Opinion ID: 3031066
Heading Depth: 3
Heading Rank: 1

Heading: The Magnuson-Moss Warranty Act Creates a

Text: Federal Private Cause of Action for a Warrantor’s Failure to Comply with the Terms of a Written Warranty [5] Subject to certain conditions with which Milicevic complied, the Magnuson-Moss Warranty Act creates a federal private cause of action for a warrantor’s failure to comply with the terms of a written warranty: “[A] consumer who is damaged by the failure of a . . . warrantor . . . to comply with any obligation . . . under a written warranty . . . may bring suit for damages and other legal and equitable relief . . . in an appro3712 MILICEVIC v. FLETCHER JONES IMPORTS priate district court of the United States . . . .” 15 U.S.C. § 2310(d)(1)(B). To the extent Mercedes argues to the contrary, the cases on which it relies are inapposite. First, Mercedes cites the following language from Skelton v. General Motors Corp., 660 F.2d 311 (7th Cir. 1981): “The district court properly rejected plaintiffs’ argument that the Act’s draftsmen intended in [Section 2310(d)] to create a federal private cause of action for breach of all written express warranties.” Id. at 316 (emphasis added). The context for the Seventh Circuit’s statement, however, is essential. The district court had held that the written promises at issue were not “written warrant[ies]” as defined in Section 2301(6), and the plaintiffs did not appeal that holding. Id. at 316 n.7. Rather, the plaintiffs argued that all written promises constituted written warranties for the purposes of Section 2310(d)(1). The Seventh Circuit rejected the plaintiffs’ argument, holding that the definition of “written warranty” provided in Section 2301(6) applied wherever “written warranty” was used throughout the Magnuson-Moss Warranty Act. Id. at 322. Unlike General Motors’ written promises, which the Seventh Circuit presumed not to amount to warranties under Section 2301(6), as we explain below, the express limited warranty given by Mercedes does qualify as a written warranty. [2] Second, in Richardson v. Palm Harbor Homes, 254 F.3d 1321 (11th Cir. 2001), the plaintiffs filed suit for breach of, in relevant part, an express oral warranty when their mobile home exhibited a number of defects. Id. at 1323, 1326-27 (interpreting Count 1 of the plaintiffs’ complaint to refer to an express oral warranty). The defendant moved to compel arbitration based on a binding arbitration agreement signed by the plaintiffs. Id. at 1323. In response, the plaintiffs claimed that Section 2310(a) overrode the Federal Arbitration Act, 9 U.S.C. § 2 et seq., and prohibited binding arbitration agreements as to all consumer warranties — whether express or implied, written or oral. Id. The district court denied the motion to compel arbitration of the express oral warranty MILICEVIC v. FLETCHER JONES IMPORTS 3713 claim. Id. at 1323-34. The Eleventh Circuit reversed and remanded, holding that the Magnuson-Moss Warranty Act superceded the Federal Arbitration Act as to written warranties but not as to oral express warranties. Id. at 1327. Of course, the arbitration provision in Section 2310(a) is not here at issue. Further, not only was there no dispute in Richardson that the plaintiffs had a private right of action under the Magnuson-Moss Warranty Act for claims of breach of written warranties, the court’s language dispels whatever doubt there might be: “The Act’s consumer-suit provision . . . supplies a federal remedy for breach of written and implied warranties, but not for oral express warranties, which remain the domain of state law.” Id. at 1325. Here, the warranty Milicevic relies upon is written, not oral. Third, in Walsh v. Ford Motor Co., 807 F.2d 1000 (D.C. Cir. 1986), the D.C. Circuit held: “[E]xcept in the specific instances in which Magnuson-Moss expressly prescribes a regulating rule, the Act calls for the application of state written and implied warranty law, not the creation of additional federal law.” Id. at 1012. Again, however, the context is crucial. There, the plaintiffs sought certification of three classes in an action brought under the Magnuson-Moss Warranty Act for breach of written and implied warranties. Id. at 1002. Despite the fact that the plaintiffs resided in several different states and that there were variations in state laws governing the interpretation of written and implied warranties, the district court “apparently believed . . . that the federal Act alone, uncomplicated by ‘any State law variations,’ covered the class members’ ‘claims for breach of written warranty,’ ” id. at 1011, and, as for the claims for breach of implied warranty, interpreted the Magnuson-Moss Warranty Act as mandating a “somewhat looser application of Rule 23.” Id. at 1003-05. The D.C. Circuit granted interlocutory appeal on the issue of class certification, concluded the district court improperly construed the Magnuson-Moss Warranty Act, and instructed the district court to reexamine whether the variance in state warranty laws prohibited the finding (required for class certi3714 MILICEVIC v. FLETCHER JONES IMPORTS fication) that common questions of law predominated. Id. at 1012. However, at no point did the D.C. Circuit suggest that there was no federal cause of action under the MagnusonMoss Warranty Act. [7] Thus, it is clear from the statutory language that the Magnuson-Moss Warranty Act creates a private cause of action for a warrantor’s failure to comply with the terms of a written warranty, and none of the cases cited by Mercedes support a contrary position. Finally, in this regard, whether the written warranty is full or limited makes no difference. Although the Magnuson-Moss Warranty Act distinguishes between full and limited warranties, it nonetheless refers to each as a written warranty. 15 U.S.C. § 2303(a)(1)-(2). Likewise, Section 2301(6) defines a “written warranty” without limiting it to either full or limited warranties, and Section 2310(d)(1) does not limit its application to either full or limited warranties. B. Milicevic Had a Limited Written Warranty and the District Court’s Findings Support the Conclusion that Mercedes Was in Breach of that Warranty [8] As defined in the Magnuson-Moss Warranty Act, a written warranty is a writing made by the supplier of a product relating to the nature of the material or workmanship of the product, which warranty promises that the product is defect free or will meet a certain level of performance for a given period of time, or a writing in which the supplier agrees to refund, repair, replace, or take other remedial action in the event that the product fails to meet its specifications. 15 U.S.C. § 2301(6). Here, Mercedes supplied such a limited written warranty, which by its terms “warrants to the original and each subsequent owner of a new Mercedes-Benz passenger car that any authorized Mercedes-Benz Center will make any repairs or replacements necessary to correct defects in material or workmanship” at no charge for parts or labor. MILICEVIC v. FLETCHER JONES IMPORTS 3715 [9] The district court did not clearly err in finding that two significant nonconformities — the rear window seal and the brakes — were not corrected. A Fletcher Jones mechanic admitted that the rear window seal was a “factory defect,” and Mercedes never corrected the defect. And even after the brake pads and rotors were replaced, Milicevic testified the brakes still did not work properly. The district court also found that all of the defects, conditions and non-conformities complained of by plaintiff, which Fletcher Jones was unable to repair, were covered by Mercedes-Benz’s said warranty. We are not firmly convinced this was in error. Even though the warranty provides that “normal maintenance” of items was the owner’s responsibility, it also states: Our intention is to repair under warranty, without charge to you, anything that goes wrong with your car during the warranty period which is our fault. . . . Please note the difference between “defects” and “damage” as used in the warranty. Defects are cov- ered since we, the manufacturer or distributor are responsible. The rear window seal and brakes were repaired under warranty at no cost to Milicevic. By attempting to repair the rear window seal and the brakes under warranty, Mercedes admitted the defective nature of these conditions. Thus, when it failed to correct the defects in the rear window seal and brakes, Mercedes breached the terms of its limited written warranty in violation of Section 2310(d)(1).4 4 When the district court concluded Mercedes violated the MagnusonMoss Warranty Act it, perhaps accidentally, cited Section 2304 instead of Section 2310(d)(1). Section 2304 applies to full warranties, not to the limited warranty between the parties here. Nevertheless, Section 2310(d)(1) does apply to limited written warranties and “[w]e may affirm on any ground supported by the record even if it differs from the rationale of the district court.” Martinez-Villareal v. Lewis, 80 F.3d 1301, 1305 (9th Cir. 1996). 3716 MILICEVIC v. FLETCHER JONES IMPORTS C. The District Court Did Not Abuse Its Discretion in Its Award of Attorneys’ Fees [10] Having made out a claim for relief under the Magnuson-Moss Warranty Act, Milicevic may be awarded reasonable costs and attorneys’ fees. 15 U.S.C. § 2310(d)(2). With respect to attorneys’ fees, the Magnuson-Moss Warranty Act gives courts discretion to award “reasonabl[e]” attorneys’ fees “based on actual time expended.” Id. The district court did not abuse its discretion when it concluded that the hourly rate requested by Milicevic’s attorneys was not reasonable and, thus, eliminated hours it thought were unnecessarily duplicative. American Law Center PC v. Stanley (In re Jastrem), 253 F.3d 438, 443 (9th Cir. 2001). The evidence in the record supports the conclusion that it was not necessary to have both Gellner and Haley prepare for trial in this case. Mercedes informed Gellner of its intent to call Gellner as a witness in advance of trial. Once Gellner knew he might be called to testify, the district court found Gellner could have turned over to Haley the task of trial preparation. Such a finding was well within the discretion of the district court. Further, the case was not overly complicated and did not require any special expertise. Last, the district court was well within its discretion in reducing the hourly rate and hours upon which Milicevic based her attorneys’ fee request.