Taylor v. Salem Leasing Corporation et al

On March 27, 2026, in Los Angeles, California, Jamie Taylor leased a sedan equipped with a semi-autonomous driving aid from Salem Leasing Corporation. During a trip, the vehicle's automatic emergency braking and lane-keeping systems disengaged without warning due to an expired software license that Salem Leasing failed to renew, despite multiple prompts from AutoGuard Technologies. The car crossed into oncoming traffic, causing a collision that left Taylor with spinal injuries. Taylor filed suit, alleging that Salem Leasing knowingly rented a vehicle with deactivated safety features to cut costs and that AutoGuard designed a system that could abruptly revert to manual mode without adequate fail-safes. The lawsuit seeks compensatory and punitive damages, accusing both defendants of gross negligence and fraudulent concealment of the vehicle's true condition.

As of June 2026, the U.S. District Court for the Central District of California denied Salem Leasing's motion to dismiss, ruling that the lessor had a duty of reasonable care that extends to software updates essential for vehicle safety. The court certified the case as a class action on behalf of all individuals who leased vehicles with deactivated safety features from Salem Leasing. A trial date is set for early 2027.

The central dispute is whether a leasing company owes a non-delegable duty to maintain and update critical safety software in its fleet, and whether a pay-to-activate safety feature model inherently misleads consumers and creates an unreasonable risk of catastrophic failure. The case also examines if the manufacturer shares liability for allowing safety systems to be deactivated through non-payment after integration into a vehicle.

The case triggered an emergency order from the California Department of Motor Vehicles requiring all leasing companies to immediately verify the operational status of safety software in their fleets. It ignited a national consumer alert and prompted federal lawmakers to introduce the "Connected Vehicle Safety Transparency Act," which would ban subscription-based functional safety features and mandate clear disclosure of software dependencies. The incident sharply eroded public trust in usage-based safety models and accelerated demands for regulatory oversight of over-the-air vehicle software.