(CN) - A federal judge preserved some claims accusing BMW of knowingly selling defective Mini Coopers that develop a "death rattle" indicating premature engine failure.
The lawsuit takes aim at BMW's purportedly false 2004 announcement that the timing chains in Mini Coopers "remain maintenance-free throughout the full running life of the engine," and advertised the high quality of the cars via "aggressive, unconventional marketing."
A group of "second generation" Mini Cooper owners and lessees claimed that, under normal driving conditions, a "death rattle" alerts consumers that they need to replace either the tensioner or the entire N12 or N14 engine in their 2007-10 Cooper Hardtops, 2008-10 Clubmen and 2009-10 convertibles.
Laurie Freeman, of Illinois, said her repeated complaints led BMW to tell her that the loud rattling was "caused by getting gas at 'older' gas stations" or "low oil."
As proof that BMW knew about the defect, the consumers pointed to a technical service bulletin that the company issued on Jan. 1, 2008, which addressed consumer complaints about a rattling noise and warned technicians not to install the allegedly defective tensioner.
They said BMW manipulated the warranty term to ensure the defect would not appear until after the 48-month or 50,000-mile express warranty on Coopers expired.
The named plaintiffs allegedly purchased their vehicles between September 2007 and February 2009 in Illinois, New Jersey and South Carolina. They accused Bayerische Motoren Werk AG, and its North American and U.S. branches, of breach of express and implied warranty and violations of various state consumer fraud laws.
Senior U.S. District Judge William Walls refused on Jan. 24 to deem the service bulletin inadmissible, as it "helps render plausible plaintiffs' allegations that defendants knew with certainty the part would fail. Plaintiffs have also sufficiently alleged that defendants limited the warranty coverage to exploit this fact and that they unconscionably marketed the product to uninformed consumers to maximize profits."
The judge later added: "Plaintiffs have adequately alleged ascertainable loss as well by claiming that their vehicles dropped in value, and that they incurred repair costs which they should not have had to pay."
Relying on a 2009 decision in De Bouse v. Bayer, however, the court dismissed the fraud claims regarding affirmative misstatements. Walls nevertheless gave the plaintiffs 30 days to amend.
"The court recognizes that a purchaser of a new car surely engages in some kind of communication with the dealer and manufacturer of that car, either in the form of advertisements, sales communications or otherwise, and the complaint does identify some 'marketing materials and product manuals,'" the unpublished ruling states. "But Rule 9(b) and De Bouse require a plaintiff to allege the circumstances under which she saw or heard or read those communications and identify them with particularity."
Walls would not toss the New Jersey fraud claims regarding omissions.
"Here, plaintiffs have pleaded that defendants knew about a defect in the timing chain tensioner before or shortly after the plaintiffs purchased their vehicles; that the warranties they provided to plaintiffs failed to disclose this fact; that plaintiffs who reported engine problems, including a loud rattling noise, were told misleading information by defendants or their agents; and that defendants provided this misleading information intentionally to buy time until after they were no longer obligated by the warranty to make the necessary repairs."
Judge Walls later added: "The allegations are plausible and if they are demonstrated to be correct, then the warranties and the negotiations surrounding them were surely unconscionable."
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