BMW wants to settle a class-action lawsuit, but a plaintiff attorney says, "Not so fast."
BMW’s efforts to settle a class action lawsuit are coming to a head in a federal court in San Francisco – but a potential last-minute roadblock could conceivably increase the maker’s cost or settling the issue by 2500%.
The class action, which has been in court for two years, alleges that an estimated 200,000 BMW vehicles equipped with twin turbo engines have a faulty high pressure fuel pump. A hearing on the settlement is scheduled for today.
The proposed class action settlement in Nguyen v. BMW of North America calls for each affected class member to receive a free replacement of the high pressure fuel pump pursuant to an ongoing recall, plus payments ranging from $50 to $400 or an $800 BMW voucher.
However, Hovanes Margarian, a Los Angeles attorney, has filed a 149 page objection to the proposed settlement.
In his objection, Margarian argues that the proposed terms are inadequate as they undercut class members’ rights pursuant to Federal and State Lemon Laws which entitled consumers to significant, if not full, refunds of all their payments when a vehicle is deemed to be defective.
Furthermore, the settlement agreement not only circumvents the various lemon laws but also asks class members to waive their legal rights without being properly advised. According to Margarian, the settlement class should be re-evaluated and divided into sub-categories consisting of class members who qualify for statutory Lemon Law repurchases, class members who qualify for significantly larger diminution of value damage awards, and class members who qualify for recoveries within a smaller range of sums.
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In total, Margarian requests that the total class recovery be increased from an estimated $42 million dollar sum based on the average expected payout under the proposed settlement agreement to a whopping $1.14 billion.
Margarian also is demanding certification as class co-counsel in these proceedings to contribute his expertise in determining a more fair and appropriate resolution for the class members.
The objection to the proposed class settlement is scheduled for oral arguments in the U.S. District Court for the Northern District of California this week.
Margarian says he has been counsel on over one thousand consumer fraud and automobile warranty breach cases and litigated cases against a wide range of corporate giants. His clients consist primarily of consumers whose rights have been violated through unlawful business practices.