Summary: MMR Strategy Group was retained by a class of plaintiffs in a false and deceptive advertising case to measure purchasers’ and lessees’ understanding of marketplace communications disseminated by BMW, and whether this information affected their purchasing or leasing decisions.
Case Facts: Not Fast, But Furious
BMW Motors is internationally known for manufacturing luxury automobiles. In addition to the vehicles’ performance, many buyers are also interested in mitigating the environmental effects of gas-powered vehicles. For those drivers looking to reduce carbon emissions while not sacrificing the “ultimate driving machine” experience, many luxury vehicle manufacturers have developed and released electric cars and hybrid models of cars. The BMW i3 with Range Extender, released in 2014, added a small gasoline engine to extend the amount of time the vehicle could be driven before the battery needed a new charge. It was the answer many consumers were looking for–until customers began experiencing a defect.
In 2016, driver Edo Tsoar filed a proposed class-action complaint when he found that his 2015 BMW i3 with Range Extender slowed going up a hill when the Range Extender kicked in. Edo Tsoar v. BMW of North America LLC, Case No. 2:16-cv-03386 (C.D. Cal. 2016) alleges breach of implied warranty, breach of express warranty, consumer protection, and fraudulent concealment against BMW. According to the complaint, i3s from the 2014-2018 model years with the optional Range Extender could not travel at safe speeds on interstates or uphill in the gasoline mode with a low charge on their batteries, because when the charge on the batteries drops below a certain threshold, the Range Extender is activated, dramatically slowing the vehicle to speeds that may not be safe under highway conditions. Despite this, the complaint said, the Range Extender feature was an additional $4000 more than other models that were solely lithium battery powered.
MMR Strategy Group president and testifying expert Dr. Bruce Isaacson was retained to measure purchaser and lessee understanding of the functionality of the Range Extender, and whether they were properly warned of the defect and the materiality of the Range Extender feature to their purchasing behavior.
MMR Materiality Survey Research Design
To produce a reliable measure of whether consumers were properly informed of the functionality of the Range Extender, and whether they would have paid more or less for the feature, MMR Strategy Group designed a materiality survey. The online survey measured whether it was the respondents’ understanding, at the time they purchased or leased their BMW i3 with Range Extender, that when the Range Extender is activated, the vehicle may automatically slow down to a maximum speed that may be too slow for highway driving. The survey also measured whether, if certain information had been respondents’ understanding about how the Range Extender operated, that understanding would have changed respondents’ decisions to purchase or lease their vehicles.
The survey respondents were qualified as, among other things, having purchased or leased a 2014, 2015, and/or 2016 BMW i3 with Range Extender in the past six years. (BMW provided a list of customers for the vehicle, but it did not participate further.) MMR qualified 160 respondents, and they were interviewed from October 31, 2019 to November 22, 2019. The survey used control statements to filter for bias, preexisting attitudes, and potential inattention or survey fatigue.
MMR Research Findings
After accounting for the control group, 31.2% of respondents answered that it was their understanding that the BMW i3 Range Extender would slow when activated to a speed unsafe for highway driving. Similarly, a net 21.6% of respondents answered that they would have been less likely to purchase or lease the BMW i3 with Range Extender had they known it would make the vehicle too slow for highway driving 6%.
Ruling and Conclusion
The court relied on the materiality survey research from MMR Strategy Group in this matter. This class action, alleging that BMW hid this defect from customers and sold the car for more than it is worth, was dismissed in 2021. MMR also submitted an additional expert report and amended report in this action, measuring vehicle usage and purchase behaviors among owners of the BMW i3 with Range Extender.
If you represent a class of consumers in a class-action matter or are defending your product or service, and are in need of reliable, court-ready measures of consumer preferences, MMR can help. Contact us if you are interested in learning more.