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Gerald Oscar v. Bmw of North America

June 7, 2011

GERALD OSCAR, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
BMW OF NORTH AMERICA, LLC, DEFENDANT.



The opinion of the court was delivered by: Richard J. Holwell, District Judge:

MEMORANDUM OPINION AND ORDER

Gerarld Oscar ("Oscar") brings this putative class action against BMW of North America, LLC ("BMW") alleging that the Goodyear run-flat tires ("RFTs") with which his 2006 MINI Cooper S was equipped were defective. He brings suit under New York law for breach of contract, breach of express warranty, breach of implied warranty, deceptive business practices under N.Y. Gen. Bus. Law § 349, and false advertising under N.Y. Gen. Bus. Law § 350. He also brings suit under the Magnuson-Moss Warranty Act ("MMWA"), 15 U.S.C. § 2301 et seq., for breach of implied warranty. Oscar moved for class certification on August 30, 2010. He proposes to certify a nationwide class and a New York sub-class of consumers who bought or leased a MINI with Goodyear RFTs between 2005 and 2009. On January 31, 2011, the Court heard oral argument on this matter. For the reasons set forth below, Oscar's motion for class certification is DENIED.

FACTUAL BACKGROUND

Oscar purchased his new 2006 MINI Cooper S from BMW/MINI of Manhattan, an authorized MINI dealership, on January 5, 2006. (Pl.'s Ex. 2.) Prior to purchasing the MINI, Oscar did not do any sort of research (Oscar Dep. 36), nor did he take the car for a test drive (id. 38). Oscar did notice a $600 charge listed on the window sticker for RFTs. (Id. 45-46.) He asked the salesperson what the charge was for, and she informed him that it was for RFTs, an innovation that allowed drivers to drive to the nearest service station even after the tire was flat. (Id. 46.) As of December 2, 2009, a period of about three years, Oscar had had five flat tires. (Id. 25.) Oscar has provided service records for one of these incidents indicating that the cost, including labor, to replace the tire was approximately $400. (Pl.'s Ex. 3.)

Oscar believes that his troubles stemmed in large part from the fact that his car was equipped with RFTs rather than with standard radial tires. Whereas Oscar paid $400 on one occasion to replace an RFT, radial tires can cost approximately $100 each. (Pl.'s Ex. 10.) Oscar has also found the RFTs to be difficult to come by, meaning that replacing an RFT is inconvenient. (Oscar Dep. 25.) He was also disappointed to find that although the car was equipped with a jack, the car did not come with a spare tire. (Id. 24.) He also considers the number of flat tires he experienced to be evidence of a widespread defect.

No one alerted Oscar to these alleged defects before he purchased the car. For example, a 2005 MINI advertisement describes the RFTs as follows: RUN FLAT TECHNOLOGY: With available run-flat tires (1) you can drive up to 80 miles at 50 mph on a "flat" tire. The flat tire monitor (2) alerts the driver the moment a tire's revolution rate changes, indicating that tire integrity has been compromised.

(Pl.'s Ex. 12.) The advertisement does not disclose that RFTs are allegedly less durable than standard tires. MINI also has a policy that Oscar characterizes as a prohibition against repairing MINI RFTs. This advice can be found in the owner's manual and reads: "For safety reasons, the manufacturer of your MINI recommends having Run Flat tires replaced, not repaired if they are damaged." (Pl.'s Ex. 10.)

Several journalists have described the fragility of RFTs. A Wall Street Journal article reported that "[m]ost run-flats are really high-performance tires and as such have higher prices and shorter tread life than typical mass-market tires." Jonathan Welsch, Puncturing the $200 Tire-Drivers Fault Cost, Durability of Tires that Don't Go Flat; Factoring in the Safety Issue, WALL ST. J., July 24, 2007, at D1. Oscar has also produced a Road & Track customer survey that revealed that MINI drivers complained that MINI's tires needed frequent replacement and were expensive. Peter Bohr, Owner Survey: 2002-2005Mini Cooper & Cooper S: Odes of Joy Mask Loads of Woe, ROAD & TRACK, February 2006, available at http://www.roadandtrack.com/tests/long-tests/owner-survey-2002-2005-mini-cooper-cooper-s. The article surveyed owners who purchased MINIs of model years 2002-2005, but was weighted toward earlier years, whereas the class period runs from 2005-2009. Id. J.D. Power and Associates also surveyed MINI owners and found that, based on an undefined "small sample," a substantial number experienced tire punctures within two years of purchase over the class period. These numbers ranged from a low of 11.3% to 41.2% of vehicle owners depending on the year.*fn1

(Pl.'s Ex. 15). None of these sources document whether Goodyear RFTs specifically suffered from these defects. According to a Goodyear press release, 80% of MINIs imported to the US were equipped with either Goodyear or Dunlop tires in 2002.*fn2 (Pl.'s Ex. 20.)

PROCEDURAL BACKGROUND

Oscar filed this suit on January 5, 2009 against BMW and Goodyear Tire & Rubber Company, Inc. ("Goodyear"). On June 5, 2009, BMW moved to dismiss certain counts of Oscar's complaint, and Goodyear moved to dismiss the complaint against Goodyear in its entirety. Ruling from the bench on March 15, 2010, the Court granted Goodyear's motion to dismiss and denied BMW's. One of the arguments that both Goodyear and BMW raised was that Oscar did not properly allege privity of contract, which is necessary for a New York breach of implied warranty claim. The Court held that Oscar had not properly pleaded privity with Goodyear, but had properly pleaded privity with BMW by alleging that the MINI dealer from which Oscar purchased his car was acting as BMW's agent. (Motion to Dismiss Hr'g Tr. 34: 11-16 Mar. 15, 2010.)

Oscar now moves to certify the following nationwide class and New York sub-class pursuant to Rule 23(a) and (b)(3): Nationwide Class:

All consumers who purchased or leased new 2005, 2006, 2007, 2008, and 2009 MINI vehicles equipped with Run-Flat Extended Mobility Technology tires manufactured by Goodyear and sold or leased in the United States whose Tires have gone flat and been replaced.

New York Sub-Class:

All consumers who purchased or leased new 2005, 2006, 2007, 2008, and 2009 MINI vehicles equipped with Run-Flat Extended Mobility Technology tires manufactured by Goodyear and sold or leased in the State of New York whose Tires have gone flat and been replaced.

DISCUSSION

Pursuant to Rule 23(a), plaintiffs must demonstrate that four conditions have been met before a court will certify a class: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a); Teamsters Local 445 Freight Div. v. Bombardier, 546 F.3d 196, 201-02 (2d Cir. 2008). In addition, plaintiffs must demonstrate that a class action is maintainable under one of several different theories. Here, plaintiff argues that the class action is maintainable pursuant to Rule 23(b)(3), which requires a court to find (1) that questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and (2) that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. Fed. R. Civ. P.23(b)(3). Myers v. Hertz Corp., 624 F.3d 537, 547 (2d Cir. 2010). The plaintiff bears the burden of showing each of these elements by a preponderance of the evidence. Teamsters Local, 546 F.3d at 202.

I.Rule 23(a) Requirements

A.Numerosity "There is no magic minimum number that establishes numerosity," U.S. Fid. and Guar. Co. v. Madison Fin. Corp., 2002 WL 31731020, at *6 (S.D.N.Y. Dec. 4, 2002), but "numerosity is presumed at a level of 40 members," Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995). In addition to the Rule 23(a) numerosity requirement, the MMWA imposes a jurisdictional numerosity requirement of its own, disallowing MMWA class actions from going forward unless the plaintiffs number 100 or more. 15 U.S.C. § 2310(d)(3)(C).

Plaintiffs may rely on reasonable inferences drawn from available facts in establishing numerosity, particularly where, as here, more precise information about the size of the class is within the defendants' control. See German v. Federal Home Loan Mortg. Corp., 885 F. Supp. 537, 552 (S.D.N.Y. 1995) ("Lack of knowledge of the exact number of persons ...


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