1.2.1 Magnuson-Moss Warranty Act
The federal Magnuson-Moss Warranty Act17 is central to most consumer warranty cases. The Act substantively regulates consumer warranty terms and remedies, and specifies disclosure requirements. A key concept in the Act is the term “written warranty,” which refers to those express warranties that are in writing and that meet certain standards specified by the Act. The Act also has important applications to claims based on breaches of implied warranties and service contracts.
The Act provides attorney fees and actual damages for any breach of a written warranty, implied warranty, or service contract. As the Uniform Commercial Code (UCC) does not provide attorney fees for warranty breaches, in most cases consumers should add a Magnuson-Moss claim to a warranty action. The Act restricts federal court jurisdiction of claims under the Act, so most Magnuson-Moss cases are litigated in state court. It is also difficult for a defendant to remove a Magnuson-Moss claim to federal court. Class actions under the Act will also typically be brought in state court, although the Class Action Fairness Act of 2005 makes filing in or removal to federal court easier.18
The Act does not create new warranties, but sharply limits disclaimers of implied warranties. The Act also eliminates some of the privity of contract requirements by which some states still mandate that the plaintiff and defendant in a warranty action have a direct contractual relationship. The Act also places some restrictions on a seller’s ability to limit the consumer’s remedies. The Act authorizes the Federal Trade Commission (FTC) to promulgate rules to expand and define certain provisions, and the FTC has done so to a limited extent.19
This treatise examines the Act in detail in Chapter 2, infra, and also considers, throughout this treatise, the impact of the Act on specific warranty law issues. The Act is reprinted in Appendix A, infra, and the Federal Trade Commission’s Magnuson-Moss rules are reprinted in Appendix B, infra.