Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—M.D. Fla.: Overstatement of Mini Cooper’s fuel economy not sufficient basis for action, (May 12, 2015)

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

A couple’s putative class action complaint against BMW of North America, which alleged misrepresentation of the Mini Cooper’s fuel economy in violation of Florida and New Jersey state unfair trade practices laws, was dismissed by the federal district court in Fort Myers, Florida. The court also dismissed the couple’s motion for class certification, appointment of class representatives, and appointment of class counsel (Jarvis v. BMW of North America, LLC, May 11, 2015, Steele, J.).

BMW of North America, LLC (BMW) manufactured the Mini Cooper automobile and made representations, in its print and on-line marketing materials, about the number of miles per gallon that could be expected for city, highway, and combined driving. Allegedly in reliance on these representations, Karen and Michael Jarvis purchased a Mini Cooper 3-door automobile with semi-automatic transmission from a Mini Cooper dealer in Fort Myers, Florida.

A few months after the purchase, the United States Department of Environmental Protection (EPA) conducted a fuel economy audit on the Mini Cooper and obtained values different than what BMW had submitted for certification. BMW conducted a new emissions and fuel economy testing, which resulted in the miles per gallon for city, highway and combined driving each being one mile lower than had previously been represented.

The couple alleged that BMW’s fuel economy testing methods were inadequate and inaccurate, which resulted in the Mini Cooper’s fuel economy being artificially high, and that BMW should have known that its fuel economy representations were overstated. They further alleged that they were damaged by the misrepresentations because they were misled into purchasing a lesser qualify Mini Cooper than what had been promised.

The couple filed a putative class action complaint against BMW which alleged: (1) violation of the Magnuson-Moss Warranty Act; (2) breach of express warranty; (3) breach of implied warranty of merchantability; (4) unjust enrichment; (5) violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA); (6) violation of the New Jersey Consumer Fraud Act; (7) negligent misrepresentation; and (8) fraud.

In addition to asserting that the couple’s class action allegations should be dismissed, BMW sought to dismiss the couple’s complaint on the grounds that: (1) EPA estimates are not guarantees; (2) the couple’s claims were preempted by the Federal Trade Commission (FTC) regulations; (3) the fraud-based claims were not pled with adequate specificity; (4) the claim for unjust enrichment was duplicative of the couple’s other claims; (5) the FDUTPA claim was exempt from FDUTPA coverage; (6) the New Jersey Consumer Fraud Act did not apply to Florida residents; and (7) the couple was not in privity with BMW.

Fuel Economy Disclosure. The court noted that: (1) 49 U.S.C. § 32908(b) requires an automobile manufacturer to attach a label (“Monroney” sticker) on every new vehicle that details, among other things, the vehicle’s fuel economy; and (2) 49 U.S.C. § 32908(d) provides that a disclosure about a vehicle’s fuel economy does not establish a warranty under either federal or state law.

The court further noted that the provisions of 49 U.S.C. § 32908 apply only to Monroney stickers and that FTC regulations govern that advertising of the EPA’s estimated fuel economy for all new automobiles. These regulations require, when advertising a new vehicle’s mpg, that the EPA mpg estimates must be included, that there be a statement that the miles per gallon show are estimates, and that the EPA is the source of the estimates.

The court, therefore, determined that disclosure of a vehicle’s fuel economy, either on a Monroney sticker or in an advertisement, cannot serve as a basis for a claim against a manufacturer provided that the manufacturer complies with the relevant disclosure requirement. Because the couple’s complaint did not clearly alleged that BMW failed to comply with the applicable law, the court dismissed the complaint.

The case is No. 2:14-cv-654-FtM-29CM

Attorneys: Scott A. Bursor (Bursor & Fisher, PA) for Karen Jarvis, and Michael Jarvis. Mark C. Anderson (Buchanan Ingersoll & Rooney, PC | Fowler White Boggs) for BMW of North America, LLC.

Companies: BMW of North America, LLC

Cases: Advertising StateUnfairTradePractices FloridaNews