Tesla settles lawsuit over fatal Full Self-Driving Arizona crash

Tesla settled a lawsuit tied to the November 28, 2023, death of Johna Story, a 71-year-old Mesa grandmother struck on an Arizona highway after she stepped out of her vehicle to help direct traffic around an earlier crash. The settlement terms were not disclosed, leaving the company’s legal exposure in one fatal case unresolved even as scrutiny of Full Self-Driving continues to widen nationwide.

Story was killed between Flagstaff and Phoenix after sun glare impaired visibility around the earlier accident, and a Tesla Model Y traveling in Full Self-Driving mode hit her at high speed. The crash was the first known pedestrian death linked to Tesla’s Full Self-Driving system, a milestone that sharpened questions about how the company’s driver-assistance software behaves when cameras are challenged by glare, fog or dust.

Those questions have moved far beyond one Arizona road. The National Highway Traffic Safety Administration opened a preliminary evaluation into Tesla’s Full Self-Driving system in October 2024 after Tesla reported four crashes in reduced-visibility conditions, including sun glare, fog and airborne dust. In March 2026, the agency escalated the inquiry to an Engineering Analysis covering an estimated 3.2 million Tesla vehicles from the 2016 through 2024 model years, a step that often comes before a forced recall.

NHTSA has said the system may fail to detect or warn drivers when camera visibility is degraded, and the investigation has expanded to nine incidents, including one fatality and one injury. Tesla has said it changed its cameras and added stricter visibility measures in recent software builds, but the company’s own analysis reportedly indicated the update may have affected only 3 of the 9 crashes.

The settlement lands while Tesla faces broader legal pressure over its automated-driving claims. A Florida jury in 2025 found Tesla partly liable in a separate fatal Autopilot crash and awarded $243 million in damages, a verdict Tesla said it would appeal. Together, the cases show a company still defending individual crashes in court while federal regulators keep pressing on the larger question of whether Full Self-Driving is being monitored, marketed and supervised safely enough for public roads.