In Grosse Pointe Law Firm, PC v. Jaguar Land Rover North America, LLC, 2016 WL 5266724 (Mich. App.2016), the Michigan Court of Appeals joined courts from several other jurisdictions in holding that a written “repair or replace warranty” (“RRW”) is not a “warranty” as defined under of § 2-313(1) of the Uniform Commercial Code (“UCC or “the Code”). See, e.g., Mydlach v. DaimlerChrysler Corp., 226 Ill.2d 307 (2007). Warrantors should take heed. Continue reading
Tag Archives: Magnuson-Moss
The District Court for New Jersey has denied microwave distributor Electrolux Home Products, Inc.’s arguments that plaintiff’s breach of implied warranty and Magnuson-Moss Warranty Act claims are time barred.
In Gorczynski v. Electrolux Home Prods., the plaintiff brought claims stemming from an alleged defect in stainless steel microwave handles manufactured and distributed by the defendants, claiming these handles become excessively hot when a consumer cooks on an active stovetop below the over-the-range microwaves.
The defendants sought to dismiss these claims under a number of theories, but the court rejected all of them.
Most interesting is the court’s treatment of Defendant Electrolux’s argument that plaintiff’s breach of the implied warranty of merchantability and Magnuson-Moss Warranty Act claims were time barred. Included in the last page of the subject microwaves’ user manuals, Electrolux included a statement that any claims based on the implied warranty of merchantability are limited to one year. And as required by regulations promulgated under the Magnuson-Moss Act, the manual went on to state that some jurisdictions do not allow a limitation on the duration of implied warranties, so the limitation may not apply to a given consumer. This additional language is crucial, but not in the way the court seems to believe.
The Third Circuit has ruled that any reduction in the duration of the statute of limitations for breach of implied warranty must be conspicuous, defined as “so written that a reasonable person against whom it is to operate ought to have noticed it.” See Gladden v. Cadillac Motor Car Div., 83 N.J. 320, 331 (N.J. 1980). However, where such limitation is not conveyed in “clear an understandable language[,]” they are “generally regarded as improper or invalid[.]” Id. at 335. Here, it is the federally mandated language that the court finds offensive and prevented the defendant from prevailing in its arguments. Because the written warranty points out that a consumer may have other rights that vary from state to state, the court found an average consumer not fully versed in the specific limitations on a state-by-state basis is likely to be confused. Accordingly, the court found it would not be clear and conspicuous to a consumer whether the limitation applied to him, and defendant’s motion to find plaintiff’s breach of warranty claim time barred was denied. Because plaintiff’s Magnuson-Moss Warranty Act claims are coextensive with the underlying state warranty claim, the court likewise allowed these claims to proceed.
The court’s conclusion here runs contrary to 16 C.F.R. §701.3(a), the Federal Trade Commission regulation that requires consumer product warrantors to make detailed disclosures of information necessary to allow consumers to understand written warranties—specifically §701.3(a)(7), which requires any limitation on the duration of an implied warranty to include the language: “Some States do not allow limitations on how long an implied warranty lasts, so the above limitation may not apply to you.”
How can the same statement both be legally required as necessary for consumers to understand written warranties, and at the same time lead the court to find it likely to mislead or confuse customers? The court may not have perceived this seeming disconnect, but if it did, it made no effort to make sense of it. One potential explanation is that the court took issue not with the language notifying consumers of varying state law, but with the year-long limitation itself, which was written with finality: “Claims…are limited to one year or the shortest period allowed by law.” But the Uniform Commercial Code’s statute of limitations, which applies to Magnuson-Moss claims, permits a warrantor reducing the time for filing a breach of warranty claim from four years to “not less than one year.” The court also looked askance at the defendant’s statement that “[t]his written warranty gives you specific legal rights. You may also have other rights that vary from state to state.” This, too, is a federally mandated statement; it must appear in all consumer product warranties. The court’s lack of awareness of federal warranty requirements leaves manufacturers with uncertainty as to how to proceed in drafting future disclaimers, at least when their products are distributed in New Jersey.
The court also rejected defendant’s argument that plaintiff’s claims would be subsumed under the New Jersey Products Liability Act; the court set this argument aside by observing that the plain language of the Act limits its application to situations where a product causes damage or harm to something other than the product itself. N.J.S.A. 2A:58C1(b)(3). As the plaintiff only alleged the defect in the microwave handle damaged the usefulness and value of the microwave itself, the court found the Act explicitly excluded plaintiff’s claims from its coverage.
The court likewise rejected defendant’s argument – that plaintiff failed to state a claim under the New Jersey Consumer Fraud Act – finding plaintiff adequately alleged (1) unlawful conduct; (2) an ascertainable loss; and (3) a causal relationship between the conduct and that loss. See International Union of Operating Engineers Local No. 68 Welfare Fund v. Merck & Co., 929 A.2d 1076 (N.J. 2007). Though defendants argued plaintiff failed to meet the heightened specificity requirements of Federal Rule of Civil Procedure 9(b) in bringing a claim founded on fraud or misrepresentation, the court opined that because plaintiff premised at least part of defendants’ alleged consumer fraud violation on an affirmative misrepresentation that the microwaves were suitable for over-the-range use, plaintiff sufficiently alleged the falsity of this representation.
How should damages be measured in an action for breach of repair-and-replacement warranty? And what elements of damages should available? I recently ran across a piece I wrote addressing these questions in 2005. Remarkably – or, perhaps, not so remarkably given the pace at which the law evolves – it remains relevant; so I thought I’d put it out there for comment. Continue reading
“Merchantability” is one of those legal terms-of-art that defies precise definition. Courts ruling on implied warranty of merchantability claims generally frame the question as whether the product was “reasonably fit for its intended purpose.” But what any given jury will find to be “reasonable” is anyone’s guess. So better for the defendant that the case never get to the jury. I think Chrysler might agree. Continue reading
It is quickly moving beyond dispute that federal consumer protection law favors binding arbitration over litigation. A North Carolina federal trial court recently joined two federal appellate courts in ruling that the federal warranty law, the Magnuson-Moss Warranty Act, does not ban binding arbitration provisions in consumer product warranties. This is good news for consumer product manufacturers, and better news for consumers if more companies turn to binding arbitration.
A warranty plaintiff can’t make a commercial truck (or its auxiliary air conditioner) a “consumer product” simply by calling it one, but he can state an implied warranty claim by alleging that it didn’t work right. Continue reading
A recent decision suggests that the bar for finding a product maker or seller liable for breach of the implied warranty or merchantability may be getting higher – or at least that its true height may be becoming more clear.
For product makers and sellers, breach of implied warranty claims can be particularly difficult to defend. The “not reasonably fit for intended use” liability standard normally applied to claims of this type is rather amorphous. It can be given widely varied interpretations depending on who is doing the interpreting and how sympathetically the person making the claim is viewed. As a result, even relatively minor product problems are too often found sufficient to support liability, particularly in cases involving cars, RVs, and other high-ticket consumer goods.
But a favorable trend may be developing. Continue reading