Antitrust Law Daily Wrap Up, ADVERTISING—D. N.J.: Class action misrepresentation claims against BMW dismissed, (Jan 28, 2016)

By Michael Menzhuber, J.D., LL.M.

A consumer’s Magnuson-Moss Warranty Act claims, which were based on allegations that BMW misled its customers by describing its single engine turbo engine vehicles as “TwinPower Turbo” vehicles, were allowed to proceed, the federal district court in Newark, New Jersey has decided. Additionally, the court determined that the consumer had standing to represent class members who purchased a different BMW model vehicle than he purchased (Bedi v. BMW of North America, LLC, January 27, 2016, Arleo, M.).

Deepkarn Singh Bedi, a California resident, leased a 2013 BMW 335i vehicle from an authorized BMW dealership located in California. The vehicle was described by BMW as “TwinPower Turbo”. The term “Twin Turbo” is known in the marketplace to refer to a vehicle with two engines. Based on BMW’s description of the vehicle as “TwinPower Turbo”, Bedi believed that the vehicle he leased had twin turbo engines. However, BMW’s invented term, “TwinPower Turbo”, was used to describe both single and twin turbocharger engine vehicles and the vehicle leased by Bedi only had a single engine.

Bedi brought a class action suit against BMW of North America, LLC that alleged a violation of the Magnuson-Moss Warranty Act (MMWA). The suit also alleged state law claims for false advertising and unfair competition in violation of the New Jersey Consumer Fraud Act (NJCFA) and California’s Consumers Legal Remedies Act (CLRA). BMW responded by filing a motion to dismiss.

Consumer fraud claims. BMW argued that California law, not New Jersey law, should apply to the consumer fraud claims. The court agreed and determined that: (1) there was a conflict between the two states’ laws because California consumer protection laws required a show of reliance while the NJCFA did not; (2) there was no dispute about the facts relevant to a choice of law analysis. Also, California had the most significant relationship because Bedi was a California resident, he received the representations regarding the vehicle in California, he acted in reliance on the representations in California, the vehicle was located in California, and he was performing under the lease in California. Consequently, the court dismissed the NJCFA claim.

Magnuson-Moss Act (MMA). However, the court declined to dismiss the MMWA because Bedi identified the term, “TwinPower Turbo” as a warranty that the vehicle would have two turbochargers, which perform objectively and measurably better than the single turbocharger engine that he actually received.

Scope of class. Finally, the court declined to limit Bedi’s standing to represent those members of a class who purchased the actual vehicle model that he leased. It noted that: (1) the basis for the claims was the same because the BMW’s alleged misrepresentation of Bedi’s vehicle was identical across all BMW vehicles included in the class; (2) the products were closely related because they were all sold or leased by BMW; and (3) the defendant for all of the products was BMW.

The case is No. 15-1898.

Attorneys: James C. Shah (Shepherd, Finkelman, Miller & Shah, LLP) for Deepkarn Singh Bedi. Christopher J. Dalton (Buchanan, Ingersoll & Rooney, PC) for BMW of North America, LLC.

Companies: BMW of North America, LLC

Cases: Advertising ConsumerProtection StateUnfairTradePractices NewJerseyNews