The 10 Biggest BMW Lawsuits in Company History
BMW is a German automaker known for producing high-end luxury vehicles. The company has enjoyed a solid reputation internationally, but some consumers have not had good experiences with the vehicles. Certain defects not remedied by the company resulted in numerous lawsuits for the recovery of financial damages. The EEOC and SEC have found the company in violation of regulations and laws concerning anti-discrimination and anti-fraud, resulting in large fines and penalties. BMW has had its share of legal troubles. Here are the ten largest lawsuits in the history of the company.
10. BMW sued for race discrimination Settlement amount: $1.6 million
The United States Equal Employment Opportunity Commission reports that BMW violated fair hiring practice regulations by disproportionately excluding African-American logistics workers at its production facility in Spartanburg, South Carolina. Complaint from logistics workers alleged that high numbers of Black workers had their criminal records pulled and examined. BMW engaged a policy that called for the dismissal of employees with a felony or misdemeanor charges, regardless of when the conviction occurred. The policy also excluded applicants seeking employment with the plant. The EEOC’s investigative team discovered that 80 percent of the logistics workers dismissed were of African-American descent. The company had switched contractors for criminal background screening in 2008, resulting in a change of policy and tightening the restrictions. Previous workers who passed the first screening failed in the 2008 onslaught. A lawsuit was filed in the US District Court for the District of South Carolina. Contingent upon the EEOC’s findings, it was determined that 56 African-American workers discharged were the victims of racial discrimination. BMW was ordered to pay $1.6 million in compensation to resolve the litigation for this and two other pending charges on the matter. BMW is also ordered to offer employment to the workers they discharged and additionally to the 90 other African-Americans who applied for jobs and were turned down because of BMW’s previous criminal records guidelines. BMW is now subject to reporting and monitoring to ensure that the discriminatory behavior does not occur again.
9. Gore v. BMW of North America and appeal lawsuits Settlement amount: $4 million reduced to $2 million
Cornell Law confirms that BMW of North American, Inc was sued for allegations that the dealership in the state of Alabama had repainted a new vehicle, but did not disclose the information to the buyer. The plaintiff contended that failure to disclose the facts resulted in fraud, according to Alabama law. The case was filed in a circuit court in Alabama. The jury determined that the petitioner was entitled to punitive damages for $4 million with an additional $4,000 from BMW in compensation for failure to disclose the facts about the vehicle. The vehicle purchased sustained damage before delivery and required repainting. The punitive damages award was set aside as BMW filed a petition with the Supreme Court of Alabama to appeal the high punitive damages amount. The ASC heard the case and determined that BMW was liable for punitive damages but they reduced the award amount to $2 million. It was stated that the jury did not calculate the compensatory damage amounts correctly. The case was decided on May 20, 1996, after months of arguments and deliberation.
8. Class action lawsuit filed against BMW for faulty cupholders Settlement amount request: $5 million
Driving confirms that BMW has received complaints about its X7 SUV model regarding the cupholders and their faulty design. Owners allege that the cupholders are not designed to hold cups with liquid in them, although that is their intended purpose. The class-action lawsuit further claims that the faulty design causes cups to tip and liquids to seek into the wiring of the airbag system, causing the potential for the airbags to deploy at any time. The cupholders cause problems with electronic parts, rendering them useless and even dangerous. The lawsuit was filed in an Orange County District Court. Damages from a deployment can cost thousands of dollars and incidences are not covered under warranties. Mere condensation on the cut can cause electronic malfunctions in the shifter wiring, disabling the vehicle. An incident occurred that caused the car to shut down and stall while in motion on the left side of the highway. The vehicles can go into Par, mode and will not shift into other gears. BMW charges $2,900 to make such repairs related to water damage. It’s a dangerous situation and BMW is looking at a $5 million class-action lawsuit.
7. Erlich v BMW lawsuit for automotive defects Settlement amount: $10,j000,000 plus
Starr Law confirms that a lawsuit was filed against BMW in a class-action lawsuit. Representatives for the plaintiffs alleged that BMW sold vehicles with a defect in the windshield design that led to the development of stress fractures in the vehicles. Upon investigation, it was discovered that more than one-hundred-thousand vehicles were affected by the defect. The matter went to the jury and they determined that BMW was responsible for the financial damages. The judge ordered BMW to pay a settlement amount of more than 10 million in compensation.
6. The US Securities and Exchange Commission penalizes BMW for violating disclosure regulations $18 million
The US SEC investigated Bayerische Motoren Werke AG and two of the automaker’s subsidiary companies in the United States for allegations of failure to disclose information to corporate bond investors. Investigators for the SEC discovered that BMW inflated reports of its retail sales figures, falsely claiming vehicles were sold when they were still on the market. The company supplied potential investors with inaccurate sales figures, to raise capital through corporate bond sales. BMW’s manipulation of its sales figures is illegal and results in violations of the law, for which BMW, BMW US Capital, and BMW of North America were penalized $18 million for the offenses.
5. BMW sued over defective timing chains Settlement amount: $92 million
Law.com reports that a lawsuit was filed against BMW alleging that the timing chains in certain vehicle models were defective. The class-action lawsuit was filed in a federal court in Newark, New Jersey. The judge ordered BMW to pay a settlement amount of $92 million in compensation for vehicle owners affected by the defective parts. It was further ruled that legal fees owed by BMW would be determined at a later date, somewhere between $1.5 and $3.7 million. BMW’s attorneys stated that they will not contest additional court costs and legal fees that fall within this range.
4. BMW used for Auto Air Bag defects Settlement amount: $131 million
Auto-Air Bags reports that BMW was sued for the manufacture, distribution, and sale of vehicles containing defective Taketa inflators in its airbags. The components were found to be dangerous with the potential to rupture and shoot shrapnel into the cabin of the vehicle upon deployment. Some plaintiffs sustained financial loss from the deployment of dangerous airbags. the lawsuit covers financial injury for all persons who owned or leased a vehicle covered under the lawsuit after April 11, 2013, through June 9, 2017. The settlement does not cover personal injury or property damage claims that may arise. The lawsuit for the amount of $131 million is set for finalization in August of 2022. This is a case that is settled for the consumers that file a claim for compensation for repair costs. Other plaintiffs might step forward and file lawsuits for personal injury or damage to property for the same issues stated here.
3. BMW fined along with Volkswagen in collusion charges on emissions technology Settlement amount: $442 million
Volkswagen and BMW received joint fines that tally almost $1 billion for failure to comply with emissions regulations. The European Commission accused BMW of colluding with Volkswagen, along with its Porsche and Audi divisions. Daimler served as a whistleblower, avoiding its share of the fine. BMW, Daimler, and Volkswagen made illegal agreements on emissions treatment technology. Millions of vehicles were sold with emissions technology that released illegal levels of diesel pollution into the environment. European antitrust officials thoroughly investigated the charges and found Volkswagen and BMW guilty of all charges. Collusion to commit illegal acts carries fines and possible criminal charges. BMW was wise to settle for the $442 million amount along with Volkswagen. They had little room to dispute the allegations when Daimler turned on them for immunity for their testimony revealing the plot to commit illegal acts.
2. BMW sued for defects in vehicles causing water damage to trunks Settlement amount: $477.7 million
Europe Auto News confirms that plaintiffs filed a class-action lawsuit against the BMW Group because of allegations of defects in the vehicles that led to water damage in the trunks that caused problems with electrical components. The issues happened because of clogs in the drainage tubes of sunroofs and other design defects that allowed water to leak into the trunks, affecting sensitive electrical components. A US District Court in New York ruled that BMW was liable for potential claims from as many as 318,000 BMW vehicle owners with models affected. BMW agreed to a settlement of $477.7 million. The compensation got set for BMW 5-Series owners between 2004 through 2010. The individual amounts were up to $1,500 each in reimbursements for necessary repairs to the cars. Vehicles under ten years of age with less than 120,000 miles are eligible for inspections and repairs for no charge.
1. Lawsuit filed against BMW for Sudden Engine Failure Settlement amount: Up to $800 million
Forbes reported in 2015 about a lawsuit filed against BMW for defects within the BMW 520 d Touring Model that caused a catastrophic electronic malfunction in traffic. All power to the car turned off suddenly, disabling the vehicle in Lennestadt-Maumke, Germany. Similar incidences occurred in US models of the car advertised as the ultimate driving machine. Technical issues such as water damage under the spare tire of some models, electrical system shortages, and more. Wet wires resulted in numerous alerts displaying. The control systems of some models issued multiple warnings. Drivers experienced headlamps, indicators, and other functions malfunctioning or shutting down. BMW recalled 700,000 vehicles with the potential for defects in 2015. Previous recalls happened in 2010 when fule pumps failed from defects in 130,000 BMW vehicles. Several models were affected by defects in the electrical systems. Numerous BMW models were affected by these defects over the years, resulting in a class-action lawsuit with the potential for $800 million in compensation for repairs possible for repairs to faulty design problems related to sudden engine failure. This action was the second lawsuit settled by BMW for the same issue with water damage in trunks, leading to electrical failures.
Final thoughts
BMW has paid more than a billion dollars in fines, penalties, and damages for defective vehicle designs. Not all lawsuits are open to the public because some cases settle with stipulations that seal them from public view. Class-action suits are usually more publicly available, and in most cases, they are the highest settlements. BMW had a bad run with its water damage issues in the trunk, spawning two separate class-action lawsuits. Additionally, faulty cupholders caused yet more water damage. Water damage caused problems with the electrical systems. The issues ranged from malfunctioning systems to total vehicle shutdown. The luxury German automaker has had its share of legal battles. They’ve been sued for discrimination in hiring violations, misstatement of the facts, spurring violations in disclosure laws with false reporting of financial information, and skewing financial data to sell corporate bonds. These are the legal actions made public. It’s hard to say what may exist within the sealed legal records.
