Special Master Appointed in Mercedes-Benz Case

(CN) - A special master will handle claims that Mercedes-Benz sells cars with supposedly state-of-the-art rims that warp or fracture, costing consumers millions, a federal judge ruled.

In a putative nationwide class action, Vincent Luppino and others claim that Mercedes-Benz USA LLC and Daimler AG knowingly misrepresented in print, online, and television ads that 17- to 19-inch AMG or non-AMG wheels on vehicles bought from 2006 on are made of a lightweight alloy designed to meet "exceedingly high requirements for strength and durability."

Although the rims can supposedly withstand various difficult on and off-road terrains, including mountain and desert topographies, they are defective, the plaintiffs claim.

A 2006 catalog allegedly says the wheels meet "high standards for safety, dependability and performance - not to mention aesthetics - and make your vehicle even more special."

But the plaintiffs' third amended complaint, filed in the federal court in Newark, N.J. in March 2012, alleges the rims bend, deform, dent, warp, or fracture - even if the driver dodges potholes.

The Montvale, N.J.-based Mercedes-Benz of North America and its German parent company allegedly failed to honor their four-year, 50,000-mile warranty; moreover, by refusing to make any necessary repairs or replacements, they forced consumers to incur a total of $5 million in out-of-pocket costs.

The plaintiffs seek compensatory and treble damages, as well as a tolling of the statute of limitations on claims the automotive giant violated the Magnuson-Moss Warranty Act and the New Jersey Consumer Fraud Act.

After a slew of discovery disputes, U.S. Magistrate Judge Joseph A. Dickson indicated in June that the district court intended to appoint a special master to oversee the process before the class moves for certification.

Mercedes and Daimler objected, arguing that there is no "clear need" to appoint a special master because the court already ruled on all necessary pre-trial discovery matters.

But the plaintiffs contend the defendants' "dilatory conduct" - including their failure to meet on court-ordered discovery and obstructionist litigation tactics - delayed the process.

Last week, nearly four years after the original complaint was filed, U.S. District Judge Dennis Cavanaugh held the appointment of a special master is appropriate, noting that although the magistrate judge issued at least two orders and held at least three conferences, discovery "remains outstanding and/or continues to be hotly disputed."

Cavanaugh noted, "[t]he parties have already submitted over 266 pages of documents respect to which they challenge the confidential designations.

"According to the parties' representations, over 70,000 pages of documents had already been produced in discovery as of November 2012, and the court has no indication how many documents have been designated as confidential by the parties," the judge said. "Thus, the potential scope of designation disputes is immense - particularly in light of the fact that the parties have yet to produce privilege logs (which, the Court notes, is another dispute between the parties).

"Without frequent and intense monitoring, this case will only further languish due to the parties' incessant disputes, to the detriment of all parties involved," Cavanaugh wrote.

The special master will oversee the plaintiffs' acquisition, inspection, and testing of dealership wheels; the discovery of Mercedes' Market Research Aftersales database; and several custodians' depositions, and advise on the appropriateness of document confidentiality, the unpublished opinion states.

Daimler reported about $153 billion in revenue in 2012.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit