N.J. Judge Grants BMW’s Motion to Compel 3G Telematics Claims to Arbitration

U.S. District Judge Susan Wigenton for New Jersey in Newark granted BMW of North America's motion to dismiss plaintiff Peter Grayson’s 3G telematics claims and to compel those claims to arbitration, said her signed letter opinion Monday (docket 2:22-cv-06103). Grayson’s class action alleged BMW did nothing to preserve its vehicles’ roadside safety features during AT&T’s 3G service shutdown, and BMW responded that Grayson signed an “unambiguous” arbitration agreement (see 2301310001). Grayson doesn’t “contest the validity” of the arbitration clause in the roadside services subscriber agreement, said the judge’s letter opinion. He instead “challenges the scope” of the subscriber agreement and urges the court to say the agreement isn’t at issue because the outdated telematics equipment in his car is “a physical component of the vehicle” and isn’t covered by the roadside services agreement, it said. But when reviewing the allegations in his complaint, Grayson’s argument is “unavailing,” it said. Case law shows “a heavy presumption in favor of enforcing arbitration clauses,” said the opinion. Court precedent also shows arbitration shouldn’t be denied unless it may be said with “positive assurance” that the arbitration clause isn’t susceptible to an interpretation that covers the asserted dispute, it said. Grayson hasn’t shown with positive assurance “that his claims are outside the scope of the arbitration agreement,” it said. Though Grayson asserts his action concerns the “operability of a piece of hardware that is a physical part of BMW cars," his lawsuit “ostensibly pertains to the loss of service” due to the inability of the telematics equipment “to adapt to upgraded wireless service,” said the opinion. As such, the facts and allegations implicate the roadside services subscription agreement and its arbitration provisions, “as the loss of service is inextricably intertwined throughout the allegations,” it said. “At bottom,” the complaint doesn’t solely allege there’s a defective physical vehicle part at issue, said the opinion. It rather alleges a “presumably functioning physical vehicle part” can no longer enable a service Grayson desires to use “because wireless carriers have upgraded their capabilities past the functional usage of the part,” it said. These allegations “specifically concern the loss of service in conjunction with the design of the part, and thus directly implicate” the service agreement and its arbitration clause, it said.