Judge OKs BMW Demo Vehicle Class Action Settlement Agreement

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A class action settlement agreement between BMW of North America LLC and a group of customers received preliminary approval from a New Jersey federal judge Monday in a class action lawsuit alleging that the automaker falsely told plaintiffs that the demonstration vehicles they purchased would be treated as new and robbed them of full warranty coverage.

The BMW class action settlement is for BMW customers who were sold BMW Sales Demonstration vehicles “that was identified in the contract of sale as ‘new,'” and were not told that the warranty for the vehicle had begun before they purchased the vehicle, U.S. District Judge Claire C. Cecchi explains in her order granting preliminary approval.

BMW will begin sending out notices through email and postal mail within 60 days of when this order was granted by Judge Cecchi.

In addition, “the settlement administrator is authorized to establish a website and toll-free voice response unit with message capabilities” that class members may use as a resource to find information about the settlement agreement.

According to the BMW settlement agreement, class members will have the warranty on their vehicles extended at least three months. For owners who had to pay out-of-pocket for repairs due to the early expiration of their warranties, they will be able to get those costs reimbursed.

The proposal for the BMW class action settlement was submitted on May 29. It also includes attorneys’ fees for the plaintiffs for almost $600,000. However, it was not clear what the costs will be for the class members.

There will be a final approval of the BMW class action settlement on March 12, 2015.

The BMW class action lawsuit was first filed in October 2012 by plaintiff Sanjay Saini. He alleged that the “Ultimate Warranty” offered by BMW should begin on the date the car was purchased by the customer not when it was first enlisted by the dealer as a demo vehicle, since the vehicles were identified as new on the contract.

The “Ultimate Warranty” is supposed to last for four years and is supposed to include no-cost maintenance and repair, but when BMW customers purchased the demo vehicles, they were given less than that amount, even though their vehicle was still considered “new,” according to the BMW class action lawsuit.

Saini alleged that BMW had breached its contractual covenant by not providing the full four years of warranty services, had unjustly enriched the automaker on the backs of the class members, and violated class members’ rights under the federal Declaratory Judgements Act.

BMW had tried to have the class action lawsuit dismissed by arguing that Saini had not suffered any real damages and therefore did not have the necessary standing to file the class action lawsuit.

Saini is represented by Bruce D. Greenberg of Lite DePalma Greenberg LLC and by Jeffrey R. Krinsk, Mark L. Knutson and William R. Restis of Finkelstein & Krinsk LLP.

BMW is represented by Christopher J. Dalton and Rosemary J. Bruno of Buchanana Ingersoll & Rooney PC.

The BMW Class Action Lawsuit is Sanjay Saini v. BMW of North America LLC, Case No. 2:12-cv-06105, in the U.S. District Court for the District of New Jersey.