Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D.N.J.: MINI Cooper purchasers, BMW settle misrepresentation claims, (Jan 7, 2016)

By Greg Hammond, J.D.

A class of owners or lessees of MINI Cooper vehicles has obtained preliminary approval of a class action settlement that could dispose of claims that the automobile maker made a number of misrepresentations and omissions, in violation of various state consumer protection and unfair trade practices laws. In granting preliminary approval, the federal district court in Newark determined that the proposed $30 million settlement lacks obvious deficiencies and appears reasonable (Skeen v. BMW of North America, LLC, January 6, 2015, Walls, W.).

MINI Cooper purchasers alleged a problem with the timing chain tensioner, which purportedly caused a loud noise and eventually required replacement of that part or the entire engine. The purchasers further claimed that BMW of North America, LLC, BMW US Holding Corp., and Bayerische Motorenwerke Aktiengesellschaft made various misrepresentations and omissions with regard to the sales and marketing of the vehicles, constituting violations of various state consumer protection and unfair trade practices laws, violations of the Magnuson-Moss Warranty Act, as well as breach of express and implied warranty.

The settlement would effectively: (1) extend the warranty for the timing-chain tensioner and timing chain for seven years or 100,000 miles from the date when the vehicle was first placed into service, subject to certain exceptions; (2) provide for the reimbursement for out-of-pocket expenses incurred before the settlement date for repair or replacement of the parts at issue, subject to limitations; (3) provide certain reimbursements of out-of-pocket expenses incurred prior to the settlement date for the repair or replacement of an engine due to the timing-chain tensioner or timing chain failure; and (4) provide compensation of up to $2,250 to class members who had to sell their vehicles at a loss before the effective settlement date due to an unrepaired, damaged, or failed engine caused by the alleged defective parts.

Fair, reasonable and adequate settlement. The court first determined that the standards for preliminary approval were met in this case because the settlement is the product of arms’ length negotiations; the settlement negotiations occurred after extensive investigation by plaintiffs’ counsel, after the exchange of initial disclosures, and after counsel consulted extensively with an independent automotive expert; the parties reached the settlement after mediation and other settlement discussions; and the settlement terms also appeared to be reasonable.

Class certification. The court also granted conditional certification of the settlement class, which includes all persons or entities in the United States, the District of Columbia, and Puerto Rico who currently own or lease, or previously owned or leased, a model-year 2007 through 2009 MINI Cooper ‘S’ Clubman (R55), or a model-year 2009 through 2010 MINI Cooper ‘S’ Convertible (R57) vehicle, manufactured at any time from start of production in November 2006 through July 2010.

The proposed class, according to the court, met the requirements of Federal Rules of Civil Procedure 23(a). In addition, the predominance requirement of Rule 23(b) was met because all of the claims turn on (1) whether BMW knew or should have known that the vehicles contained the alleged defect when it placed them into the stream of commerce; (2) whether BMW has a duty to honor its warranty on the class vehicles; and (3) whether BMW, in refusing to honor the class vehicles’ warranty, violated applicable federal and state consumer protection laws. Lastly, the court found that class action is the superior method of adjudicating the class’ claims.

The case is No. 2:13-cv-1531-WHW-CLW.

Attorneys: Jeffrey Alan Koncius (Kiesel Larson LLP) for Joshua Skeen. Christopher J. Dalton (Buchanan, Ingersoll & Rooney, PC) for BMW of North America, LLC, BMW US Holding Corp. and Bayerische Motorenwerke Aktiengesellschaft.

Companies: BMW of North America, LLC; BMW US Holding Corp.; Bayerische Motorenwerke Aktiengesellschaft

Cases: ConsumerProtection StateUnfairTradePractices NewJerseyNews