Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES NEWS: BMW owners file class action for damages arising out of faulty navigation systems, (Aug 22, 2013)

By Pamela C. Maloney, J.D.

A New Jersey resident filed a federal class action lawsuit against BMW of North America alleging that its vehicle navigation system, which was offered as an optional feature at the time of sale, was defective and subject to failure and malfunction (Morris v. BMW of North America, LLC, filed August 19, 2013, Fitzsimmons, H.).

The complaint asserted claims under both federal and state consumer protection and/or warranty statutes, including the New Jersey Consumer Fraud Act and the Magnuson-Moss Warranty Act, as well as claims for breach of express and implied warranty under New Jersey law. The complaint also pled, in the alternative, violations of Nevada law.

Background. The class action was filed on behalf of all current and former owners and lessees of 2012 and 2013 BMW motor vehicles equipped with the original manufacturer’s BMW Navigation System. The navigation system was offered as an optional feature that was selected and paid for by the purchaser or lessee at an additional cost of $1,800 or more. The plaintiff alleged that BMW concealed material facts concerning the design, manufacture, performance history, and propensity for failure and malfunction of the navigation system during its distribution, marketing, sale, advertising, and performance of customer service.

Factual allegations. According to the complaint, a defect in the navigation system caused it to be prone to failure and malfunction. Specifically, the system consistently generated incorrect directions, identified the wrong current locations, did not locate streets and/or addresses, and would reset suddenly, among many other problems. The complaint went on to allege that BMW knew that the navigation system was defective based upon its own testing, industry testing, and the consumer and dealer complaints it received. Furthermore, the complaint stated that BMW knew that there was no fix that would have eliminated or substantially reduced the system’s failures and malfunctions. The failure to disclose the problems with the system posed serious safety risks resulting from driving with an unreliable system that directed drivers to unsafe terrain or hazardous road conditions, distracted or confused drivers, or otherwise suddenly failed to work properly or function at all, thus placing drivers at a greater risk of accidents. The complaint further stated that the class members reasonably expected that, in the case of malfunction or failure, BMW would fix or replace the system pursuant to the vehicle warranty. Finally, it was alleged that had BMW disclosed the information, the class members would not have purchased the system.

Damages sought. According to the complaint, BMW’s failure to disclose the information regarding the navigation system’s propensity to fail and malfunction imposed significant out-of-pocket expenses on the plaintiff and the class members, including the amount spent to purchase the navigation system as well as the diminution in value of the vehicles resulting from the installation of a defective system. The class sought recovery of all compensatory and other damages, an injunction against BMW, and attorneys’ fees and costs.

The case number is: 2:13-cv-04980-CCC-JAD.

Attorneys: James C. Shah (Shepherd, Finkelman, Miller & Shah, LLP) for Morris. Companies: BMW of North America, LLC.

News: StateUnfairTradePractices NewJerseyNews