UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Division of Marketing Practices

May 5, 2008

Matthew K. Cordis, Esq.

Clarke Silvergate & Campbell, P.A.

799 Brickell Plaza, Suite 900

Miami, FL 33131

Dear Mr. Cordis: 

This letter responds to your request of March 3, 2008 seeking an advisory opinion from

staff of the Federal Trade Commission (the “Commission” or “FTC”) regarding the application

of the Magnuson-Moss Warranty Act (“the Act”), 15 U.S.C. § 2301, et seq., to a 1300

horsepower diesel engine that your client imports and distributes. Your client also coordinates

services of those engines in the United States. 

You request guidance on whether this engine would be a “consumer product” under the

Act. 15 U.S.C. § 2301(1). Based on your letter’s description of the engine and relevant sales

and industry data included in your letter, FTC staff’s opinion is that the engine in question would

not be a “consumer product” for purposes of the Act. 

The Act requires companies that offer written warranties on the consumer products they

manufacture or sell to provide consumers with detailed information about warranty coverage. 

For example, the Act and the regulations the FTC adopted under the Act require that the key

terms of warranty coverage be disclosed in a single document, 16 C.F.R. Part 701, and that the

document be available at the point of purchase for consumers to review before purchasing a

warranted consumer product, 16 C.F.R. Part 702.

The Act defines a “consumer product” as “any tangible personal property which is

distributed in commerce and which is normally used for personal, family, or household purposes

(including any such property intended to be attached to or installed in any real property without

regard to whether it is so attached or installed).” 15 U.S.C. § 2301(1). The Commission has

promulgated an interpretive rule that clarifies that “a product is a ‘consumer product’ if the use

of that type of product [for personal, family, or household purposes] is not uncommon.” 16

C.F.R § 700.1(a). 

The product you describe in your letter is a 1300 horsepower diesel engine commonly

incorporated into industrial or commercial products such as cranes, buses, farm equipment,

locomotives, mining equipment, and commercial vessels. According to the sales data you

provide, the engine’s manufacturer sold just 2% of these engines to manufacturers for

incorporation into marine pleasure craft, and less than .01% directly to individuals for similar

use. Although the FTC’s interpretative rule states that “[t]he percentage of sales . . . is not

determinative,” 16 C.F.R. § 700.1(a), sales information is relevant in determining a product’s
Mr. Matthew K. Cordis

May 5, 2008

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The industry data you provide also supports this conclusion. You indicate that in 2003,

over 88% of all diesel engines with horsepower greater than 500 were incorporated into

industrial vessels, equipment and machinery, as compared to approximately 12% that were

incorporated into large motor yachts. As you note, it is likely that a significant percentage of

these motor yachts are used solely for commercial purposes. Therefore, it appears uncommon

for a 1300 horsepower diesel engine to be used for “personal, family, or household purposes.” 

normal use, and whether that use is for personal, family, or household purposes such that it falls

within the Act’s coverage. The sales data you provide suggests that this engine is not one for

which the normal use is for personal, family, or household purposes. Therefore, based on the

purposes of the Act and the data you provided, we agree that this engine is not a “consumer

product” under the Act.1

The opinions expressed in the foregoing discussion and the basis for this conclusion are

those of Commission staff only and are not attributable to, nor binding on, the Commission itself

or any individual Commissioner. I hope this discussion is helpful to you. If you have any

further questions, please do not hesitate to contact me at (202) 326-2505.

Sincerely, 

Allyson Himelfarb

Investigator/Magnuson-Moss

Program Coordinator