Tesla has resolved a lawsuit brought over a fatal 2023 crash involving its Full Self-Driving system, according to a report published July 1, 2026 by Claims Journal. The collision killed 71 year old Johna Story, who had stepped out of her vehicle on an Arizona highway to help direct traffic around cars that had already crashed in blinding sun glare. She was struck at high speed by a Tesla Model Y operating with Full Self-Driving engaged. Her death was the first known pedestrian fatality linked to Tesla automation technology.
Story's daughter sued Tesla and the driver of the Model Y. Attorney Dustin Birch, who represents the daughter, said in an interview that the case recently settled. Terms of the settlement were not disclosed, and an attorney for Tesla did not respond to requests for comment.
The crash also triggered a federal review. The National Highway Traffic Safety Administration opened an investigation in 2024 into whether Full Self-Driving poses an unacceptable safety risk, then escalated the matter this year to an engineering analysis. The agency said Tesla systems did not detect common roadway conditions that impaired camera visibility until immediately before a crash. Its review of Tesla responses identified additional crashes in similar environments where the software failed to register a degraded state or gave the driver too little time to react. In each of those crashes, the system lost track of or never detected a lead vehicle in its path.
Tesla executives said on an April earnings call that the company changed cameras on older vehicles to address the visibility issue and that it continues to work with the regulator.
Source: Claims Journal - https://www.claimsjournal.com/news/national/2026/07/01/338495.htm