Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D. N.J.: Consumer Fraud Act claims must allege defendant’s certainty of product failure, (Sep 20, 2013)

By Edward L. Puzzo, J.D.

In order to maintain defective product allegations under the New Jersey Consumer Fraud Act, a vehicle lessee must allege that the vehicle lessor knew product failure was a certainty rather than just a possibility, the federal district court in Newark, New Jersey has ruled (Greene v. BMW of North America, September 16, 2013, Martini, W.).

David Greene and a purported class brought various claims against BMW of North America and Bridgestone in connection with allegedly faulty Potenza Run Flat Tires, manufactured by Bridgestone and installed on his leased BMW vehicle.

Certainty versus possibility of product failure. One of Greene’s allegations was a New Jersey Consumer Fraud Act claim, charging BMW with deceiving, misrepresenting, and concealing the fact that the tires were problematic at the time of the vehicle sale. The court ruled that this allegation failed to state a claim under the NJCFA, because it did not allege that BMW knew with certainty that the tires would fail. Where a manufacturer does not know with certainty that its product will fail, it is not a violation of the NJCFA for the manufacturer to fail to inform its consumers that product failure was a possibility, the court ruled. The claim was therefore dismissed, without prejudice.

Fiduciary or special relationship. Greene also alleged that Bridgestone had made fraudulent omissions under the NJCFA. Bridgestone argued that it could not be liable to Greene for omission-based fraud because it did not have a fiduciary relationship with him. Greene responded that there was an “intrinsically fiduciary” relationship that required good faith and full disclosure. The court ruled for Bridgestone, dismissing the claim and stating that the lease of a vehicle with Bridgestone tires did not give rise to a fiduciary relationship, an intrinsically fiduciary relationship, or a special relationship of any kind between Greene and Bridgestone.

The case is Civ. No. 2:11-04220 (WJM).

Attorneys: Barry R. Eichen (Eichen Crutchlow Zaslow & McElroy, LLP) for David Greene. Christopher J. Dalton and Rosemary Joan Bruno (Buchanan, Ingersoll & Rooney, PC) for BMW of North America. Aviva Y. Wein (Herrick Feinstein LLP) for Bridgestone Firestone North American Tire LLC.

Companies: BMW of North America; Bridgestone Firestone North American Tire LLC

Cases: StateUnfairTradePractices NewJerseyNews