Court Opinion

ID: 3000016
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:00:12.28398+00
Date Added: 2024-06-11T12:12:51.307344
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 01-4312
WAYPOINT AVIATION SERVICES INC. and
SALVATORE CINQUEGRANI,
                                  Plaintiffs-Appellants,
                         v.

SANDEL AVIONICS, INC., and HONEYWELL
INTERNATIONAL INC.,
                                  Defendants-Appellees.
                     ____________
       Appeal from the United States District Court for the
         Northern District of Illinois, Eastern Division.
          No. 01 C 1805—Charles P. Kocoras, Judge.
                         ____________
 ARGUED OCTOBER 17, 2006—DECIDED NOVEMBER 30, 2006
                    ____________

 Before EASTERBROOK, Chief Judge, and BAUER and
FLAUM, Circuit Judges.
  EASTERBROOK, Chief Judge. In 1999 Waypoint Aviation
purchased a Bravo M20M airplane from Mooney Aircraft.
According to Waypoint’s complaint in this suit under the
Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-12, the
plane was unsafe and Mooney was unable or unwilling to
fix it yet refused to take the plane off Waypoint’s hands and
refund the purchase price. See 15 U.S.C. §2304(a)(4). The
district court dismissed the complaint under Fed. R. Civ. P.
12(b)(6) for failure to state a claim on which relief may be
2                                                No. 01-4312

granted. 2001 U.S. Dist. LEXIS 7802 (N.D. Ill. June 7, 2001).
Mooney entered bankruptcy shortly after the district court’s
decision, and the automatic stay put the appeal on hold.
Waypoint dismissed Mooney Aircraft as a party early in
2006 (though Mooney had emerged from bankruptcy in
2004), and appellate proceedings resumed.
  After reading Waypoint’s brief, which was filed after
Mooney’s dismissal, the judges were left scratching their
heads. What is the point of further litigation about a
warranty issued by an entity that is no longer a party? The
district court’s reason for dismissing the complaint was that
the Magnuson-Moss Warranty Act applies only to consumer
products, a term that means “tangible personal property
which is distributed in commerce and which is normally
used for personal, family, or household purposes”. 15 U.S.C.
§2301(1). The district judge concluded that an airplane
cannot be a consumer product, even if its principal use is
personal transportation or recreation.
   That’s a problematic conclusion. “Airplanes” is too large
a category for analysis. In a suit by a purchaser of an
automobile, a court would not say that “motor vehicles” is
the category and that, because locomotives, military tanks,
commercial tractor-trailer rigs, and 5000-ton draglines used
to dig coal are not consumer products, an automobile or
recreational vehicle isn’t one either. Analysis must be more
fine-grained, and on a motion to dismiss the complaint a
court must indulge every factual assumption in the plain-
tiff’s favor. See Swierkiewicz v. Sorema N.A., 534 U.S. 506
(2002). Just as personal cars are consumer products even
though 60-passenger busses are not, single-engine planes
used for personal transport or recreation may be consumer
products even though Antonov 225s and skycrane helicop-
ters are not. That the FTC 30 years ago amended a policy
statement to delete airplanes from its compendium of
consumer products, see 41 Fed. Reg. 26757 (1976), does not
establish that all aircraft are not consumer products; it just
No. 01-4312                                                3

means that there is no governing regulation. Times change;
more consumers fly personal airplanes now than they did
30 years ago. A computer 30 years ago would not have been
a consumer product; today personal computers are ubiqui-
tous. What’s more, a policy statement is not a regulation to
begin with.
  But this is by the by. Because Mooney is no longer a
party, we supposed that Waypoint’s brief would devote
its attention to the other two defendants, whose equip-
ment in the plane had been covered by separate warranties.
No such luck. Waypoint’s brief argued at length that small
planes with internal-combustion engines are consumer
products. The remaining defendants (Sandel Avionics and
Honeywell) denied that proposition and observed only in
passing that it does not matter to the litigation. Waypoint’s
reply brief, which reads as if Mooney were the only defen-
dant, returns to the theme that small planes can be con-
sumer products.
  What is a court to make of this? If the Magnuson-Moss
Act or its implementing regulations contained a rule that
components of an object are covered if and only if the object
is a “consumer product,” then the briefs’ focus would be
appropriate. Likewise if Sandel or Honeywell
had warranted that the plane would operate properly
if the products they supplied did. But that’s not what
their warranties say. They cover only the equipment
independent of the airframe, and they run directly to the
purchaser rather than through Mooney. So the question
then is whether the status of a component as a “con-
sumer product” depends on the classification of the larger
product with which it works. Yet there is no such link.
Consider a home air conditioning system. Real property
is not a “consumer product” (the definition is limited to
“tangible personal property”), but items in or on real
property can be “consumer products” even though they
are fixtures. See 15 U.S.C. §2301(1); 16 C.F.R. §700.1(d).
4                                                No. 01-4312

Likewise gear used in an airplane could be a consumer
product even if the plane is not. One example is a flashlight
used to illuminate maps at night. So we need to know
whether the electronics that Sandel and Honeywell sup-
plied, and warranted directly to the purchaser, are con-
sumer products. If the principal use of such equipment is in
military jets and large commercial planes, then surely not;
but if the products are normally used directly by consumers
(perhaps in automobiles or boats) they could be “consumer
products” even if all airplanes are outside the statute.
  Waypoint has forfeited any opportunity to explore this
question by ignoring the subject in the appellate briefs.
When asked at oral argument why, counsel replied that
he had not raised the question in the district court and
therefore thought himself unable to raise it now. That
candid answer, which the court appreciates, exposes an
irreparable problem in the litigation. Sandel and Honeywell
were afterthoughts in the district court, and now that they
have become the sole defendants it is too late to start the
process of framing claims against them. If Waypoint’s plan
was to ignore them, why make them defendants in the first
place? But ignored they were.
  A few odds and ends before we close. Salvatore
Cinquegrani, who owns all of Waypoint’s stock, is an
additional plaintiff. Yet Cinquegrani has no personal claim.
His injury, if any, is derivative. See Mid-State Fertilizer Co.
v. Exchange National Bank, 877 F.2d 1333 (7th Cir. 1989).
Whether this defect is one of prudential standing or consti-
tutional standing does not matter.
  There is a second problem with the judgment. Initially
the district court dismissed the suit without prejudice—
which not only is inapt (dismissals under Rule 12(b)(6)
logically are with prejudice) but also called appellate
jurisdiction into question. Back in 2001 this court issued an
order directing the district court to enter a proper final
No. 01-4312                                                  5

judgment. The district court then entered a document
providing, in full: “[t]he District Court hereby enters a final
judgment in this case.” That missed the mark. A judgment
must specify the relief to which the prevailing party is
entitled. See Foremost Sales Promotions, Inc. v. Director,
BATF, 812 F.2d 1044 (7th Cir. 1987). It is clear enough
from this statement that the district judge has washed his
hands of the case, so we have appellate jurisdiction, but
entry of a proper judgment remains essential.
  The decision of the district court is vacated, and the case
is remanded with instructions to (a) dismiss Cinquegrani’s
claims for want of standing, and (b) dismiss Waypoint’s
claims against Sandel and Honeywell, with prejudice, for
failure to present any factual or legal arguments concerning
these parties.

A true Copy:
       Teste:

                         ________________________________
                         Clerk of the United States Court of
                           Appeals for the Seventh Circuit

                   USCA-02-C-0072—11-30-06