Message:
Magnuson-Moss Warranty Act The Magnuson-Moss Warranty Act, 15 USC 2301, et seq, is designed to put "teeth" into state law warranty rights. The Act applies to all consumer goods with a value of $25.00 or more, and covers express written warranties, as well as warranties "arising under state law". 15 USC 2301 (1), 15 USC 2310(d)(3). The Act prohibits the disclaimer of the implied warranty of merchantability (MCLA 440.2314) if the vehicle is sold with a written warranty or service contract. See, 15 USC 2308(c) (warranty disclaimer ineffective even where permitted under state law). Further, the Act nullifies the privity defense, expressly permitting revocation against a remote manufacturer. See, Ventura v Ford Motor Co., 180 NJ Super 45, 433 A2d 801 (App Div 1981) (Act broadens remedies available to consumers by eliminating state law privity requirements). Remedies under the Act include a refund or replacement (at the consumer's option), as well as recovery of costs and attorney fees. 15 USC 2310 (d). Recently, in Jordan v Transnational Motors, 212 Mich. App 94 (1995), the Court of Appeals held that the trial court had abused its discretion in failing to consider the remedial nature of the Act in determining appropriate attorney fees. Essentially, the Court opined that the remedial nature of the Act would be thwarted if attorneys were unable to obtain a reasonable return in these cases. Practice tip: Pre-litigation resort to the manufacturer's ADR is required only if the ADR program meets Magnuson-Moss guidelines. The guidelines dictate that the warranty must include a statement requiring the consumer to resort to ADR before pursuing a civil action. If the warranty does not include such a statement, then the consumer is free to proceed immediately to court. The guidelines further require that the ADR process be completed within 40 days after the consumer notifies the ADR mechanism of the dispute. At least with respect to the "big three" (GM, Ford and Chrysler), it is this author's experience that the ADR process is almost never timely completed, and that the warranty documents do not contain the requisite statement requiring the consumer's participation. Thus, for all practical purposes, the ADR requirement is rarely an impediment to recovery of fees and costs.