Hogan v. BMW of N. Am. LLC

Decision Date31 August 2020
Docket NumberCASE NO. C20-0089-RAJ-MAT
CourtU.S. District Court — Western District of Washington
PartiesGARY HOGAN, Plaintiff, v. BMW OF NORTH AMERICA LLC, Defendant.

Plaintiff Gary Hogan brings claims relating to his BMW vehicle with an allegedly defective "N63" engine. (Dkt. 17.) Defendant BMW of North America, LLC (BMW NA) seeks dismissal of this action as time-barred pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. 24.) Defendant relies on its separately filed Request for Judicial Notice in Support of Motion to Dismiss (Dkt. 23) and accompanying exhibits. Plaintiff opposes the motion to dismiss. (Dkt. 26; see also Dkt. 27 (defendant's reply).)1 The undersigned, having considered the briefing and evidenceproperly considered in support, concludes defendant's request for judicial notice (Dkt. 23) should be GRANTED, and defendant's motion to dismiss (Dkt. 24) should be DENIED.


Plaintiff purchased a 2009 BMW 750i with an N63 engine ("the vehicle") from BMW Seattle on or about September 20, 2012. (Dkt. 17, ¶¶2, 14.) He alleges that, within the first year of purchase, the vehicle consumed an excessive amount of engine oil, requiring him to add one quart of oil about every 1,000 to 1,600 miles throughout the warranty period, well before BMW's recommended oil change intervals. (Id., ¶16.) Also within the first year of purchase and during the warranty period, plaintiff complained to BMW Seattle that the vehicle consumed an excessive amount of engine oil. (Id., ¶17.) BMW Seattle told plaintiff the oil consumption was normal and did not warrant a repair. (Id., ¶18.)

Plaintiff alleges that, as early as 2008, BMW knew the N63 engine had a manufacturing defect causing it to consume oil at an extremely rapid rate and requiring the regular addition of oil between BMW's recommended oil change intervals in order to prevent engine failure and other damage. (Id., ¶¶37, 69.) He contends BMW acquired that knowledge through "pre-release testing data, durability testing, early consumer complaints. . . , testing conducted in response to those complaints, aggregate data from BMW dealers, including dealer repair orders and high warranty reimbursement rates, as well as, from other internal sources." (Id., ¶69.)

Plaintiff avers that, rather than disclosing the defect to plaintiff and other consumers and providing for repair, BMW issued technical service bulletins ("TSBs") to address complaints of excessive oil consumption and other problems related to the N63 engine. (Id., ¶¶51-53.) For example, a June 2013 TSB instructed service technicians to add two quarts of engine oil to N63 vehicles, instead of the one additional quart instructed by the vehicle's electronic system. (Id.,¶¶54-55.) Plaintiff maintains the TSBs served to misrepresent that the rate of oil consumption in N63 engines was normal and expected in engines fitted with turbochargers. (Id., ¶57.) BMW also, on December 29, 2014, launched the "N63 Customer Care Package", consisting of measures which served to mask, not correct the N63 engine defects. (Id., ¶¶61-62.) The package, for example, significantly reduced the mileage of recommended engine oil change intervals for subject vehicles from the earlier of 15,000 miles or two years, to the earlier of 10,000 miles or one year. (Id., ¶63.) BMW also launched the "N63 Customer Loyalty Offer", providing discounts on new BMW vehicles, and the "N63 Customer Appreciation Program", authorizing dealerships to provide up to $50 of BMW merchandise or accessories. (Id., ¶¶64-65.)

Plaintiff contends BMW had a duty to disclose the oil consumption defect and associated repair costs because the defect poses unreasonable safety hazards, including the possibility of engine failure and resulting serious risk of accidents and injuries. (Id., ¶¶68, 70-71.) He contends BMW had exclusive knowledge or access to material facts about the defect that were not known or previously discoverable by plaintiff and other consumers. (Id.) He identifies consequences of the defect and failure to disclose, such as out-of-pocket expenses incurred and impaired use, value, and safety of the vehicle. (Id., ¶¶72-76.)

Plaintiff's pursuit of relief in relation to the alleged N63 defect began outside of this Court. Following a lawsuit initiated on September 18, 2015, the New Jersey District Court, on May 11, 2018, granted preliminary approval of a class action settlement relating to the N63 engine in Bang v. BMW of North America, LLC, No. 2:15-CV-6945 (Dkt. 88). A settlement notice advised that class members who chose to exclude themselves from the settlement "may sue, continue to sue, or be part of a different lawsuit against [BMW] in the future, including for claims that this Settlement resolves" and "will not be bound by anything that happens in this lawsuit." Id. (Dkt. 111-3). OnAugust 10, 2018, plaintiff opted out of the Bang class action settlement and, on December 3, 2018, filed an individual action in New Jersey District Court. See Sarwar, et al. v. BMW of North America, LLC, et al., No. 2:18-cv-16750. (See also Dkt. 17, ¶92.) On November 27, 2019, the Sarwar court severed plaintiff's claims with leave to re-file as a separate cause of action, and on that date and in a subsequent order deemed the statute of limitations tolled during the pendency of that action through January 27, 2020. See Sarwar, No. 2:18-cv-16750 (Dkts. 42 & 45). Plaintiff filed suit in this Court on January 20, 2020 and, on June 28, 2020, filed the operative First Amended Complaint (FAC). (Dkts. 1 & 17.)


Plaintiff alleges breaches of warranty, implied warranty of merchantability, and express warranties pursuant to the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq., and the Washington Uniform Commercial Code, RCW 62A.2-313, 62A.2-314, violation of the Washington Consumer Protection Act, RCW 19.86.010, et seq., and fraudulent concealment. (Dkt. 17.) Defendant seeks dismissal of plaintiff's claims pursuant to Rule 12(b)(6) (Dkt. 24), as well as judicial notice of documents in support of its motion (Dkt. 23).

A. Materials Considered

As a general matter, the Court may not consider material beyond the complaint in ruling on a Rule 12(b)(6) motion. Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001). Exceptions to this rule include material properly submitted as a part of the complaint and documents not physically attached to the pleading if the contents are alleged in the complaint and no party questions the authenticity. Id. See also United States v. Ritchie, 342 F.3d 903, 907-09 (9th Cir. 2003) ("Even if a document is not attached to a complaint, it may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basisof the plaintiff's claim.") In addition, under Federal Rule of Evidence 201, a court may take judicial notice of "'matters of public record.'" Lee, 250 F.3d at 688-89 (quoting Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986)). Specifically, a court may take judicial notice of a fact "not subject to reasonable dispute" because the fact "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b)(2).

In the Request for Judicial Notice (RJN), defendant asks the Court to consider three exhibits in support of the motion to dismiss: (1) excerpts of the New Vehicle Limited Warranty booklet, and its identification of the date on which coverage begins, its limitations on implied warranties, and portions of the booklet reference by plaintiff in the FAC; (2) excerpts of a Warranty Vehicle Inquiry, depicting the original "in-service date", meaning the date the vehicle was sold to its original owner; and (3) excerpts of the Certified Pre-Owned Consumer Information Statement, including the date on which coverage begins, its exclusions, and the portions inferred by plaintiff in the FAC. (Dkt. 23.) Plaintiff did not object or otherwise respond to the request to take notice of the New Vehicle Limited Warranty or the CPO Limited Warranty. Because plaintiff refers to and/or relies on both warranties in the FAC (see, e.g., Dkt. 17, ¶¶22-36), and because there does not appear to be any question as to the authenticity of the exhibits submitted by defendant, the Court appropriately takes judicial notice of those documents (see Dkt. 23, Exs. 1 & 3).

With respect to the Warranty Vehicle Inquiry record and its identification of the vehicle's in-service date, defendant states plaintiff referenced and discussed the date on which he purchased the vehicle and provided the vehicle's model year, while making only vague references to the in-service date. Plaintiff objects to the introduction of this document, observing courts may consider documents not physically attached to a pleading "where the documents' authenticity is notcontested, and the plaintiff's complaint necessarily relies on them." Sams v. Yahoo! Inc., 713 F.3d 1175, 1179 (9th Cir. 2013) (citing Lee, 250 F.3d at 688-89). Plaintiff states the FAC does not rely on the Warranty Vehicle Inquiry record.

While it is true plaintiff's complaint does not rely on the Warranty Vehicle Inquiry record or the vehicle's in-service date, plaintiff does not question the authenticity of the record and its content does not appear to be subject to reasonable dispute. The Court, as such, finds an insufficient basis for plaintiff's objection to the Court's consideration of this document (see Dkt. 23, Ex. 2). The Court also notes that, as reflected below, neither this document, nor the in-service date provides for the dismissal of plaintiff's claims under Rule 12(b)(6).

B. Standard of Review

A pleading need only provide a "short and plain statement" of the claim showing plaintiff is entitled to relief. Fed. R. Civ. P. 8(a). A Rule 12(b)(6) motion to dismiss may be based on either the lack of a cognizable legal theory or the absence of sufficient...

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