Case 2:18-cv-04363 Document 1 Filed 03/27/18 Page 1 of 245 PageID: 1 James E. Cecchi Steve W. Berman CARELLA, BYRNE, CECCHI, HAGENS BERMAN SOBOL SHAPIRO LLP OLSTEIN, BRODY & AGNELLO, P.C. 1918 Eighth Avenue, Suite 3300 5 Becker Farm Road Seattle, WA 98101 Roseland, NJ 07068 Telephone: (206) 623-7292 Telephone: (973) 994-1700 Facsimile: (206) 623-0594 Facsimile: (973) 994-1744 [email protected] [email protected] Attorneys for Plaintiffs and the Proposed Class UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY GARNER RICKMAN, ZIWEN LI, and GARY Civil Action No. REISING, individually and on behalf of all others similarly situated, Plaintiffs, v. BMW OF NORTH AMERICA LLC, a Delaware COMPLAINT and corporation; and BAYERISCHE MOTOREN DEMAND FOR JURY TRIAL WERKE AKTIENGESELLSCHAFT (BMW AG), a corporation organized under the laws of Germany, Defendants. Case 2:18-cv-04363 Document 1 Filed 03/27/18 Page 2 of 245 PageID: 2 TABLE OF CONTENTS Page I. INTRODUCTION ...............................................................................................................1 II. JURISDICTION ..................................................................................................................8 III. VENUE ................................................................................................................................8 IV. PARTIES .............................................................................................................................9 A. Plaintiffs ...................................................................................................................9 1. Colorado Plaintiff.........................................................................................9 a. Garner Rickman ...............................................................................9 2. Maryland Plaintiff ......................................................................................10 a. Ziwen Li .........................................................................................10 3. Pennsylvania Plaintiff ................................................................................12 a. Gary Reising ..................................................................................12 A. Defendants .............................................................................................................13 1. BMW North America LLC (“BMW USA”) ..............................................13 2. Bayerische Motoren Werke Aktiengessellschaft .......................................14 3. The Bosch Defendants ...............................................................................14 V. FACTUAL ALLEGATIONS ............................................................................................21 B. The environmental challenges posed by diesel engines and the U.S. regulatory response thereto .....................................................................................................21 C. Both the X5 and 335d share a common diesel engine. ..........................................25 1. Injection timing and in-cylinder controls ...................................................28 2. EGR – Exhaust Gas Recirculation .............................................................29 3. DOC – Diesel Oxidation Catalyst ..............................................................30 4. DPF – Diesel Particulate Filter ..................................................................31 - i - Case 2:18-cv-04363 Document 1 Filed 03/27/18 Page 3 of 245 PageID: 3 5. DEF Injector...............................................................................................32 6. SCR – Selective Catalytic Reduction ........................................................32 7. U.S. NOx Emissions Standards .................................................................33 8. Test Cycles .................................................................................................35 D. BMW promoted the X5 and 355d vehicles as clean and environmentally friendly because BMW knew the environment and fuel economy are material to a reasonable consumer. .............................................................................................37 E. The BMW emission deception = emission manipulation. .....................................57 1. The diesel test setup. ..................................................................................57 2. PEMS testing is reliable and accurate. .......................................................58 3. Testing results indicate higher than expected emissions. ..........................63 4. The test vehicle is representative of all BMW X5 and 335d vehicles. ......63 5. The Polluting BMW Vehicles emit more than expected and exceed emissions standards. ...................................................................................64 a. Highway Testing. ...........................................................................64 b. Highway Testing on Hills. .............................................................67 c. Stop and Go Testing.......................................................................69 d. Dynamometer Testing. ...................................................................70 e. Comparison to On-Road FTP-75 – Phase 2. ..................................73 f. Comparison to On-Road FTP-75 – Cold and Hot Starts. ..............75 F. The Bosch EDC17. ................................................................................................77 G. Bosch played a critical role in the defeat device scheme in many diesel vehicles in the United States, giving rise to a strong inference that Bosch played a key role in implementing the BMW emission strategy............................................................83 1. Volkswagen and Bosch conspire to develop the illegal defeat device. .....83 2. Volkswagen and Bosch conspire to conceal the illegal “akustikfunktion.”86 - ii - Case 2:18-cv-04363 Document 1 Filed 03/27/18 Page 4 of 245 PageID: 4 3. Volkswagen and Bosch conspire in the United States and Germany to elude U.S. regulators who regulated not just Volkswagen diesels but all diesels. ........................................................................................................87 4. Bosch keeps BMW’s secret safe and pushes “clean” diesel in the United States as a concept applicable to all diesel car manufacturers. ..................88 5. Bosch is a recidivist cheater: Bosch also made the EDC17 found in FCA vehicles that pollute excessively. ...............................................................91 6. Bosch is a recidivist cheater: Bosch GmbH also made the EDC17 found in polluting Mercedes diesels. ........................................................................93 7. Bosch is a recidivist cheater: Bosch GmbH and Bosch LLC also made the EDC17 found in 700,000 polluting General Motors trucks. ......................93 8. Bosch is a recidivist cheater: Bosch also made the EDC17 found in 500,000 polluting Ford Trucks. .................................................................95 H. Bosch has previously violated U.S. law.................................................................96 I. Bosch also played a critical role in falsely promoting clean diesel technology via the “Diesel Technology Forum.” ...........................................................................96 J. The damage from excessive NOx. .......................................................................102 1. Environmental harm.................................................................................102 2. Economic harm specifically alleged here. ...............................................105 K. The BMW scheme is just the latest in a worldwide diesel emissions cheating scandal that adds plausibility to the allegations here as virtually all diesel manufacturers are falsely advertising their vehicles. ...........................................106 VI. TOLLING OF THE STATUTE OF LIMITATIONS ......................................................109 A. Discovery rule tolling ..........................................................................................109 B. Fraudulent concealment tolling. ...........................................................................110 C. Estoppel................................................................................................................110 VII. CLASS ALLEGATIONS ................................................................................................111 VIII. CLAIMS ..........................................................................................................................114 A. Claims brought on behalf of the Nationwide RICO Class. ..................................114 1. The members of the BMW Diesel Fraud Enterprise ...............................115 - iii - Case 2:18-cv-04363 Document 1 Filed 03/27/18 Page 5 of 245 PageID: 5 2. The predicate acts ....................................................................................122 B. State law claims. ..................................................................................................129 C. Claims brought on behalf of the other state classes by the named Plaintiffs. ......153 COUNT 1 VIOLATION OF THE ALABAMA DECEPTIVE TRADE PRACTICES ACT (ALA. CODE § 8-19-1 ET SEQ. ) ....................................................................................153 COUNT 2 VIOLATION OF THE ALASKA UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION ACT (ALASKA