Opinion ID: 2065664
Heading Depth: 1
Heading Rank: 6

Heading: Congress's Intent to Preclude Binding Arbitration

Text: To determine whether Congress addressed the issue now before us, we must evaluate the plain language of the text of the MMWA to ascertain the congressional intent at the time that Congress enacted the statute. See Walzer v. Osborne, 395 Md. 563, 571-74, 911 A.2d 427, 431-34 (2006) (outlining the rules of statutory interpretation); Public Citizen v. United States Dep't of Justice, 491 U.S. 440, 454-55, 109 S.Ct. 2558, 2567, 105 L.Ed.2d 377, 392 (1989) (explaining that the plain language of a statute is ordinarily the most reliable source for interpreting the meaning of a statute and that looking beyond the plain language becomes permissible only in situations where the plain meaning seems inconsistent with the congressional intent). Based on the clear language of the MMWA, we conclude that Congress expressed an intent to preclude the enforcement of binding arbitration clauses under the MMWA. [10] Congress made clear, in § 2310(a)(3)(C), that consumers must retain the ability to adjudicate their claims in court, even if they must first resort to informal dispute settlement procedures. Congress explained that consumers may be required to participate in the informal dispute settlement mechanisms established by warrantors before pursuing other legal remedies. Congress stated explicitly that a consumer may be forced to submit to an informal dispute resolution mechanism  before pursuing any legal remedy under this section respecting such warranty (emphasis added). The language of 15 U.S.C. § 2310 therefore makes clear that the warrantor may establish informal dispute settlement mechanisms that consumers must use to resolve their claims under the MMWA, but that consumers cannot be forced to resolve their claims through an informal dispute resolution mechanism that is binding. Consumers may be required by warrantors to participate in a non-binding informal dispute settlement mechanism, but only as a prerequisite; afterwards, consumers may pursue other legal remedies. 15 U.S.C. § 2310(a)(3)(C). Furthermore, the legislative history of the MMWA also reveals the congressional intent to prevent consumers from being forced into binding arbitration because such a resolution would constitute a substitute for litigation. The House Report on the MMWA states expressly that [a]n adverse decision in any informal dispute settlement procedure would not be a bar to a civil action on the warranty involved in the proceedings. . . . H.R.Rep. No. 93-1107 (1974). Moreover, the Conference Committee Report explains that consumers can still pursue all alternative avenues of redress if they choose not to participate in an informal dispute settlement procedure. S. Conf. Rep. No. 93-1408 (1974). We agree with Davis and Walton that because binding arbitration is now considered a substitute for litigation, it would not fit within Congress's definition of an informal dispute settlement mechanism that would precede other legal avenues. Notwithstanding this determination, we do not agree with Davis or the Walton majority's conclusion that Congress must therefore not have intended to preclude binding arbitration. If Congress had enacted the MMWA in the 1990s, then such a conclusion could be permissible, but it was written prior to the expansion of the FAA, in 1975. We therefore interpret the language contained in the MMWA and the language in the House and Senate reports as clear evidence of Congress's intent to protect consumers from the forced resolution of claims through binding arbitration, as it exists today as a substitute for litigation. The MMWA is pro-consumer, it seeks to protect consumers from deception, it gives consumers a statutory private right of action in state or federal court if they are damaged by the failure of a supplier, warrantor, or service contractor, and, although Congress allows for the resolution of claims through informal dispute settlement mechanisms, it stated clearly that those mechanisms precede the other legal remedies provided for under the MMWA. When Congress enacted the MMWA, Wilko was the precedent, and the Supreme Court determined in Wilko that the claimants could not be forced to arbitrate their claims, despite the existence of the FAA, because arbitration would disadvantage the consumer. Wilko, 346 U.S. at 438, 74 S.Ct. at 188-89, 98 L.Ed. at 177. In addition, Raymond's contention in his brief is therefore correctthat [w]hat was once an informal means of dispute resolution has now become more formal. Thus, the modern view of arbitration cannot be used to glean Congress's intent in enacting the MMWA more than thirty years ago when binding arbitration was considered something much different. Because arbitration was a precursor to litigation in 1975 and the precedent at the time that Congress enacted the MMWA was that arbitration disadvantaged the consumer, we hold that Congress did not intend for consumers to be forced to resolve their MMWA claims through binding arbitration, as it stands today. Congress likely intended to include arbitration, as it existed in 1975, as an informal dispute settlement procedure because consumers could still pursue a civil action. It is clear, however, that Congress intended to preclude arbitration in its current form, based on the language in § 2310(a). In construing a statute, `[w]e avoid a construction of the statute that is unreasonable, illogical, or inconsistent with commonsense.' Walzer, 395 Md. at 573, 911 A.2d at 432 (2006) (citing Blake v. State, 395 Md. 213, 224, 909 A.2d 1020, 1026 (2006)); see also Gwin v. MVA, 385 Md. 440, 462, 869 A.2d 822, 835 (2005); Frost v. State, 336 Md. 125, 137, 647 A.2d 106, 112 (1994). It would be inconsistent with common sense, and the MMWA's pro-consumer approach, to hold that Congress intended for consumers to retain their ability to pursue a civil action, but did not intend to bar the use of binding arbitration that would constitute a substitute for litigation. We therefore reject Koons Ford's interpretation of the MMWA. If Congress intended otherwise, then it certainly had, and still has, the ability to say so. As we have previously explained, however, [i]t is not the task of the Judiciary to re-write the Statute. . . . The court's charge in interpreting a statute is to determine the intent of the Legislature, not to insert language to change the meaning of a statute. Walzer, 395 Md. at 584-85, 911 A.2d at 439-40 (citations omitted). Even if Congress did not directly express an intent to preclude binding arbitration in the language of the MMWA, the FTC's interpretation of the MMWA is certainly based on a permissible construction of the MMWA. See Walton, 298 F.3d at 492 (King, C.J.dissenting); Rickard, 279 F.Supp.2d at 921; Browne, 190 F.Supp.2d at 831; Pitchford, 124 F.Supp.2d at 962-65. The FTC's interpretation is a permissible construction for all of the reasons set forth supra, describing why this Court believes that Congress evinced such an intent. [11] Therefore, under the second prong of the Chevron test, we would defer to the FTC regulations and hold that the MMWA precludes the resolution of MMWA claims through binding arbitration. JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE COUNTY AFFIRMED. KOONS FORD TO PAY THE COSTS. RAKER and HARRELL, JJ., Dissent. Dissenting Opinion by HARRELL, J., which RAKER, J., Joins. I dissent. While the Majority is welcome to pin its decision on the reasoning adopted previously by only three federal district courts, [1] a handful of law journal articles, [2] and a dissent, [3] I would choose to follow and adopt the reasoning of the other courts (the vast majority) that have decided that the Magnuson-Moss Warranty Act permits binding arbitration to be elected for disputes arising under a covered warranty. See, e.g., Davis v. S. Energy Homes, Inc., 305 F.3d 1268 (11 th Cir. 2002); Walton v. Rose Mobile Homes, Inc., 298 F.3d 470 (5th Cir.2002); Patriot Mfg., Inc. v. Dixon, 399 F.Supp.2d 1298, 1306-07 (S.D.Ala.2005); Dombrowski v. Gen. Motors Corp., 318 F.Supp.2d 850, 850-51 (D.Ariz.2004); Pack v. Damon Corp., 320 F.Supp.2d 545, 558 (E.D.Mich. 2004); Patriot Mfg., Inc. v. Jackson, 929 So.2d 997, 1005-06 (Ala.2005); Daimler Chrysler Corp. v. Yaeger, 818 N.E.2d 527, 536 (Ind.2004); Borowiec v. Gateway 2000, 209 Ill.2d 376, 283 Ill.Dec. 669, 808 N.E.2d 957, 970 (2004); Abela v. Gen. Motors Corp., 469 Mich. 603, 677 N.W.2d 325 (2004); Howell v. Cappaert Manufactured Housing, Inc., 819 So.2d 461, 464 (La.Ct. App.2002); In re American Homestar of Lancaster, Inc., 50 S.W.3d 480, 492 (Tex. 2001); S. Energy Homes, Inc. v. Ard, 772 So.2d 1131, 1135 (Ala.2000). The Majority opinion, to its credit, gives a fair (and persuasive) summary of the reasoning in Davis and Walton. See Maj. op. at 54-57, 919 A.2d at 732-34. I need not repeat that here. Suffice it to add that the Federal Trade Commission's anti-arbitration bias, expressed in its 1999 renewal of the view that Section 110(a)(3) of the [Magnuson-Moss] Warranty Act . . . clearly implies that a [informal dispute settlement] mechanism's decision cannot be legally binding, because if it were it would bar later court action (64 Fed.Reg. 19700, 19708 (1999)) is completely out-of-step with both Congress' and the U.S. Supreme Court's views regarding arbitration not being inherently hostile to consumers' interests. See, e.g., Green Tree Fin. Corp. Ala. v. Randolph, 531 U.S. 79, 89-90, 121 S.Ct. 513, 521-22, 148 L.Ed.2d 373 (2000). Judge RAKER authorizes me to state that she joins the views expressed in this dissent.