— A Mercedes-Benz class action lawsuit alleges the "mbrace" feature turned into an obsolete dinosaur when 3G wireless communication system networks were phased out.
Wireless networks replaced 3G service with improved 4G and 5G cellular technology.
The Mercedes mbrace subscription service allowed customers to access various entertainment, safety and security features, including roadside assistance and smartphone integration.
Plaintiffs Jim Rose and Anita Gian filed the class action lawsuit after Mercedes dealers refused to replace the mbrace systems for free when 3G was phased out permanently.
Once the mbrace class action was filed, Mercedes-Benz contacted the plaintiffs and told them they were bound by arbitration provisions when they subscribed to the mbrace service. The plaintiffs were informed the claims must be resolved through arbitration, but the plaintiffs refused.
According to the plaintiffs, they never agreed to arbitrate their claims against Mercedes.
Mercedes-Benz mbrace Lawsuit Dismissed
Mercedes-Benz filed a motion to compel arbitration and the district court judge hearing the case dismissed the lawsuit by finding the plaintiffs had agreed to arbitrate their claims. The plaintiffs appealed the lawsuit dismissal to the U.S. Court of Appeals for the Seventh Circuit.
Both plaintiffs do remember activating a free, limited-time subscription to the mbrace service. And when the free subscription expired, each subscribed to the service for a monthly fee. However, the plaintiffs complain they didn't know about the arbitration provision.
Mercedes’s Supervisor of Product Technical Support was responsible for the mbrace subscription service and testified how the process works. Calls are recorded, and the plaintiffs do not dispute his testimony.
When a Mercedes customer contacts the mbrace call center, a representative informs the caller of the agreement and where to locate and review the agreement on the Mercedes-Benz website.
The appeals court notes how such information "would place a reasonable person on notice that initiating a subscription would trigger the Terms of Service and that it would be prudent to review the Agreement before subscribing."
However, the plaintiffs still argue they didn't know about the agreements and cannot be held to the terms.
The mbrace terms of service says it constitutes a “Binding Agreement” between subscribers to the mbrace service and Verizon Telematics, with Mercedes listed as a third-party beneficiary under the agreement.
According to the mbrace agreement:
“YOU WILL HAVE AGREED TO THESE TERMS OF SERVICE … BY SPEAKING WITH A CUSTOMER SERVICE REPRESENTATIVE … AND CONFIRMING THAT YOU WISH TO SIGN UP FOR THE SERVICE.”
The agreement also says the parties:
“AGREE THAT, TO THE FULLEST EXTENT PROVIDED BY LAW … ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO … ANY PRODUCT OR SERVICE PROVIDED UNDER OR IN CONNECTION WITH THESE TERMS OF SERVICE … WILL BE SETTLED BY INDEPENDENT ARBITRATION.”
The appeals court affirmed the district court dismissal by finding the plaintiffs must arbitrate their claims.
"Simply put, Mercedes has presented unrebutted evidence that mbrace subscribers receive notice of the arbitration provision in the Agreement prior to initiating their subscriptions. And Plaintiffs assented to the Agreement by subscribing to the service." — Seventh Circuit
The Mercedes-Benz mbrace class action lawsuit was filed in the U.S. District Court for the Northern District of Illinois: Jim Rose, et al., v. Mercedes-Benz USA, LLC, et al.
The plaintiffs are represented by McCune Law Group.
