Third Circuit Deflates Run-Flat Tire Class Action Against BMW and Bridgestone

In Marcus v. BMW of N. Am, LLC, et al., the Third Circuit vacated an order certifying a class of owners and lessees of various model-year BMW vehicles equipped with run-flat tires, finding the class definition impermissibly vague, the proposed class not ascertainable, and otherwise rejecting certification on numerosity and predominance grounds. Although the Court remanded for further proceedings, it will likely be very difficult for the plaintiff to have a class certified in light of the Court’s directives for the necessary proof.

In Marcus, the plaintiff sued BMW and Bridgestone on behalf of all New Jersey purchasers and lessees of certain BMW vehicles that were equipped with Bridgestone run-flat tires which went flat or were replaced, alleging consumer fraud, breach of warranty, and breach of contract claims. The District Court denied the plaintiff’s motion to certify a nationwide class, but certified a New Jersey sub-class, relying on the proposed class definition in the plaintiff’s amended Notice of Motion.

Before evaluating whether the proposed class satisfied Rule 23(a), the Third Circuit examined the proposed class definition and the ascertainability of the class. Concluding that the class definition was unclear and imprecise, the Court held that any motion for class certification on remand must satisfy Rule 23(c)(1)(B)’s mandate for a “‘readily discernible, clear, and complete list’” of the “claims, issues, or defenses to be treated on a class basis . . . .” Recognizing that an “essential prerequisite” of a Rule 23 (b)(3) class is that the class must be “readily ascertainable based on objective criteria,” the Court found that class treatment is improper if “extensive and individualized fact-finding or ‘mini-trials’ are required in order to identify class members.” The Court instructed the District Court to determine on remand whether the defendants’ records were capable of identifying class members, and if not, whether there was a “reliable, administratively feasible alternative.” Furthermore, the Third Circuit cautioned that a method that simply allowed potential class members to be a part of the class by their “say so” was improper, unreliable, and presented due process concerns.

Turning to the prerequisites of Rule 23(a), the Third Circuit concluded that the District Court abused its discretion in concluding that numerosity was satisfied. While the plaintiff submitted adequate evidence to establish numerosity for a nationwide class, the Third Circuit explained that “evidence that is sufficient to establish numerosity with respect to the nationwide class is not necessarily sufficient to establish numerosity with respect to the state-specific class.” The Court also rejected the District Court’s reliance upon “common sense” to establish numerosity.

Lastly, the Third Circuit engaged in a thorough predominance analysis, turning first to the common law claims and then the consumer fraud claims. Predominance was not satisfied because an individual inquiry would be necessary to determine why each class member’s tires went flat or needed to be replaced. With respect to the New Jersey Consumer Fraud Act (“NJCFA”) claims, the Court noted that the NJCFA claim alleged that the class members suffered ascertainable losses not when their Bridgestone tires went flat, but when they purchased or leased the BMW vehicles, i.e., they received less than what they expected. The Third Circuit also accepted the defendants’ argument that the class members’ knowledge about run-flat tires is necessary to determine whether the defendants’ conduct was the proximate cause of the alleged ascertainable loss — an inquiry that would require individualized, instead of classwide, proofs. Ultimately, the Third Circuit held that the District Court failed to make certain factual findings regarding consumers’ knowledge about run-flat tires prior to purchase or lease, so it did not properly apply the “presumption of causation” to the NJCFA claims.

You may also like...