Clarifying Accrual and Statute-of-Limitations for GBL §§349–350 Claims: Injury Upon Premium Payment as Trigger

Introduction

The Second Circuit’s summary order in Nachman v. Tesla, Inc., 24-2362 (2d Cir. Apr. 25, 2025), addresses critical questions about when consumer protection claims under New York General Business Law (GBL) §§ 349 and 350 accrue for statute-of-limitations purposes. Plaintiff Michael Nachman purchased a Tesla vehicle on December 31, 2016, paying an $8,000 premium for the “Full Self-Driving Capability” (FSD) package based on representations that a fully autonomous car was “on the cusp” of reality. He filed suit in October 2022—nearly six years later—alleging deceptive advertising and seeking recovery of the premium. The district court dismissed for untimeliness and denied leave to amend. The Second Circuit affirmed, holding that the statute of limitations begins to run at the time the plaintiff sustains the alleged injury (here, the premium payment), not when the promised future event fails to materialize.

Summary of the Judgment

The Second Circuit affirmed the Eastern District of New York’s dismissal of Nachman’s GBL §§ 349 and 350 claims and its denial of leave to amend. Key holdings:

The three-year statute of limitations for GBL §§ 349 and 350 begins to run when the plaintiff is injured by the deceptive act, which in a misrepresentation‐based claim is typically the date of purchase or the date a premium is paid.
The complaint pled only an injury in the form of the premium paid at the time of purchase (December 31, 2016). There was no separate injury pleaded when Tesla failed to deliver full self-driving functionality.
Attempts to equate this case to Gaidon v. Guardian Life Ins. Co.—where accrual was delayed until the insurer demanded additional premiums after eight years—failed because Nachman’s complaint did not plead an ongoing deception or a new premium obligation tied to Tesla’s later non‐performance.
The proposed amendment adding a May 3, 2022 post-purchase “Infotainment Upgrade” could not revive the claim: there was no plausible causal link between Tesla’s prior misrepresentations about autonomous driving and Nachman’s purchase of an infotainment feature, and no injury pled within the limitations period.

Analysis

1. Precedents Cited

Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406 (2d Cir. 2008): Established that a limitations defense may be raised on a Rule 12(b)(6) motion if the bar “appears on the face of the complaint.”
Krys v. Pigott, 749 F.3d 117 (2d Cir. 2014): Reaffirmed de novo review for 12(b)(6) dismissals.
Michael Grecco Prods., Inc. v. RADesign, Inc., 112 F.4th 144 (2d Cir. 2024): Plaintiffs need not anticipate affirmative defenses in the complaint, but a court may dismiss if the complaint on its face shows untimeliness.
Gaidon v. Guardian Life Ins. Co. of Am., 96 N.Y.2d 201 (2001): Held that a GBL claim accrues when the insurance company demands additional premiums beyond its advertised eight-year window, as the consumers were “first called upon” to pay unexpected premiums.
Corsello v. Verizon N.Y., Inc., 18 N.Y.3d 777 (2012): Clarified that for future-event misrepresentations, the accrual date may be delayed until the promised event fails to occur and causes injury.
Stutman v. Chemical Bank, 95 N.Y.2d 24 (2000) and Koch v. Acker, Merrall & Condit Co., 18 N.Y.3d 940 (2012): Articulated that to state a GBL §§ 349/350 claim, a plaintiff must show a material deceptive act that caused injury, though no separate element of “justifiable reliance” is required.

2. Legal Reasoning

The court focused on the nature of the injury alleged. Nachman’s complaint pled only that he paid a premium at purchase because of Tesla’s misrepresentations. Under Gaidon and its progeny, that premium payment itself is the actionable injury and therefore the trigger for the limitations period. Unlike Gaidon, however, where the insurers’ ongoing deception gave rise to additional premium demands—and thus new injuries—Tesla did not demand any new payments tied directly to its failure to deliver full self-driving features. The mere disappointment of unmet future expectations is not an independent injury unless the complaint alleges a new, measurable harm (e.g., additional fees, loss sustained, or services withheld) that occurred within the statutory window.

The Infotainment Upgrade purchase in May 2022 was offered as a vehicle for resurrecting the claim, but the court found no nexus between Tesla’s 2014–2016 FSD timeline statements and the later upgrade. Nothing in the purchase told Nachman that he was paying to resolve the unmet promise of autonomy; rather, the upgrade related to entertainment and visualization features, which is too attenuated to constitute the requisite causation for a GBL claim. Because amendment would not cure the statute-of-limitations defect, it was properly denied as futile.

3. Potential Impact

This decision underscores that in GBL § 349/350 cases, plaintiffs must identify a tangible injury within three years of filing—often the date of purchase when a premium is paid.
Where deceptive statements concern future events, courts will look for a discrete, quantifiable harm occurring when those future events fail. Absent that, disappointment alone will not suffice to extend accrual.
Defendants can successfully invoke the statute of limitations at the pleading stage when the complaint facially shows untimeliness, tightening the window for consumer suits based on advertising claims.
The ruling may limit class actions targeting long-promised but undelivered features or technologies, particularly in the tech and auto sectors, unless plaintiffs can tie new or recurring charges to the deception within three years.

Complex Concepts Simplified

GBL §§ 349 and 350: New York statutes prohibiting deceptive acts (§ 349) and false advertising (§ 350) in any business, trade or commerce.
Accrual Rule: A claim “accrues” when the plaintiff sustains an injury from the deceptive act. The three-year limitations period runs from that date.
Stature of Limitations Defense on Rule 12(b)(6): Although generally an affirmative defense, courts may dismiss claims at the pleading stage if the complaint and judicially noticeable facts establish untimeliness.
Full Self-Driving Capability (FSD): Tesla’s optional software package promising advanced driver assistance and, ultimately, full autonomy.
Infotainment Upgrade: A post-purchase feature package providing enhanced media, gaming and “driving visualization” interfaces—distinct from core driving functionality.

Conclusion

Nachman v. Tesla clarifies that under New York General Business Law, a consumer’s GBL §§ 349/350 claims accrue when the plaintiff suffers a measurable injury—commonly the payment of a premium at purchase. Promises of future enhancements do not toll accrual absent a new, discrete injury tied to unmet expectations. This decision provides guidance to both plaintiffs and defense counsel about the timing of filings in deceptive advertising cases and reinforces the importance of pleading a concrete injury within the statutory period.