Rickman v. BMW of N. Am. LLC

• Decision Date: 11 May 2021
• Docket Number: Civ. No. 18-04363 (KM) (JBC)
• Citation: 538 F.Supp.3d 429
• Parties: Garner RICKMAN, et al., Plaintiffs, v. BMW OF NORTH AMERICA LLC, Bayerische Motoren Werke Aktiengesellschaft, Robert Bosch GmbH, and Robert Bosch LLC, Defendants.
• Court: U.S. District Court — District of New Jersey

538 F.Supp.3d 429

Garner RICKMAN, et al., Plaintiffs,

v.BMW OF NORTH AMERICA LLC, Bayerische Motoren Werke Aktiengesellschaft, Robert Bosch GmbH, and Robert Bosch LLC, Defendants.

Civ. No. 18-04363 (KM) (JBC)

United States District Court, D. New Jersey.

Signed May 11, 2021

Christopher A. Seeger, Christopher L. Ayers, Jennifer R. Scullion, Seeger Weiss LLP, Ridgefield Park, NJ, Mark M. Makhail, McCarter & English, LLP, Newark, NJ, Michael Andrew Innes, Caroline F. Bartlett, Donald A. Ecklund, James E. Cecchi, Carella Byrne Cecchi Olstein Brody & Agnello, P.C., Roseland, NJ, Scott A. George, Seeger Weiss, LLP, Newark, NJ, Shauna Brie Itri, Seeger Weiss LLP, Philadelphia, PA, for Plaintiffs.

Kevin M. McDonough, Latham & Watkins LLP, New York, NY, for Defendants BMW of North America LLC and Bayerische Motoren Werke Aktiengesellschaft (BMW A.G.).

Amy Danielle Luria, Michael D. Critchley, Critchley Kinum & Denoia LLC, Roseland, NJ, Jeffrey A. Rosenthal, Natalie Turchi, Cleary Gottlieb Steen & Hamilton LLP, New York, NY, for Defendants Robert Bosch GmbH and Robert Bosch LLC.

KEVIN MCNULTY, U.S.D.J.:

This is a putative class action brought by consumers who purchased BMW diesel vehicles. Plaintiffs assert state-law consumer protection and fraud claims arising from alleged misrepresentations regarding the vehicles’ emissions. Plaintiffs assert these claims against (1) Bayerische Motoren Werke Aktiengesellschaft ("BMW AG"), the manufacturer, based in Germany; (2) BMW of North America ("BMW NA"), BMW AG's American distributor, based in New Jersey; (3) Robert Bosch LLC, the developer of certain technologies used in the vehicles, based in Michigan; and (4) Robert Bosch GmbH, the parent of Bosch LLC, based in Germany. BMW AG and Bosch GmbH move to dismiss the claims against them for lack of personal jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(2). (DE 99, 100.)¹ For the following reasons, BMW AG's motion (DE 99) is DENIED , and Bosch GmbH's motion (DE 100) is GRANTED .

I. BACKGROUND

This case has already spawned five opinions and thousands of paragraphs of allegations. My opinions dismissing the original consolidated complaint, Rickman v. BMW of N. Am. , Civ. No. 18-4363, 2019 WL 2710068 (D.N.J. June 27, 2019) (" MTD I "), and dismissing the amended (and now operative) complaint's claim under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962, Rickman v. BMW of N. Am. , Civ. No. 18-4363, 2020 WL 3468250 (D.N.J. June 25, 2020) (" MTD II "), provide a full background. I recount here only what is relevant for the present motions.

A. Facts

1. BMW Defendants

This case concerns two car models, the BMW X5 xDrive35d ("X5") and BMW 335d. (1AC ¶ 1.) Plaintiffs allege that they purchased these vehicles because of false representations of lower emissions. (E.g., id. ¶¶ 1, 129.)

What the average consumer may think of as an entity called "BMW" is actually a complex, multinational family of business entities. (See Löwa Decl. ¶¶ 17–18.) BMW AG is, in essence, the mother entity that develops and manufactures the products. (See id. ¶ 18; 1AC ¶ 73.) BMW is based in Germany and organized under German law. (Löwa Decl. ¶ 6.) BMW AG manufactures the 335d in Germany. (Id. ¶ 24.) The X5, however, is manufactured by a different entity in South Carolina. (Id. )

BMW AG does not have a physical or operational presence in the United States. (Löwa Decl. ¶ 7–13.) Rather, BMW NA, an indirect subsidiary of BMW AG, "markets, distributes, sells, and warrants new BMW vehicles in the United States." (Id. ¶ 15.) BMW NA is organized under Delaware law and has its principal place of business in New Jersey. (Löwa Decl. ¶ 14.)

The U.S. market is important to BMW AG. BMW AG board members stated that 20% of BMW sales are made in the U.S. (DE 101-4 at 2; DE 101-7 at 2.) In the years immediately before marketing the models at issue, BMW AG touted that it would "invest[ ] one billion dollars in the growth and expansion of our business in the US." (DE 101-4 at 2.)

This attention to the U.S. encompassed an attention to the high American demand for environmentally friendly vehicles. At a global level, BMW AG developed an "Efficient Dynamics" strategy to engineer and market emissions-reducing vehicles, including the "Clean Diesel" models at issue here. (Id.; DE 101-2 at 17.) The chairman of BMW AG stated that introducing diesel vehicles into the U.S. market in particular would create a "surge" and "meet the different and challenging environmental requirements in all 50 American states." (DE 101-2 at 17; see also DE 101-3 at 17 (statement by the chairman that "[w]e have exactly the type of environmentally-friendly, efficient premium vehicles Americans need").) Indeed, those models garnered popularity and market share in the U.S., so BMW AG board members stated publicly that they would develop more diesel models "for the US market." (DE 101-4 at 2.)

Nonetheless, according to declarations submitted by BMW AG, BMW NA "was exclusively responsible" for promotional materials directed at American consumers and dealerships. (Hardy Decl. ¶ 14.) BMW NA also maintains the BMW website that is accessible to American consumers. (Id. ¶ 18.) BMW NA did not need or obtain approval from BMW AG for marketing materials. (Id. ¶ 14.) Still, BMW NA's website and brochures used the "Efficient Dynamics" and "Clean Diesel" name and logos, which were developed by BMW AG. (DE 101-6 at 23–26; DE 101-12 at 2.)

2. Bosch Defendants

This case also concerns technologies used in the vehicles to game emissions testing by government regulators ("defeat devices"). (1AC ¶¶ 8, 25.) Thanks to these defeat devices, Plaintiffs allege, diesel-car manufacturers were able to falsely promote their products as compliant with emissions standards. (Id. ¶¶ 75, 268–83.)

According to Plaintiffs, Bosch GmbH and Bosch LLC developed these defeat devices and supplied them to "BMW." (Id. ¶¶ 77–78.) Bosch GmbH is headquartered in Germany and organized under German law. (Id. ¶ 77.) Bosch LLC is Bosch GmbH's American subsidiary, organized under Delaware law and headquartered in Michigan. (Id. ¶ 78.)

The Amended Complaint does not allege that either Bosch entity had any direct relationship with consumers. Rather, both Bosch entities promoted their technologies mostly to regulators and automakers. (Id. ¶¶ 282–94.) The Bosch entities also generally promoted the improved "cleanliness" of diesel cars. (Id. )

3. Plaintiffs

Plaintiffs hail from a host of states; two of them, William Berbaum and Charles Chapman, are New Jersey residents. (Id. ¶¶ 52–53.) Their claims resemble those of the other plaintiffs. Berbaum purchased a used 335d from a dealership in North Carolina and a used X5 from a dealership in New Jersey. (Id. ¶ 52.) He purchased the vehicles based on advertisements on "BMW's website" and "representations from the dealership." (Id. ) Chapman purchased a used X5 from a New Jersey dealership. (Id. ¶ 53.) He, too, relied on "BMW's website" and "representations from the dealership." (Id. )

B. Procedural History

Plaintiffs sued the four defendants, asserting claims under RICO and the laws of Plaintiffs’ home states. MTD I , 2019 WL 2710068, at *2, 7. BMW NA and Bosch LLC moved to dismiss for lack of standing and failure to state a claim. Id. at *1–2. BMW AG and Bosch GmbH, however, did not join in the motion to dismiss, because they had not yet been served. Id. at *2 n.2. I dismissed the complaint without prejudice on standing grounds. Id. at *1.

Plaintiffs filed an Amended Complaint. (1AC.) BMW NA and Bosch LLC again moved to dismiss. MTD II , 2020 WL 3468250, at *1. BMW AG and Bosch GmbH still had not been served. (See DE 78.) I dismissed the RICO claim with prejudice as against the movants, BMW NA and Bosch LLC. MTD II , 2020 WL 3468250, at *1.

BMW AG and Bosch GmbH were then served, and the parties agreed that the prior dismissal of the RICO claim would apply to them as well. The parties further agreed that those two could move to dismiss the remaining state-law claims against them for lack of personal jurisdiction. (DE 94.) BMW AG and Bosch GmbH so moved. (DE 100, 101.)

Plaintiffs then moved to appeal from the dismissal of the RICO claim, either by certification of an order for interlocutory appeal under 28 U.S.C. § 1292(b) or entry of partial final judgment under Fed. R. Civ. P. 54(b). (DE 106.) BMW NA and BMW AG jointly filed a brief in opposition. (DE 108.) In a footnote, BMW AG stated that, by joining, it did not waive its objection to personal jurisdiction or otherwise consent to jurisdiction. (Id. at 1 n.1.) Bosch LLC and Bosch GmbH filed a notice joining in the opposition brief, with Bosch GmbH similarly stating that it did not waive its objection to personal jurisdiction. (DE 109 at 1 n.1.) I denied Plaintiffs’ motion to authorize an interlocutory appeal. (DE 113.)²

II. STANDARD OF REVIEW

On a Rule 12(b)(2) motion, the plaintiff bears the burden of establishing sufficient facts to show that jurisdiction exists. Marten v. Godwin , 499 F.3d 290, 295–96 (3d Cir. 2007). Initially, a court must accept the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff. Pinker v. Roche Holdings, Ltd. , 292 F.3d 361, 368 (3d Cir. 2002). Where factual allegations are disputed, however, "the plaintiff must sustain its burden of proof in establishing jurisdictional facts through sworn affidavits or other competent evidence." Patterson v. FBI , 893 F.2d 595, 603–04 (3d Cir. 1990) (citation omitted). If the district court does not hold an evidentiary hearing, "the plaintiff need only establish a prima facie case of personal jurisdiction." O'Connor v. Sandy Lane Hotel Co. , 496 F.3d 312, 316 (3d Cir. 2007).

III. DISCUSSION

The only issue presented is personal jurisdiction. A federal court may exercise personal jurisdiction over a defendant to the extent authorized by state law. Fed. R. Civ. P. 4(k)(1)(A). New Jersey provides for jurisdiction coextensive with constitutional due process.

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