Title: JOHN ABELA V GENERAL MOTORS CORP

State: michigan

Issuer: Michigan Supreme Court

Document:

Michigan Supreme Court  
Lansing, Michigan 48909  
Chief Justice 
Justices 
Maura D. Corrigan 
Michael F. Cavanagh 
Elizabeth A. Weaver 
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr. 
Opinion 
Stephen J. Markman 
FILED APRIL 7, 2004  
JOHN and BARBARA ABELA, 
Plaintiffs-Appellants, 
v 
No. 124375 
GENERAL MOTORS CORPORATION, 
Defendant-Appellee. 
_______________________________ 
MEMORANDUM OPINION 
This case poses the question whether the federal 
consumer product warranty act prohibits enforcement of a 
binding arbitration agreement entered into by a person who 
purchases a vehicle under a motor vehicle manufacturer’s 
employee purchase plan. 
The trial court ruled that such a 
binding arbitration agreement is prohibited by the federal 
act. 
The Court of Appeals reversed the trial court’s 
decision, relying on the supposedly binding authority of 
the decisions of two federal circuit courts of appeals. We 
affirm the decision of the Court of Appeals, but do so 
 
 
 
 
  
 
                                                 
 
 
   
because we are persuaded by the reasoning employed in the 
federal decisions and not because we are bound by them. 
Plaintiff John Abela purchased a 1999 Chevrolet truck 
from a General Motors dealership under defendant’s employee 
purchase plan, which offered him a discount because of his 
wife’s employment with General Motors. 
As part of the 
purchase contract, plaintiff was required to sign an 
agreement requiring any warranty dispute to be settled by 
binding arbitration. 
The truck subsequently developed a 
number 
of 
problems, 
necessitating 
costly 
repairs. 
Plaintiff and his wife brought suit under the Magnuson-Moss 
Warranty-Federal Trade Commission Improvement Act (MMWA), 
15 USC 2301 et seq., as well as two Michigan statutes.1 
Defendant responded with a motion for summary disposition 
pursuant to MCR 2.116(C)(7), claiming that plaintiffs had 
agreed to arbitrate any claims they had against defendant. 
The trial court denied defendant’s motion and granted 
summary disposition in favor of plaintiffs pursuant to MCR 
2.116(C)(9), for failing to state a valid defense. 
The 
trial court based its ruling on the determination that 
1 The two statutes are not relevant to this discussion. 
As the Court of Appeals correctly ruled in this case, the
Michigan warranties on new motor vehicles act, the “lemon
law,” MCL 257.1401 et seq., and the Michigan Consumer
Protection Act, MCL 445.901 et seq., are surmounted by the
federal arbitration act. 
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defendant’s program for binding arbitration was contrary to 
the MMWA and, therefore, unenforceable. 
The Court of Appeals reversed the ruling of the trial 
court. 
257 Mich App 513; 669 NW2d 271 (2003). 
It noted 
that two federal circuit courts of appeals had addressed 
the question whether the MMWA bars compulsory arbitration 
of written warranty claims, and that both had determined 
that the MMWA does not preclude such arbitration, otherwise 
enforceable under the Federal Arbitration Act (FAA), 9 USC 
1 et seq. 
Citing Schueler v Weintrob, 360 Mich 621; 105 
NW2d 42 (1960), and Woodman v Miesel Sysco Food Co, 254 
Mich App 159; 657 NW2d 122 (2002), the Court of Appeals 
held that it is bound by the authoritative holdings of the 
federal courts of appeals on a federal question where there 
is no conflict among those federal courts on that question. 
Because the only two federal circuit courts of appeals that 
had ruled on the issue concluded that binding arbitration 
agreements are not prohibited by the MMWA, the Court of 
Appeals found that the trial court had erred in granting 
plaintiffs’ motion for summary disposition and in denying 
defendant’s motion for summary disposition. 
We disagree with the Court of Appeals basis for 
reversing the decision of the trial court. The Court of 
Appeals concluded that it was bound by the decisions of the 
federal circuit courts of appeals on questions of federal 
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law. 
257 Mich App 523. 
Although 
state courts are bound 
by the decisions of the United States Supreme Court 
construing federal law, Chesapeake & O R Co v Martin, 283 
US 209, 220-221; 51 S Ct 453; 75 L Ed 983 (1931), there is 
no similar obligation with respect to decisions of the 
lower federal courts. 
Winget v Grand Trunk W R Co, 210 
Mich 100, 117; 177 NW2d 273 (1920). 
See generally 21 CJS, 
Courts, § 159, pp 195-197; 20 Am Jur 2d, Courts, § 171, pp 
454-455. 
The Court of Appeals reliance on Schueler v 
Weintrob, 360 Mich 621; 105 NW2d 42 (1960), is misplaced. 
In that case, we were faced with conflicting decisions of 
lower federal courts and, of course, were “free to choose 
the view which seems most appropriate to us.” 360 Mich 634. 
However, that statement does not establish the converse— 
that where there is no such conflict, we are bound to 
follow the decisions of even a single lower federal court. 
Although lower federal court decisions may be persuasive, 
they are not binding on state courts. 
Although the federal courts of appeals decisions are 
not binding, we nevertheless affirm the decision of the 
Court of Appeals. We have examined the decisions in Walton 
v Rose Mobile Homes LLC, 298 F3d 470 (CA 5, 2002), and 
Davis v Southern Energy Homes, Inc, 305 F3d 1268 (CA 11, 
2002), and find their analyses and conclusions persuasive. 
Both decisions carefully examined the MMWA and the FAA, and 
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both concluded that the text, the legislative history, and 
the purpose of the MMWA did not evidence a congressional 
intent under the FAA to bar agreements for binding 
arbitration of claims covered by the MMWA. 
Persuaded by 
these analyses of the federal courts of appeals, we 
conclude that plaintiffs’ agreement with defendant to 
address the warranty claim through defendant’s dispute 
resolution process, including mandatory arbitration, is 
enforceable. 
The Court of Appeals result is affirmed on the basis 
of the above analysis, and this matter is remanded to the 
trial court for entry of an order for binding arbitration 
pursuant to the agreement. 
Maura D. Corrigan
Elizabeth A. Weaver 
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman 
CAVANAGH, J. 
I would not dispose of this matter by memorandum 
opinion. 
I would grant leave to consider further briefing 
and argument. 
Michael F. Cavanagh
Marilyn Kelly 
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