.

“He’s remorseful, very remorseful, and has accepted full responsibility for his actions,” Conley said to Insider Friday.

In the criminal case against him, Hajjar pleaded guilty to wire fraud, unlawful monetary transactions, and filing a false tax return, in which he didn’t claim the income from the embezzled funds. The charges come with 20-, 10-, and 3-year prison sentences, respectively, along with fines, according to the Justice Department statement.

The court, however, has conditionally accepted a range of 48 to 72 months in federal prison, which the judge will consider at the sentencing hearing on Sept. 15.

Conley said he’s hopeful that in sentencing the judge “considers the fact that Mr. Hajjar accepted full responsibility, is very sorry for his actions, and has returned millions of dollars,” totaling $4.5 million.

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