3G Telematics Plaintiff Signed ‘Unambiguous' Arbitration Pact, Says BMW

BMW of North America answered plaintiff Peter Grayson’s class-action allegations it did nothing to preserve its vehicles’ roadside safety features during AT&T’s 3G shutdown with notice of its motion to compel his dispute to arbitration. BMW’s answer Monday (docket 2:22-cv-06103) in U.S. District Court for New Jersey in Newark was the first automaker response filed in similarly structured 3G telematics complaints against Ford, Nissan, Porsche and Volkswagen. It appears to foretell the defenses that will be asserted when their briefing deadlines approach in February and March.

Plaintiffs Martin Bennett and Brian Welikson filed notice Monday of voluntary dismissal, without prejudice (docket 2:22-cv-08147), of their claims against Toyota North America in U.S. District Court for Central California in Los Angeles.

When Grayson bought his 2014 BMW 428i xDrive Coupe in May 2014, “there was no suggestion” the BMW Assist roadside service feature on his new vehicle “would be rendered obsolete” or “was only temporary or had only a limited life,” said his Oct. 17 complaint. “To the contrary,” it said, BMW marketed BMW Assist “as a permanent feature” of the car, it said. Grayson, a New Jersey resident, and members of his proposed class “suffered injury” and were damaged by BMW’s “unconscionable practices and breaches of its warranties.”

BMW’s answer didn’t defend against Grayson’s allegations it failed to upgrade its vehicles’ telematics equipment -- even as other automakers like General Motors did -- as AT&T gave advance notice it would sunset its 3G service in February 2022. Instead, BMW argued Grayson entered into a “valid and unambiguous arbitration agreement” that requires him to “arbitrate the claims asserted” in his complaint. The filing includes a redacted copy of the May 2014 BMW Assist subscriber agreement bearing his signature. In all upper case in the contract are the terms of his agreement to arbitrate any “controversy, dispute, or claim.”

The court must dismiss Grayson’s complaint and compel him to arbitrate his claims, “as he agreed,” said BMW. The Federal Arbitration Act requires the court to “consider a two–step inquiry before compelling arbitration,” it said. It must first confirm a valid arbitration agreement exists, and then determine whether the parties’ dispute “falls within the scope of the arbitration agreement,” it said: “Both inquiries are met here.”

Grayson “assented” to the arbitration agreement “in exchange for the benefits” of the telematics system as described in the subscriber agreement he signed, said BMW. His signature on the agreement “indicates a clear intent to agree to the terms set forth in it,” it said.

Grayson and BMW “had a clear meeting of the minds regarding the resolution of any dispute” arising from the subscriber agreement, said BMW. The arbitration agreement is “valid,” it said. Additionally, the language in the arbitration agreement “clearly and unambiguously explained the parties’ waiver of their right to a judicial forum and jury by detailing the judicial processes unavailable to the parties in the arbitration process in capitalized font,” it said.

Grayson’s claims “fit squarely within the scope” of the arbitration in the BMW Assist contract he signed, said BMW. “There is a strong preference under New Jersey law to resolve any ambiguities in arbitration clauses in favor of compelling arbitration,” it said. Courts may not deny arbitration unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute, it said. Doubts should be resolved in favor of coverage, it said.