Rickman v. BMW of N. Am.
| Decision Date | 25 June 2020 |
| Docket Number | Civ. No. 18-4363(KM) (JBC) |
| Parties | GARNER RICKMAN, ZIWEN LI, GARY REISING, JACOB BIGGINS, TOM HOFFMAN, ALEXANDER VANDAMME, SETH DAVIS, CHARLES CHAPMAN, CHARLES ROGERS, ION NICOLESCU, WERNER ROGMANS, ERICA OLSON, ALGREDO ARIAS, JESSE WHITE, RAZMIR AVIC, RICKEY EVANS, MARK MESSINA, LUKAS WILDNER, MIGUEL FRAGOSO, MARK SMITH, WILLIAM BERBAUM, KYLE KERN, ERIC STENGLEIN, CARLOS BUENDIA, TAHANI IBRAHIM, JOHN SAVIANO, GENE QUINT, BRIAN HEMBLING, IRVING COHEN, CHRISTINE GRIFFITH, TARRAH PEE, DARSHAN PATEL, BRIAN BECKNER, JOSHUA HU, JEFFREY PRICE, DEAN WERNER, ERIC SANCHEZ, CHARLES CAMPBELL, ANGELA HUGHES, JAMES TURNER, ELLIS GOLDFRIT, CHAD MACCANELLI, and SALOMON CAMPOS, individually and on behalf of all others similarly situated, Plaintiffs, v. BMW OF NORTH AMERICA, BAYERISCHE MOTOREN WERKE AKTIENGESELLSCHAFT (BMW A.G.), ROBERT BOSCH GMBH, and ROBERT BOSCH LLC, Defendants. |
| Court | U.S. District Court — District of New Jersey |
The named plaintiffs in this case represent a putative class of car buyers who each allegedly own a BMW X5 or BMW 335D vehicle. On behalf of the class, the named plaintiffs sued BMW of North America ("BMW USA"); Bayerische Motoren Werke Aktiengesellschaft ("BMW AG") (together, "BMW"); Robert Bosch GmbH; and Robert Bosch LLC (together, "Bosch") for their alleged roles in the clean-diesel emissions scandal. Plaintiffs' first amended complaint ("1AC", DE 65)1 asserts one count under the federal RICO statute and seventy-eight counts under the laws of various states.
Now before the Court are the motions to dismiss, pursuant to Fed. R. Civ. P. 12(b)(6), of defendants BMW USA (DE 68) and Robert Bosch LLC (DE 69). For the following reasons, the motions are GRANTED in part and DENIED in part. Plaintiffs have failed to allege standing to bring a claim under the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962. Because amendment would appear to be futile, the portion of the complaint that purports to state a claim for RICO relief (Count 1) is DISMISSED. Because federal-court jurisdiction is unaffected by that dismissal, Plaintiffs may continue to prosecute their state-law claims (Counts 2-79).
Familiarity with this matter is presumed; I write for the parties and do not repeat the factual background described in my June 27, 2019 opinion (DE 59), which dismissed the original consolidated class action complaint. Instead, I will briefly summarize the new allegations contained in the first amended complaint.
The linchpin issue that doomed the consolidated class action complaint (DE 26) was the lack of "a straightforward allegation that an identified plaintiffbought a car which. when tested or analyzed, turned out to contain a defeat device." (DE 59 at 2). Instead, the consolidated class action complaint relied on a single X5 vehicle that "seem[ed] to be proffered as an exemplar." (DE 59 at 2). The first amended complaint also does not allege facts to establish that any named plaintiff's car contained a defeat device. It is true that the new pleadings contain more robust allegations concerning the testing and analysis of five "clean diesel" and one gasoline vehicle. (1AC ¶ 163). Still, no plaintiff claims to have owned any of the tested vehicles; instead, Plaintiffs' theory is that each vehicle is representative of the entire line of cars. (1AC ¶¶ 3 &73).
Plaintiffs emphasize that when a car manufacturer like BMW seeks regulatory approval for a new vehicle, the manufacturers submit to the EPA a single vehicle to stand in for the entire model line. (1AC ¶¶ 3 & 173). The theory is that each subject vehicle is materially and fundamentally identical to every other vehicle in the fleet, and therefore is properly the subject of the clean diesel testing fraud allegations. That theory is the foundation upon which the first amended complaint seeks to cure the deficiencies of the previously dismissed consolidated class action complaint. To that end, Plaintiffs note that after the class action complaint was dismissed, their experts performed tests using the portable emission measurement system ("PEMS") and a chassis dynamometer on several additional vehicles—although, again, none in particular is alleged to have belonged to any named plaintiff.
The tested vehicles consisted of two 2012 BMW X5s, one 2011 BMW X5, two 2011 BMW 335ds, and a gasoline-powered 2012 X5.3 (1AC ¶¶ 163 & 169-252). The first amended complaint also includes new information about the vehicles that were tested, including allegations that their mileage was close to the certification standard, that they had been properly maintained, and that none had any emission-system faults. (1AC ¶¶ 169, 171 & 172).
Plaintiffs maintain that the first amended complaint sets forth detailed, particularized allegations of:
(1) tests of five diesel vehicles (1AC ¶¶ 3, 20, 125-28 & 169-252);
(2) PEMS testing (1AC ¶¶ 2, 3, 4, 5, 17, 163 & 186-252);
(3) chassis dynamometer testing (1AC ¶¶ 17 & 174-85);
(4) with the test results showing use of defeat devices (1AC ¶¶ 18-24 & 174-252);
(5) the operation of the defeat devices (1AC ¶¶ 25 & 253-66); and
(6) Defendants' manipulation of the EDC17 system (1AC ¶¶ 25, 80, 84, 85, 203, 204, 253-66 & 269-308).
Plaintiffs have also submitted to the Court scientific literature, reports, and testing accounts from independent entities that purport to show that most "clean diesel" vehicles emit far more pollution on the road than in laboratory tests. (1AC ¶¶ 322-32). The first amended complaint also vouches for the reliability of the PEMS testing system.4 (1AC ¶¶ 4 & 152-68).
Plaintiffs allege that their scientific evidence confirms the superior accuracy of PEMS testing as compared with chassis dynamometer testing.5 The first amended complaint focuses on the weaknesses inherent in chassis dynamometer testing. These weaknesses of chassis dynamometer testing include that (1) during testing, the front wheels move but do not turn, which does not happen in real-world driving conditions; (2) on a two-wheel drive vehicle, the driven wheels are moving but the non-driven wheels are not; and (3) on a vehicle equipped with GPS, the vehicle's wheels move while the GPS position does not change. (1AC ¶ 166). According to Plaintiffs, an engine can bedesigned to detect that it is being tested on a chassis dynamometer, but the same is not true as to PEMS testing. Thus, according to Plaintiffs, "PEMS is not only accurate for detection and quantification of defeat devices, it is essential." (1AC ¶ 166).
Plaintiffs subjected all five subject vehicles to laboratory and real-world testing. The vehicles were first tested on a chassis dynamometer, adhering to federal test protocols in a CFR-compliant laboratory. (1AC ¶¶ 125-28 & 174). In this laboratory testing environment, the five vehicles all met or approached emissions standards. (1AC ¶¶ 180-85). During on-road PEMS testing, however, the vehicles did not meet the standard. The first amended complaint alleges that the defeat device drove the vehicles' on-road NOx emissions dramatically higher. Specifically, under city driving conditions, the vehicles' emissions were 1.4 to 7.5 times the standard and, at times, 9 to 73 times the standard. (1AC ¶¶ 19 & 192). Under highway-driving conditions, all but one diesel vehicle exceeded the standards. The 2012 X5, for example, exceeded the standard by a multiple of 3.4. (1AC¶ 195). The gasoline-powered BMW X5, by contrast, had an average NOx emission rate below the emissions standard in both chassis dynamometer and PEMS testing. (1AC ¶ 192).
Plaintiffs also claim that the first amended complaint adequately alleges the use of a temperature defeat device, embodied in software programming. (1AC ¶ 197) The temperatures in vehicle test-certification cycles must be between 68°F and 86°F, but the first amended complaint details how emissions controls are turned down or off in temperatures outside that range. (1AC ¶¶ 196-210). According to Plaintiffs, PEMS testing revealed the use of a temperature defeat device, yielding emissions as high as 526 mg/mile. (1AC ¶¶ 196-200).
The first amended complaint also alleges that the subject vehicles can reduce NOx to meet emissions standards so long as the effectiveness of the emissions-control system is not otherwise reduced, such as by instruction from the EDC17. (1AC ¶¶ 213 & 214). It also contains allegations that describe how the emissions systems were disabled. (1AC ¶¶ 215-19). Specifically, byisolating and testing laboratory-like conditions during PEMS testing, Plaintiffs' experts concluded that the subject vehicles are able to detect the certification test cycle and adjust the emissions performance when the EDC17 "knows" the test cycle is not being run. (1AC ¶ 218).
Moreover, the first amended complaint alleges that Plaintiffs' PEMS tests showed increased emissions during cold-start and hot-start conditions, and that the tested vehicles did not pass PEMS testing during the passive regeneration phase that removes diesel particulate matter.6 (1AC ¶¶ 21-24, 220-28, 241 & 304).
All of these new allegations taken together, Plaintiffs assert, cure the deficiencies identified in the consolidated class action complaint.
The first amended complaint also contains revised allegations regarding Bosch's participation in the scheme. According to Plaintiffs, Bosch in 2006 introduced the EDC17 as the "brain of diesel injection" that "controls every parameter that is important for effective, low-emission combustion," because it wanted to enter the lucrative diesel market. (1AC¶ 269). The EDC17 is a proprietary system over which Bosch exerts complete control to prevent its clients from changing the software without Bosch's participation. (1AC ¶¶ 258 & 271-73).
Plaintiffs allege that Bosch's control over the software allowed BMW to reduce or turn off emissions controls when the vehicle sensed it was not...
To continue reading
Request your trial