BANG v. BMW OF NORTH AMERICA, LLC et al
Filing
45
OPINION. Signed by Judge Madeline C. Arleo on 12/1/2016. (JB, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
JOON BANG, et al., individually and on
behalf of all others similarly situated,
Plaintiffs,
Civil Action No. 15-6945
v.
OPINION
BMW OF NORTH AMERICA, LLC and
BAVARIAN MOTOR WORKS,
Defendants.
THIS MATTER comes before the Court by way of Defendant BMW of North America,
LLC’s (“BMW NA”) motion to dismiss Plaintiffs Joon Bang, et al.’s (“Plaintiffs”) Second
Amended Complaint. Dkt. No. 35. The Court considered the motions without oral argument
pursuant to Federal Rule of Civil Procedure 78 and Local Civil Rule 78.1. For the reasons stated
below, Defendant’s motion is DENIED.
I. BACKGROUND
In this putative class action, Plaintiffs seek damages against BMW NA and Bavarian Motor
Works (“BMW-GER”) 1 (together, “BMW” or “Defendants”) for fraudulently concealing defects
in the engines of certain BMW motor vehicle models that shorten the vehicle’s battery life and
cause increased oil consumption.
1
The Court notes that Defendant Bavarian Motor Works a/k/a Bayerische Motoren Werke
Aktiengesellschaft has not joined in Defendant BMW NA’s motion to dismiss, as it has not yet
been served. BMW NA’s Br. at 1, Dkt. No. 35-1.
1
Defendant BMW-GER is a corporation organized and in existence under the laws of
Germany, with its principal place of business in Munich. Second Amended Complaint (“SAC”) ¶
13, Dkt. No. 32. Defendant BMW NA is a corporation organized and in existence under the laws
of the State of Delaware, with its principal place of business in Woodcliff Lake, New Jersey. Id.
¶ 14. BMW-GER is the parent company of BMW NA. Id. ¶ 13. Defendants are engaged in the
business of importing, assembling, marketing, distributing, and warranting BMW automobiles in
the United States. Id. ¶ 14.
Plaintiffs are individuals who purchased new or used BMW vehicles 2 containing an “N63”
engine (“Class Vehicles”) between September 2011 and February 2015. Id. ¶¶ 5-12. The eight
named Plaintiffs include two residents of California who purchased their vehicles in the state (Joon
Bang and Christopher LeSieur), a resident of Washington who also purchased his vehicle in the
same state (Razvan Victor Bengulescu), a resident of Pennsylvania who purchased his vehicle in
New York (Gerald Bezems), a resident of Missouri who purchased his vehicle in Kansas (Scott
Crockett), a resident of Illinois who purchased his vehicle in Texas (Rifat Gorener), a resident of
Connecticut who also purchased his vehicle there (Lawrence Marcus), and a resident of New York
who purchased his vehicle in New Jersey (Mikhail Suleymanov) (together, “Named Plaintiffs”).
Id. Plaintiffs seek to certify a nationwide class of all persons and entities who have purchased or
leased a Class Vehicle in the United States. Id. ¶ 180. Alternatively, they seek to certify seven
different state classes. 3 Id. ¶ 181.
2
The specific BMW class models are 5 series, 6 series, 7 series, X5, and X6 vehicles from 2009
through 2014. SAC ¶ 1.
3
The putative state classes individuals who purchased Class Vehicles in each of the following
states: New Jersey, California, New York, Washington, Kansas, Texas, and Connecticut. SAC ¶
181.
2
A. Alleged Defects
1. The Oil Consumption Defect
First, Plaintiffs allege that the N63 engine consumes excessive amounts of engine oil,
leading to a need for frequent oil changes “to prevent catastrophic engine damage or failure” (the
“Oil Consumption Defect”). Id. ¶ 38. Engine oil serves an essential function. It lubricates the
moving parts of an internal combustion engine, cleans and seals, and dissipates heat throughout
the engine. Id. ¶ 65. Therefore, the Oil Consumption Defect decreases the lubrication available
to engine parts, which results in premature failure.
Id. ¶ 66. Plaintiffs allege that the Oil
Consumption Defect is a safety concern posing “serious risk of accidents and injury” because “it
prevents the engine from maintaining the proper level of engine oil, and causes voluminous oil
consumption that cannot be reasonably anticipated or predicted.” Id. ¶ 67.
Plaintiffs point to four main sources of information as evidence of the Oil Consumption
Defect. First, they assert that a 2015 study by the publication Consumer Reports indicates that
vehicles containing the N63 engine typically needed more oil between changes than other vehicles
on the market. Id. ¶¶ 40-44. Next, they note that consumer complaints made to the National
Highway and Traffic Safety Administration (“NHTSA”) from as early as May 2013 showed that
some owners of Class Vehicles needed to add oil more often than they anticipated, for instance,
every 500 or 1500 miles. Id. ¶ 48. Third, consumer complaints on online forums also highlight
the defect. Id. ¶ 49. Lastly, they point to BMW-issued Technical Service Bulletins (“TSB”) 4 that
address the Oil Consumption Defect. Id. ¶¶ 52-56. For instance, BMW issued a TSB in June 2013
that stated: “customers with one of the vehicles above may complain that the engine’s oil
4
TSBs are recommended repairs issued by automotive vehicle manufacturers, exclusively directed
toward automotive dealers. Id. ¶ 51, n. 3.
3
consumption is ‘too high,’ resulting in engine oil top-ups and workshop visits.” Id. ¶ 53. Plaintiffs
allege that BMW was aware of the Oil Consumption Defect at least as early as 2008 based on the
above sources of information, as well as testing. Id. ¶ 68.
BMW subsequently offered a few remedial services to affected customers. Id. ¶ 60. They
included: the free replacement of several vehicle components, even if the vehicles were out of
warranty; discounts on new BMW vehicles to replace a defective one; a decrease in the
recommended oil change interval from every 15,000 miles to every 10,000 miles; and vouchers
for $50 worth of BMW accessories. Id. ¶¶ 60-64. Nonetheless, Plaintiffs allege that BMW did not
address the underlying causes of excessive oil consumption, and instead merely instructed service
technicians to add oil in response to consumer complaints. Id. ¶¶ 54, 60.
Plaintiffs allege that BMW failed to disclose the existence of the Oil Consumption Defect.
Id. ¶ 69. As a result, purchasers of Class Vehicles have suffered damages in the form of out-ofpocket expenses such as additional service visits, maintenance costs, and the purchase of BMWapproved engine oil. Id. ¶ 70. Plaintiffs allege that Class Vehicle owners are also discouraged
from traveling long distances because “their vehicles may catastrophically fail and strand them or
potentially cause a life-threatening accident.” Id. Finally, Plaintiffs allege that Class Vehicles
have suffered reputational damage that decreases their resale value. Id.
2. The Battery Defect
Second, Plaintiffs allege that Class Vehicles suffer from premature battery failure (the
“Battery Defect”). Id. ¶ 71. Specifically, the proximity of the turbochargers inside the engine
“causes the additional accumulation of excessive heat,” which requires the fans to run even after
the engine is off, draining the battery. Id. ¶ 72.
4
As with the Oil Consumption Defect, Plaintiffs point to media articles, consumer
complaints in online forums, and BMW-issued TSBs as sources of information on the Battery
Defect. For example, they note a June 2015 article in Road & Track magazine that stated, “BMW’s
N63 twin-turbo V8 happens to chew through batteries.” Id. ¶ 72. In December 2014, BMW issued
a TSB that instructed BMW service representatives to replace N63 vehicle batteries at every oil
change, which applied to BMW X5s produced from April 2010 to June 2013. Id. ¶¶ 76-77. Class
Vehicle owners were to be provided free replacement batteries for the duration of the warranty
period. Id. ¶ 76.
Plaintiffs allege that BMW knew about the Battery Defect “before the sale of Class
Vehicles” through testing and early consumer complaints. Id. ¶ 84. As such, they had a duty to
disclose the defect. Id. ¶ 85. Plaintiffs allege that, upon the warranty expiration, they will need to
replace their batteries “as often as once a year or 10,000 miles, at significant expense.” Id. ¶ 83.
B. BMW’s Warranties and Representations
All Class Vehicles come with a New Vehicle Limited Warranty (the “Warranty”). Id. ¶
86. The warranty protects against “defects in materials or workmanship to the first retail purchaser
and to each subsequent purchaser” for a period of four years or 50,000 miles—whichever comes
first. Id. ¶ 87. Under the warranty, BMW states it “will, without charge for parts or labor, either
repair or replace the defective part(s) using new or authorized remanufactured parts.” Id. It
requires owners and lessees to bring their vehicles to a BWM dealership for warranty repairs. Id.
Plaintiffs allege that the Warranty fails to protect purchases of Class Vehicles from the Oil
Consumption Defect or the Battery Defect because “BMW’s efforts temporarily mask these
conditions instead of providing purchasers with non-defective vehicles as originally warranted.”
Id. ¶ 89. As a result, Class Members are still left with a “defective engine” that consumes excess
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oil after the Warranty expires. Id. ¶ 90. Likewise, vehicle owners must continue to replace the
battery every 10,000 to 20,000 miles for the duration of ownership. Id. ¶ 91.
C. Named Plaintiffs’ Experiences
The SAC describes Named Plaintiffs’ individual experiences. Generally, Named Plaintiffs
learned of the Oil Consumption Defect or Battery Defect shortly after the purchase of their vehicles
when their cars alerted them to “check engine oil” or to check the battery. See id. ¶¶ 102, 128,
136-37, 145, 159, 167. As a result, Named Plaintiffs have had to bring their vehicles to BMW
dealers many times for additional oil and servicing. For example, Plaintiff Bang first brought her
vehicle to the Beverly Hills BMW service center at 2,607 miles regarding her vehicle’s excessive
consumption of engine oil. Id. ¶ 101. She then brought the car back at least seven more times to
address the same problem. Id. ¶ 102-04. Plaintiff Bengulescu’s vehicle “requires an additional
quart of oil approximately every other week.” Id. ¶ 101.
Named Plaintiffs whose cars were under warranty received oil and battery replacements
from BMW pursuant to the warranty. See Id. ¶¶ 101, 112, 121, 129, 146-50, 170. One Plaintiff,
Mr. LeSieur, received replacement component parts, including a vacuum pump, injectors, mass air
flow meters, ventilation pipes, and sensors. Id. ¶ 148. Plaintiff Gorener, who purchased his vehicle
out of warranty, has had to add engine oil on his own on at least 15 occasions since he purchased
his vehicle. Id. ¶ 101. Plaintiffs claim that despite giving BMW several opportunities to cure,
“Defendants have failed to correct the underlying Oil Consumption Defect and Battery Defect.”
Id. ¶¶ 131, 161, 172.
Named Plaintiffs allege that they relied on BMW’s New Vehicle Limited Warranty (the
“Warranty”) when purchasing their vehicles. See Id. ¶¶ 105, 110, 119, 127, 142, 156, 166. They
allege BMW never informed them of either the Oil Consumption Defect nor the Battery Defect,
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and that they would not have purchased their vehicles had they been aware of the defects. See Id.
¶¶ 106-7, 115-16, 132-33, 138-39, 152-53, 162-63, 173-74.
D. Procedural Background
Plaintiffs brought this action on September 18, 2015. Dkt. No. 1. Upon consent, Plaintiff
filed an Amended Complaint in December 2015, and a consolidated Second Amended Complaint
in March 2016. Dkt. Nos. 16, 32. The SAC alleges fourteen causes of action, including: consumer
fraud under the anti-fraud statutes of six states; false advertising under California and New York
law; breach of express warranty; breach of implied warranty; and violations of the MagnussonMoss Warranty Act, 15 U.S.C. § 2301, et seq. SAC ¶¶ 198-371. Plaintiffs seek compensatory and
punitive damages, along with injunctive and declaratory relief. BMW NA subsequently filed a
motion to dismiss all claims pursuant to Fed. R. Civ. P. 12(b)(6).
II. LEGAL STANDARD
In considering a Rule 12(b)(6) motion to dismiss on the pleadings, the Court accepts as
true all of the facts in the complaint and draws all reasonable inferences in favor of the plaintiff.
Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). Dismissal is inappropriate even
where “it appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the
merits.” Id. However, the facts alleged must be “more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007). The allegations in the complaint “must be enough to raise a
right to relief above the speculative level.” Id. Accordingly, a complaint will survive a motion to
dismiss if it provides a sufficient factual basis such that it states a facially plausible claim for relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
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For allegations sounding in fraud, Rule 9(b) imposes a heightened pleading standard. “A
party must state with particularity the circumstances constituting fraud or mistake,” but “[m]alice,
intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R.
Civ. P. 9(b).
III. ANALYSIS
A. Article III Standing
Defendant first argues that all claims should be dismissed because Plaintiffs lack Article
III standing. The Court disagrees.
To establish Article III standing, a plaintiff must allege: (1) an injury in fact; (2) causation;
and (3) redressability. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). BMW NA
argues that Plaintiffs have failed to demonstrate the injury in fact requirement. Def.’s Br. at 9-11.
An injury in fact must be “concrete, particularized, and actual or imminent.” Clapper v. Amnesty
Int’l USA, 133 S. Ct. 1138, 1147 (citations omitted). The injury required for standing purposes is
distinct from damages under a particular theory of liability. See Braden v. Wal–Mart Stores, Inc.,
588 F.3d 585, 591 (8th Cir. 2009) (“It is crucial ... not to conflate Article III’s requirement of injury
in fact with a plaintiff's potential causes of action, for the concepts are not coextensive.”); Cole v.
General Motors Corp., 484 F.3d 717, 722–23 (5th Cir. 2007) (“Whether recovery for such a claim
is permitted under governing law is a separate question; it is sufficient for standing purposes that
the plaintiffs seek recovery for an economic harm that they allege they have suffered.”); Denney
v. Deutsche Bank AG, 443 F.3d 253, 264–65 (2d Cir. 2006) (“[A]n injury-in-fact differs from a
‘legal interest’; an injury-in-fact need not be capable of sustaining a valid cause of action under
applicable tort law.”).
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Here, Plaintiffs have alleged injuries that have already occurred, as well as imminent future
injury. Specifically, all Named Plaintiffs have alleged economic injury in the form of diminished
resale value of their vehicles. In addition, Plaintiffs spent time taking their vehicles to BMW repair
centers. Several Plaintiffs have also incurred out-of-pocket costs to purchase extra oil and
replacement batteries. Accordingly, they have satisfied Article III’s injury in fact requirement.
B. Consumer Fraud
1. Nationwide Class
BMW NA first asserts that Plaintiffs “cannot pursue claims on behalf of a nationwide class
under the NJFCA” because the suit’s sole connection to the forum is that BMW NA is located in
New Jersey. Def.’s Br. at 11-16. Although it is unclear from its brief, BMW NA appears to make
a predominance challenge under Fed. R. Civ. P. 23(b)(3). As such, the Court declines to dismiss
the nationwide class allegations because addressing class certification issues prior to a Rule 23
Motion is premature.
Generally, “‘[d]ismissal of class claims prior to discovery and a motion to certify the class
by plaintiff is the exception rather than the rule,’ and is almost uniformly disfavored.” McGuire
v. BMW of North Am., LLC, 2014 WL 2566132 at *4 (D.N.J. June 6, 2014) (citing Durso v.
Samsung Elecs. Am., Inc., No. 12-05352, 2013 WL 5947005 (D.N.J. Nov. 6, 2013)). Until a class
is certified, the claims of each Named Plaintiff in a putative class action must be examined on an
individual basis. The Court cannot do so for all Plaintiffs here.
Without referencing Rule 23, BMW NA more broadly asks the Court to conclude that the
NJFCA cannot apply “nationwide” because “[c]onflicts exist between the NJCFA and the
consumer-protection laws of other states.” Def.’s Br. at 12. However, such a choice of law
9
analysis requires facts not before the Court. 5 See Maniscalco v. Brother Int’l (USA) Corp., 793
F. Supp. 2d 696, 709 F. 3d 202, 206-07 (3d Cir. 2013) (undertaking a choice of law analysis at the
summary judgment stage); In re Samsung, No. 07-2141, 2009 WL 3584352, at *3 (D.N.J. Oct. 27,
2009) (deferring choice of law issues to class certification stage where facts were insufficient on a
motion to dismiss); In re Mercedes–Benz Tele Aid Contract Litig., 257 F.R.D. 46, 55 (D.N.J. 2009)
(same). compare Cooper v. Samsung Elecs. Am., Inc. 374 F. App’x 250, 255 (3d Cir. 2010)
(resolving choice of law issues at the motion to dismiss stage appropriate only where the district
court has enough factual information).
BMW NA argues that courts in this district have engaged in a choice of law analysis to
dismiss NJCFA claims at a motion to dismiss stage. Def.’s Reply at 4-5 (citing Block v. Jaguar
Land Rover North Am., LLC, No. 15-5957, 2016 WL 3032682, at *3 (D.N.J. May 26, 2016)).
However, in Block, Defendants sought dismissal of one individual defendant’s claims. That is not
5
Federal courts sitting in diversity must apply the choice of law rules of the forum state. Klaxon
Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). New Jersey courts have adopted a twopart “most significant relationship” test to determine which set of laws should apply. Arlandson v.
Hartz Mountain Corp., 792 F. Supp. 2d 691, 699 (D.N.J. 2011). The court must first determine
whether there is an actual conflict between the laws of interested states; if not, the forum state law
applies. If there is a conflict, then the court must weigh the factors set out in the Restatement to
identify which state has the “most significant relationship” to the claim. Id. These factors include:
(a) the place, or places, where the plaintiff acted in reliance upon the defendant’s representations,
(b) the place where the plaintiff received the representations, (c) the place where the defendant
made the representations, (d) the domicile, residence, nationality, place of incorporation and place
of business of the parties, (e) the place where a tangible thing which is the subject of the transaction
between the parties was situated at the time, and (f) the place where the plaintiff is to render
performance under a contract which he has been induced to enter by the false representations of
the defendant. Restatement (Second) of Conflict of Laws § 148. Assuming that a conflict exists
here between the laws of different states, the appropriate analysis on a motion to dismiss would be
to examine which jurisdiction’s laws applies to each of the Named Plaintiffs. No such analysis
was undertaken by Defendant here. In addition, facts before the Court do not permit a thorough
analysis of the Restatement factors for all Plaintiffs. For instance, several Named Plaintiffs reside
in a different state from where they purchased their Class Vehicles. Limited discovery will be
needed to assess Restatement factors such as the location where Plaintiff received representations
and where Plaintiff is to render performance.
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the case here where Defendants seek dismissal against eight different individuals with varyingly
detailed allegations before the Court. Accordingly, the Court will not dismiss Plaintiffs’ class
allegations pursuant to NJFCA at this time.
2. Loss Allegations
BMW NA next asserts that Plaintiffs statutory consumer fraud allegations are deficient on
the merits because they fail to allege loss. The Court is not persuaded.
Generally, a claim for consumer fraud requires allegations of loss. See Bosland v. Warnock
Dodge, Inc., 197 N.J. 543, 557 (2009) (the elements of a New Jersey Consumer Fraud Act claim
are (1) unlawful conduct; (2) an ascertainable loss; and (3) a causal relationship between the
unlawful conduct and the ascertainable loss). 6 Under New Jersey law, an “ascertainable loss” may
consist of out-of-pocket expenses or “a demonstration of loss in value” that is “quantifiable or
measurable.” Thiedemann v. Mercedes–Benz U.S.A., LLC, 183 N.J. 234, 248 (2005). Other states
require less. See, e.g. Meyer, 45 Cal. 4th at 642 (“[W]e interpret broadly . . . that a consumer
suffers any damage to include the infringement of any legal right as defined by section 1770.”).
Here, Plaintiffs have adequately alleged damages. Namely, they allege that their vehicles
are worth less as a result of the Oil Consumption Defect and the Battery Defect. This is a
quantifiable loss. See Marcus v. BMW of North Am. No. 08-5859, 2010 WL 4853308 at *11
6
See Cal. Bus. & Prof. Code §§ 17204, 17535 (permits claims by “any person who has suffered
injury in fact and has lost money or property as a result of such unfair competition”); Meyer v.
Sprint Spectrum L.P., 45 Cal. 4th 634 (2009) (“[I]n order to bring a CLRA action, not only must
a consumer be exposed to an unlawful practice, but some kind of damage must result.”); Frank v.
DaimlerChrysler Corp., 734 N.Y.S. 2d 98 (N.Y. App. Div. 2002) (“plaintiffs must plead actual
injuries or damages, resulting from defendants’ conduct, as an essential element of . . . [New York]
GBL §§ 349 and 350 . . .”) (citations omitted); Sign-O-Lite Signs, Inc. v. DeLaurenti Florists, Inc.,
64 Wash. App. 553, 563-64 (Wash. Ct. App. 1992) (Washington Consumer Protection Act requires
“some evidence, however slight, to show injury to the claimants’ business or property”); Finstad
v. Washburn University of Topeka, 252 Kan. 465, 469 (1993) (“If the students are not aggrieved
by the violation, then they do not have a remedy under K.S.A. 50–634(b).”).
11
(D.N.J. Nov. 19, 2010) (plaintiffs alleged loss where “the class members got less than what they
expected” despite being provided free replacement parts), rev’d on other grounds, Marcus v. BMW
of North Am., 687 F.3d 583 (3d Cir. 2012). A dealer has even offered Plaintiff Bengulescu “half
of what he had paid for the vehicle four months earlier.” SAC ¶ 114. In addition, some Plaintiffs
have alleged out-of-pocket expenses for oil and batteries. Id. ¶¶ 136, 158, 168. Accordingly,
Plaintiffs’ consumer fraud claims cannot be dismissed for failure to allege loss at this time.
3. Breach of Warranty
1. Nationwide Class
BMW NA first argues that Plaintiffs’ breach of warranty claims must be “dismissed”
because they “cannot pursue be a nationwide breach of warranty class action under New Jersey
law or, indeed, the law of any one particular state” since “the UCC is not uniform.” Def.’s Br. at
15-17 (emphasis in original). Like their argument for dismissal of Plaintiffs’ nationwide class
consumer fraud allegations, this again appears to be a predominance argument against class
certification under Rule 23(b)(3). For the reasons stated above, the Court declines to dismiss the
nationwide class allegations at this stage. See supra Part III, B, 1.
2. Breach of Express Warranty
BMW NA argues that Plaintiffs’ breach of express warranty claims must be dismissed
because Defendant fulfilled its obligations under the warranty program “by replacing batteries and
putting oil in [Plaintiffs] vehicles.” Def.’s Br. at 19. Plaintiffs reply that providing replacement
parts was not enough to satisfy BMW’s warranty obligations. Specifically, they allege that
Defendant merely “masked” the Oil Consumption and Battery Defects by refilling engine oil and
replacing batteries, and “did not remedy the underlying defective components.” Pls.’ Br. at 39.
Defendants allegedly continued to breach the Warranty “[e]ach time its authorized service
12
representatives failed to properly repair, replace, or adjust malfunctioning Class Vehicles to a nondefective state.” SAC ¶ 220.
The plain language of the Warranty does not resolve whether refilling oil and replacing
batteries satisfied BMW’s obligations. The Warranty merely states that it protects “against defects
in materials or workmanship.” Id. ¶ 87. Upon receiving notice of a defect, an authorized BMW
dealership “will, without charge for parts or labor, either repair or replace the defective part[s]
using new or authorized remanufactured parts.” Id. Accordingly, whether Defendant fulfilled its
responsibilities under the Warranty is a fact question. See Kuzian v. Electrolux Home Products,
Inc., 937 F. Supp. 2d 599, 612 (D.N.J. 2013) (whether defendant “met the terms of the express
warranty by providing ‘repairs,’ but not actually fixing the alleged defects, cannot be determined
at this motion to dismiss stage”). Dismissal at this stage would be premature.
3. Breach of Implied Warranty
Generally, the implied warranty of merchantability warrants that “goods sold are fit for the
ordinary purposes for which the goods are used.” Nelson v. Nissan North Am., Inc., 894 F. Supp.
2d 558, 566 (D.N.J. 2012) (citing N.J.S.A. § 12A:1-314). 7 As applied to cars, “the implied
warranty of merchantability is simply a guarantee that they will operate in a safe condition and
substantially free of defects [and, therefore,] where a car can provide safe, reliable
7
See also Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962, 979 (C.D. Cal.
2014) (under California law, the implied warranty ensures that goods “are fit for the ordinary
purpose of which such goods are used”); Criscuolo v. Mauro Motors, 754 A. 2d 810, 816 (Conn.
App. Ct. 2000) (under Connecticut law, implied warranty of merchantability holds merchants
liable to the extent their goods fail to conform to ordinary purpose for which they are supposed to
be used); AgriStor Leasing v. Meuli, 634 F. Supp. 1208, 1220 (D. Kan. 1986) (under Kansas law,
“goods must at least be fit for the ordinary purpose for which they are intended”); Reynolds Metals
Co. v. Alcan, Inc., No. 04-175, 2005 WL 2789050 at *2 (W.D. Wash. Oct. 26, 2005)
(“Washington’s implied warranty of merchantability is based on “the concept that goods be
reasonably fit for their usual, intended purpose, i.e., reasonably safe when put to their ordinary use
and reasonably capable of performing their ordinary functions.”).
13
transportation[,] it is generally considered merchantable.” Henderson v. Volvo Cars of N. Am.
LLC, 2010 WL 2925913, at *9 (D.N.J. July 21, 2010) (quoting Carlson v. Gen. Motors Corp.,
883 F.2d 287, 297 (4th Cir. 1989)).
BMW NA asserts that the implied warranty claims must be dismissed because the Class
Vehicles were still merchantable despite the alleged defects because they continued to perform
“their ordinary function of providing transportation.” Def.’s Br. at 19. However, Plaintiffs have
alleged that the Oil Consumption Defect is likely to cause catastrophic engine failure, which may
cause a life-threatening accident.
SAC ¶ 70.
Plaintiffs allege that the defects pose an
unreasonable safety hazard. Id. ¶ 69. Indeed, multiple Named Plaintiffs have experienced severe
mechanical failures, including (1) vehicle break down one day after purchase, (2) a “drivetrain
malfunction” that resulted in reduced acceleration and dynamic stability control malfunction, and
(3) vehicle failure when a battery could not accept a full charge. See id. ¶¶ 136, 149, 159.
Viewing the allegations in the light most favorable to Plaintiffs, the Court finds that Plaintiffs
have stated a claim for breach of implied warranty.
4. Magnuson-Moss Breach of Warranty
The MMWA allows “a consumer who is damaged by the failure of a supplier, warrantor,
or service contractor to comply with any obligation . . . under a written warranty, implied warranty,
or service contract” to bring an action in federal court. 15 U.S.C. § 2310(d)(1). In order to state a
claim under the MMWA, a plaintiff must first establish a claim under an applicable state law.
Cooper v. Samsung Elecs Am., Inc., No. 07-3853, 2008 WL 4513924, at *6 (D.N.J. Sept. 30,
2008), aff’d, 374 F. App’x 250 (3d Cir. 2010). Here, Plaintiffs have stated claims for breach of
express warranty and implied warranty. Therefore, the MMWA count cannot be dismissed at this
time.
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IV. CONCLUSION
For the reasons set forth above, BMW NA’s motion to dismiss, Dkt. No. 35, is DENIED.
An appropriate Order accompanies this Opinion.
Dated: December 1, 2016
/s Madeline Cox Arleo
Hon. Madeline Cox Arleo
UNITED STATES DISTRICT JUDGE
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