Pairing map with EPA mileage claims can misrepresent real-world mileage

Kim v. General Motors, LLC, 99 F. Supp. 3d 1096 (C.D. Cal.
Kim sued GM for misleadingly advertising EPA estimated
mileage figures and numbers derived from these figures as “actual, expected
mileage under normal, real world driving conditions.”  Kim’s 2011 GMC Terrain crossover vehicle was
sold via a brochure, “Going the Extra Mile to Make the Most Out of Every Inch,”
that claimed that the Terrain “has the best highway fuel economy in its class
at 32 highway miles per gallon” and included a chart with the language “UP TO
600 HWY Miles.” Next to this chart was a map outlining a route from Chicago,
past Cleveland and Buffalo, to Rochester, New York (more than 600 miles). And
so on (with “EPA estimated” in fine print). 
In a 2011 press release, Don Johnson, GM’s Vice President of United
States Sales Operations, was quoted as saying that “[c]ustomers love the
610–mile range that our compact crossovers provide and they get it without
sacrificing capability or style.”  GM’s
Chevrolet website for its “Equinox” vehicle also claimed “32 MPG highway and a
highway driving range of up to 600 miles….” The only mention of an “EPA
estimate” was in a footnote in reference to “class-leading highway fuel
economy,” not “32 MPG highway,” and, in order to view the footnote, the user had
to drag the mouse over the text entitled “view additional disclosures” at the
bottom of the web page. Many ads didn’t disclose that the actual real world
mileage “will vary.”
Kim brought the usual California claims. First, the court rejected
GM’s preemption defense.  Federal law
provides that “When an average fuel economy standard prescribed under this
chapter is in effect, a State or a political subdivision of a State may not
adopt or enforce a law or regulation related to fuel economy standards or
average fuel economy standards for automobiles covered by an average fuel
economy standard under this chapter.” 
But “standards” manufacturers must follow are not the same as advertised
fuel economy estimates. 
Similarly, federal law preempts any “law or regulation on
disclosure of fuel economy or fuel operating costs for an automobile” that
isn’t identical to federal law about EPA-mandated estimates on the required
label on a car.  However, Kim wasn’t
arguing that disclosure of the EPA mileage estimates was, by itself, deceptive.
Instead, the argument was that GM made additional statements that were
misleading, and federal law didn’t address those.  Kim was hallenging “GM’s use of the EPA
estimates in a way that may give consumers the mistaken impression that they
are able to achieve real-world mileage and tank range derived from those
figures,” and that wasn’t preempted.
There was also no conflict preemption, despite extensive
federal regulation of EPA estimates.  GM
claimed that if “an EPA estimate included in a ‘window sticker’ is not a
‘warranty’ under federal or state law … then surely any claim that the mere
inclusion of this same estimate in an advertisement is such a guaranty,
warranty  or promise flatly conflicts
with federal law.” Under federal law, car dealers must have a window sticker on
every new vehicle, detailing, among other things, the fuel economy of the
vehicle and estimated annual fuel costs. But nothing in federal law purported to
regulate advertising of fuel economy beyond specific requirements for the
stickers and associated booklets.  There
was no reason to think Congress wanted to preempt state regulation of
misleading advertising.
The FTC permits automobile manufacturers “to advertise the
EPA estimates and make the disclosures required by the FTC for that kind of
advertising, or to advertise non-EPA estimates and make the much more onerous
FTC-required disclosures for that kind of advertising.”  However, while the FTC regarded the phrase
“EPA estimate(s)” as the “minimum disclosure necessary to comply with [this
regulation]” within all media platforms, the FTC didn’t prevent states from
applying stricter disclosure standards under their false advertising laws.
Two of Kim’s three alleged misrepresentations were nonetheless
insufficient to state a claim.  Claims
that GM didn’t adequately disclose the “EPA estimate” or omitted “actual
mileage will vary” were insufficient; GM did nothing more than use footnotes to
comply with federal disclosure rules. The FTC Industry Guide governing fuel
economy advertising specifically states that “inclusion of the phrase ‘EPA
Estimate(s)’ is sufficient without more to comply with the FTC’s regulations.”
However, the third set of misrepresentations was adequately
pled.  The alleged 600-mile range was
supplemented with a map showing a 600-mile route, which could lead a reasonable
consumer to believe that she would actually get 600 miles on a single tank of
gas in the real world.  These claims went
above and beyond the EPA mandated estimates. 
“[T]he purpose of EPA fuel economy estimates is to provide a consistent
basis for comparing the fuel economy of competing vehicles relative to each
other, and … such estimates are not designed to determine the actual expected
mileage for a vehicle under ‘real world’ driving conditions.”  GM attempted to blur the line between that
and the real world, and this was potentially actionable.

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