United States District Court, W.D. Texas, Austin Division
MOHAMMED ALAM, ROGER BURAIMOH, FREDERICO ORNELAS, DANIEL CASEY, PATRICIA BENSON, DERIC JONES, WILLIAM KENT MYATT, JAMES LOUGHLIN
BMW OF NORTH AMERICA, LLC
HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION OF THE UNITED STATES
W. AUSTIN UNITED STATES MAGISTRATE JUDGE
the Court are Defendant's Motion to Dismiss First Amended
Complaint or, In the Alternative, to Sever Plaintiffs'
Claims (Dkt. No. 10), Plaintiffs' Response (Dkt. No. 9),
and Defendant's Reply (Dkt. No. 13). The District Court
referred the above motion to the undersigned Magistrate Judge
for report and recommendation pursuant to 28 U.S.C.
§636(b)(1)(A), Fed.R.Civ.P. 72, and Rule 1(c) of
Appendix C of the Local Rules.
allege that their BMW vehicles consume an excessive amount of
engine oil and that BMW has failed to honor the terms of
their warranties. Am. Compl., Dkt. 8. Plaintiffs Mohammed
Alam, Roger Buraimoh, Frederico Ornelas, Daniel Casey,
Patricia Benson, Deric Jones, William Kent Myatt, James
Loughlin (together, “Plaintiffs”) filed this suit
against BMW of North America, LLC (“BMW”) on
January 8, 2019. Dkt. No. 1. Each alleges that they purchased
vehicles with an “N63” engine, which BMW used in
certain vehicles for the 2009 to 2014 model years.
Id. ¶ 79. They allege that when they purchased
the vehicles at BMW dealerships, they relied on material
representations by BMW agents regarding BMW's New Vehicle
Limited Warranty, including the representation that BMW would
repair their vehicles' engines. Id. ¶ 71.
Under its New Vehicle Limited Warranty, BMW promised to
repair or replace components found to be defective in
material or workmanship during the 4-year / 50, 000-mile
period following vehicle delivery to the consumer.
Id. ¶ 72. After purchasing their vehicles,
Plaintiffs discovered that their engines contain an alleged
manufacturing defect that causes the vehicles to consume
engine oil at an extremely rapid rate. Id. ¶
77. Plaintiffs had to add additional oil between the
recommended oil change intervals to prevent their engines
from failing, and contend they suffered related damage.
Id. ¶ 78. For example, Plaintiff Ornelas
alleges that within a few months of purchase, his vehicle
required adding a quart of oil every 300 to 500 miles, well
before BMW's recommended oil change intervals.
Id. ¶¶ 28, 99.
allege that the N63 is now “widely known” as
defective in the automotive industry for consuming excessive
oil and requiring frequent repairs compared with similar
vehicles. Id. ¶ 82; see also
¶¶ 83-91, 93-102. Plaintiffs also allege that BMW
knew about the increased oil consumption but failed to
disclose it to consumers at the time of sale. Id.
¶¶ 88, 92, 111. After “thousands of customer
complaints” about the defect, BMW introduced an
“N63 Customer Care Package” offering free
inspections and parts replacements. Id. ¶
102-03. Plaintiffs allege that these “mask, but do not
correct, the serious design and/or manufacturing
defects.” Id. ¶ 102. BMW also offered
discounts for replacement BMW vehicles. Id. ¶
allege that the defect has caused them to incur costs for
additional service and maintenance, and for BMW-approved
engine oil. They are discouraged from traveling long
distances. They contend they will also “suffer
significant loss” when they sell their vehicles
“because the reputation of these vehicles has been
impaired by now-public research establishing that these
vehicles suffer from the oil consumption defect.”
Id. ¶ 113.
assert four causes of action: breach of express warranty
under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301,
et seq., (hereinafter “the MMWA”); breach of an
implied warranty of merchantability under the MMWA and Tex.
Bus. & Com. Code § 2.314; breach of express
warranties pursuant to Tex. Bus. & Com. Code §
2.313; and deceptive trade practices pursuant to Tex. Bus.
& Com. Code § 17.41, et seq. Id.
¶¶ 134-57. Plaintiffs ask this Court to award
damages, including a refund of all payments made by
Plaintiffs on the subject contracts, equitable relief in the
form of replacement or repair of the vehicles, and punitive
damages for BMW's alleged intentional concealment of the
defect. Id. at 30-31.
moves to dismiss Plaintiffs' claims under Rule 12(b)(1)
and Rule 12(b)(6), asserting that: (1) Plaintiffs' claims
do not meet the amount in controversy requirement of $50, 000
under the MMWA or $75, 000 under 28 U.S.C. §1332(a); (2)
the statute of limitations bars Plaintiffs' claims; and
(3) even if this Court has subject matter jurisdiction and
their claims are not time-barred, Plaintiffs fail to allege
essential elements of their claims. Dkt. No. 10. In the
alternative, BMW moves to sever Plaintiffs' claims
because they do not arise from the same transaction or
occurrence and each Plaintiff will raise different questions
of law and fact. Id. at 20. The Court will address
the motion to sever first.
THE MOTION TO SEVER
the Federal Rules of Civil Procedure, persons may join in a
single action if: “(A) they assert any right to relief
jointly, severally, or in the alternative with respect to or
arising out of the same transaction, occurrence, or series of
transactions or occurrences; and (B) any question of law or
fact common to all plaintiffs will arise in the
action.” Fed.R.Civ.P. 20 (a)(1). “Misjoinder of
parties is not a ground for dismissing an action. On motion
or on its own, the court may at any time, on just terms, add
or drop a party. The court may also sever any claim against a
party.” Fed.R.Civ.P. 21.
Rule 21 does not provide any standards by which district
courts can determine if parties are misjoined, courts have
looked to Rule 20 for guidance.” Stein v. Navient
Sols., LLC, 2018 WL 2124108, at *2 (W.D. Tex. May 7,
2018) (quoting Acevedo v. Allsup's Convenience
Stores, Inc., 600 F.3d 516, 521 (5th Cir. 2010)).
“Courts have described Rule 20 as creating a two-prong
test, allowing joinder of plaintiffs when (1) their claims
arise out of the ‘same transaction, occurrence, or
series of transactions or occurrences' and when (2) there
is at least one common question of law or fact linking all
claims.” Id. If both prongs are met,
“permissive joinder of plaintiffs . . . is at the
option of the plaintiffs.” Id. (quoting
Applewhite v. Reichhold Chems., 67 F.3d 571, 574
(5th Cir. 1995)). “However, even if this test is
satisfied, district courts have the discretion to refuse
joinder in the interest of avoiding prejudice and delay,
ensuring judicial economy, or safeguarding principles of
fundamental fairness.” Acevedo, 600 F.3d at
521 (internal citations omitted). “[A] trial court has
broad discretion to sever.” Anderson v. Red River
Waterway Comm'n, 231 F.3d 211, 214 (5th Cir. 2000).
Where a court grants severance, the appropriate relief is to
sever or “dismiss the claims of any misjoined parties,
” not to dismiss the entire action. Acevedo,
600 F.3d at 522 (citing Fed.R.Civ.P. 21).