A recent New York federal court opinion illustrates the difficulty in establishing predominance where the primary injury alleged is overpayment for a defective product based on misrepresentation or concealment of the defect.
In Oscar v. BMW of North America, the plaintiff attempted to sue BMW on behalf of a class of New York purchasers of MINI vehicles with Goodyear run-flat-tires whose tires had “gone flat and been replaced.” The plaintiffs alleged that BMW had violated New York state law by making defective disclosures regarding the reliability and replacement cost of the RFTs. Specifically, the lawsuit alleged that BMW had improperly failed to disclose RFTs’ increased risk of failure; the lack of a spare tire; that RFTs cannot be repaired; that RFTs cost more than normal tires to replace; and that replacing RFTs is more inconvenient and time-consuming than replacing normal tires.
In support of his argument that classwide issues predominated, the plaintiff asserted a classwide injury in the form of a portion of the MINI purchase price paid by class members that could be attributed to the RFTs. To illustrate this claim, the plaintiff noted that the suggested retail price of a 2006 MINI S with RFTs was $20,600, while the price of a 2006 MINI Cooper without RFTs was $18,000. The plaintiff argued that the $2,600 price difference could be attributed to the presence of RFTs. The court rejected this theory, in part because the MINI S included many pieces of equipment not on the standard MINI. Thus, it would be impossible to determine on a classwide basis whether the presence of RFTs “caused” consumers to pay a higher sum for the MINI S: “For some consumers, the RFTs may have been an important factor; for others, not at all; for others, somewhere in between; and others, perhaps most others, may never have thought to isolate the relative contribution of each of the differences between these models. . . .”
Moreover, the court found it would be “impossible” to determine, on a classwide basis, the extent to which class members’ decisions to purchase the vehicles would have been different if the RFT disclosures had been made. The court cited both “the inherently independent nature of the purchase decision” and “the conjectural nature of the post hoc injury into how a consumer’s purchase decision might have been affected.” While some consumers might have found the undisclosed defects relevant, “there are simply too many other variables in play to permit that conclusion as to the entire class of consumers . . . .” The court also noted potential other variables adversely impacting a classwide determination of injury, such as the extent to which some class members might have overvalued some other feature of the vehicle (and thus been willing to pay the higher purchase price even had they known of the RFT flaws) and individualized factors affecting each class member’s negotiation of the purchase price with the dealer.
Demonstrating that common questions predominate over individual questions is always difficult where nondisclosure of a product’s features will be alleged, because such lawsuits typically require an examination of each consumer’s knowledge and decision-making process in purchasing the product. Where the product is an automobile, which usually is not even sold to consumers at a uniform price, the predominance hurdle will be nearly insurmountable.