Products Liability Law Daily Mercedes-Benz taken to task for ‘fake recall’ of Takata airbags
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Wednesday, May 2, 2018

Mercedes-Benz taken to task for ‘fake recall’ of Takata airbags

By Pamela C. Maloney, J.D.

Describing the Mercedes-Benz recall of vehicles equipped with admittedly dangerous Takata airbags as a sham and a "fake recall," a lessee of one of the automaker’s luxury vehicles filed a class action complaint in California federal court asserting claims sounding in product liability, intentional and negligent misrepresentation, breach of implied warranty and implied covenant of good faith and fair dealing, and unjust enrichment based on the automaker’s alleged failure to make repairs in a timely manner. In addition to compensatory damages, the class is seeking punitive damages against Mercedes-Benz (Oppenheim v. Mercedes-Benz USA, LLC, April 30, 2018).

The named representative of the putative class had leased a 2017 Mercedes-Benz E400A, which was subject to the automaker’s October 6, 2017 Electrical Grounding/Airbag Deployment Recall that affected approximately 495,290 Mercedes-Benz vehicles in the United States. Prior to the recall, which was issued in response to the highly publicized, nationwide recall of defective Takata airbags, Mercedes-Benz had notified its customers that these airbags could explode during deployment, causing metal fragments to strike front seat occupants and potentially resulting in serious injury or death. The lessee alleged that he had received a letter informing him of the recall after he had leased the vehicle. The letter advised that the vehicle was being recalled to correct defects related to insufficient electrical grounding in steering wheel components that could cause the inadvertent deployment of the driver airbag leading to injuries and crashes. An initial repair date was set in December 2017; however, a second letter informed the lessee that the time needed to make repairs had to be extended but no new date was set.

Basis for the complaint. According to the complaint, despite its brand claims regarding meticulous and superior engineering and its use of the motto "The Best or Nothing," Mercedes-Benz has exhibited a deceptive pattern with regard to its recalls, including the Takata airbag recall, and has the worst Takata airbag repair record of the 19 U.S. automakers reviewed by Consumer Reports in November 2017. As evidence of Mercedes-Benz’s deceptive practices, the complaint points to the automaker’s failure to repair the vehicles subject to recall, despite having warned customers of the potential grave consequences should the vehicles not be repaired. The complaint states that at the time the lawsuit was filed, Mercedes-Benz and its authorized dealers remained unable to provide a remedy for the electrical grounding/airbag deployment recall, allegedly due to a lack of replacement parts, and were unable to give customers a reliable date for when the repairs could be made. In addition, the complaint charges that Mercedes-Benz authorized dealerships continue to give a variety of explanations for the added delay in repair time frames and often contradict the recall letters by assuring customers that there was no actual danger. Authorized dealers had even indicated that if the lessee paid separately for the replacement, the repairs could be made.

Despite misleading consumers as to the availability of parts and its ability to remedy the defective vehicles, as well as giving false and misleading dates when vehicles will be repaired, the complaint alleges that Mercedes-Benz has continued to charge lease payments and has refused to provide replacement cars or other compensation during the period when the vehicles were not repaired.

Causes of action. Noting that Mercedes-Benz is unable to effectuate the recall, the clear purpose of which is to remedy defective and dangerous products so they could be returned to the consumer in the condition intended—and promised—when they were purchased or leased, the complaint set forth the following causes of action, among others: (1) product liability for the design, manufacture, assembly, marketing, and sale of vehicles in a defective and unreasonably dangerous condition; (2) intentional and negligent misrepresentation for falsely representing that Mercedes-Benz vehicles are safe, that its service would be of the best quality, and that defective vehicles would be recalled and fixed in a world-class manner; (3) breach of the implied warranties of merchantability and fitness for a particular purpose for falsely and deceptively representing that its vehicles are safe and without defects; (4) breach of an implied covenant of good faith and fair dealing for engaging in deceptive behavior that clearly interfered with customers’ rights to receive the benefit of their purchases; and (5) unjust enrichment for depriving customers of safe and high-quality vehicles and for keeping the money customers continued to pay to drive defective and unreasonably dangerous and defective recalled vehicles.

Remedies sought. In addition to requesting certification of a class of owners and lessees of Mercedes-Benz vehicles affected by the October 2017 recall, the complaint seeks damages for actual, consequential, and incidental losses, plus punitive damages, attorney fees, and court costs.

The case is No. 2:18-cv-3610.

Attorneys: Benjamin Jared Meiselas (Geragos and Geragos APC) for Michael Oppenheim.

Companies: Mercedes-Benz USA, LLC

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