Tesla has settled a lawsuit tied to a fatal 2023 crash involving its Full Self-Driving (FSD) driver assistance system. Terms of the settlement were not disclosed, according to Bloomberg, which first reported the news.
The lawsuit was brought by the daughter of Johna Story, a 71-year-old woman who was struck and killed by a Tesla Model Y. Story had stepped out of her own vehicle to direct traffic around an earlier crash caused by sun glare when she was hit. The suit named both Tesla and the driver as defendants.
The crash was among four reported incidents in low-visibility conditions that prompted the National Highway Traffic Safety Administration (NHTSA) to open an investigation into Tesla’s FSD (Supervised) software in 2024. The agency sought to determine whether the system could “detect and respond appropriately to reduced roadway visibility conditions,” including sun glare, fog, and airborne dust.
That investigation was upgraded to an engineering analysis in March 2026. In its report, the NHTSA stated that “available incident data raise concerns that Tesla’s degradation detection system, both as originally deployed and later updated, fails to detect and/or warn the driver appropriately under degraded visibility conditions such as glare and airborne obscurants.”
The settlement resolves the family’s civil case, but the federal investigation remains open. Possible outcomes of that inquiry include a recall of Tesla vehicles equipped with FSD software.
A separate NHTSA investigation into FSD was also opened in October 2025 after reports that the software caused vehicles to run red lights or cross into the wrong lane, adding further regulatory pressure on the company.
Source: TechCrunch