Mercedes-Benz Mars Red Paint Lawsuit Settlement Upheld

Appeals court rules peeling paint settlement is fair, objectors claim 80% of owners don't qualify.

Mercedes-Benz Mars Red Paint Lawsuit Settlement Upheld

Posted in News

— A Mercedes-Benz Mars Red paint lawsuit settlement will stand after the Court of Appeals for the Eleventh Circuit agreed with the lower court that approved the settlement.

The Mercedes 590 Mars Red paint class action lawsuit alleges defects in the paint, or other problems, cause the paint to fall apart and peel.

Mercedes customer Emily Pinon filed the class action by alleging she purchased her Mercedes in 2016 and the paint quickly "looked as though the clear coat was bubbling and peeling.”

She filed the Mars Red paint class action lawsuit in August 2018, but a few weeks before that, Mercedes customer Robert Ponzio and others filed a similar class action lawsuit.

The judge allowed Pinon to change and refile her class action three times, and Mercedes eventually agreed to settle the case.

Typically when different lawyers file similar class actions, they will team up to consolidate the lawsuits, but the Mercedes paint lawsuits took different paths.

The Pinon settlement was approved as fair and adequate by the judge, but the Ponzio plaintiffs objected by saying the lawyers were receiving more than $4.7 million in fees and expenses, but most vehicle owners would allegedly receive nothing.

The Ponzio objectors argued about 80% of customers are "left completely uncompensated."

They also claim, “the proposed settlement forces tens of thousands of class members to give up their claims against [the defendants] but provides them nothing in exchange.”

In addition, the objectors claim, “only [ ] a small number of class members [ ] are actually entitled to” 100 percent payment, and that “[t]he other class members are destined to the 25 or 50 percent discounts”—a “dubious value because of the fact that if a consumer is going to make a decision as to whether to repaint a portion of the vehicle or the entire vehicle, they’re going to look at what they have to spend and what they would get back if they spent.”

The objectors to the paint settlement also argue, “the overwhelming majority of class members will receive no benefits under the settlement.”

They say if there are 168,817 class members as the Pinon plaintiffs estimate, 99,702 (or 59%) are former owners or former lessees “who are obviously ineligible for future repainting benefits because they no longer possess their Subject Vehicles.”

The district court judge ruled against the objectors and granted the Mercedes red paint settlement which was appealed to the Eleventh Circuit which ruled it agreed with the lower court decision to approve the settlement.