Lawson v. BMW of North America LLC

Background

Michael Lawson alleged that he purchased a 2017 BMW M4 on or about April 4, 2020, and that the vehicle was defective. He alleged that BMW North America’s authorized repair facilities did not adequately repair the defect. Lawson sued BMW North America for breach of express warranty under California law and under the Magnuson-Moss Warranty Act (MMWA), sued Stevens Creek B, Inc. for negligent repair and restitution, and sued CarMax Auto Superstores, Inc. under the MMWA.

The court was considering only CarMax’s motion to dismiss. CarMax had been added as a defendant after the court granted Lawson leave to amend. CarMax argued that Lawson’s MMWA claim failed because he had not also asserted a separate state-law warranty claim against CarMax. CarMax also argued that Utah law applied because Lawson purchased the vehicle from CarMax in Utah and that Lawson had not given the notice required for a warranty claim under Utah law.

Analysis

A motion under Federal Rule of Civil Procedure 12(b)(6) tests whether the complaint contains enough factual allegations to state a legally sufficient and plausible claim. The parties agreed that the MMWA requires a valid state-law warranty claim and does not create an independent warranty obligation in these circumstances. Because Lawson asserted only an MMWA claim against CarMax, the court granted CarMax’s motion to dismiss that claim.

The court separately considered whether Lawson should be allowed to amend. Under the governing amendment standard, leave to amend is ordinarily granted unless factors such as undue delay, bad faith, repeated failure to correct deficiencies, undue prejudice, or futility are present. The court described futility as a close question because Utah law requires a buyer to notify the seller of a breach within a reasonable time after discovering or reasonably discovering it. Lawson had not alleged that he gave CarMax that notice. However, because he had not yet had the opportunity to provide additional allegations, the court could not conclude with certainty that he could not state a claim. The court therefore declined to find amendment futile.

Disposition

Judge Beth Labson Freeman granted CarMax’s motion to dismiss. The dismissal was with leave to amend, and Lawson was ordered to file a second amended complaint within 30 days. The opinion does not state that the court dismissed Lawson’s claims against the other defendants.