Breach of Warranty Lawsuit

The Magnuson-Moss Warranty Act (MMWA) of 1975 protects consumers from deceptive advertising by clarifying warranties and forcing warrantors to uphold them. With this act as its foundation, breach of warranty law (or “lemon law”) allows consumers to file lawsuits against manufacturers or merchants for products that fail to live up to their warranty.

These lawsuits are usually filed in state or federal court, and they allow consumers to recover damages for defective or irreparable items. Importantly, under the MMWA a prevailing plaintiff may recover legal fees, which means a person can pursue a breach of warranty lawsuit at no cost to them.

Eligibility

The MMWA covers goods and products, not services. The most common items at the center of lemon law cases are cars, RVs, boats, and mobile homes. However, the statute applies to almost any consumer product that comes with a warranty and costs more than $10.00. Thus, household items like electronics, appliances, HVAC units, and exercise equipment also qualify.

Most lemon law lawsuits involve some combination of the following:

  • A refusal of warranty service
  • Three or more unsuccessful repair attempts
  • A product being out of service for 30+ days due to repair attempts.

(However, there are many exceptions to these guidelines.)

Please note that “WARRANTY VOID IF SEAL REMOVED” stickers and tie-in clauses (e.g., “must be serviced or repaired by an X technician”) are illegal. These tricks are extremely common in the electronics industry; Sony, Microsoft, and Apple all use them to try and evade their warranty responsibilities. But the MMWA expressly forbids tie-in clauses and void-if-removed stickers.

The Act only applies to written warranties, not oral ones or handshake agreements. The MMWA also does not apply under the following conditions:

  • The item in question was damaged while in the consumer’s possession.
  • The consumer did not use the item properly/the way it was intended to be used.
  • The consumer did not provide the necessary care or maintenance of the product.

In order to pursue a lawsuit, a consumer must save and provide all pertinent receipts/invoices and repair orders as proof of breach of warranty.

Compensation

Under the Magnuson-Moss Act, a prevailing plaintiff is entitled to recover attorney’s fees from the warrantor. This means a consumer can pursue a breach of warranty lawsuit without being required to pay for an attorney, who can recover fees and costs from the other side.

Additionally, a winning consumer is often awarded the “diminished value” of the product, which is the monetary difference between the value of the product as promised and the actual value of the product received.

In certain cases, a consumer may also recover incidental or consequential damages incurred as a result of the breach of warranty. These damages may include:

  • Lost wages
  • Loss of use of the product
  • Cost of replacement transportation such as rental vehicles or taxi fares
  • Other out-of-pockets costs related to the product’s defects

However, while a repurchase is sometimes available if the direct seller of the product gives a warranty, a manufacturer who does not sell the product directly to a consumer is not typically required to repurchase the item under the Magnuson Moss Warranty Act.

Notable Lemon Law Cases

There are too many lemon law cases to document them all here. For example, in New York in 2015 alone, more than $2.5 million was refunded to 68 consumers who filed automobile lemon law cases.

Here are some recent and notable breach of warranty cases.

Moldy Washer Lawsuits (2016)

In 2016, multimillion-dollar settlements were reached in several class action settlements involving washing machines that accumulated excessive mold and mildew because of a design flaw.

The first settlement centered on machines made by Whirlpool and Sears, while the second involved LG front-loaded washers sold between 2002-2006.

In the Whirlpool case, consumers would be reimbursed $50 and up to $500 for repairs/replacements. In the LG case, they were entitled to $35 or up to $105 off a new LG washer.

Ford Explorer Exhaust Leaks (2016)

In October 2016, Ford settled a class action lawsuit over its 2011-2015 Explorers, which allegedly leak exhaust fumes into the cabin.

Under the terms of the proposed settlement, Ford will repair warrantied vehicles free of charge and reimburse customers whose warranties expired. Ford will also notify affected owners about the settlement, and pay all attorney fees.

Hold Warrantors Accountable

The Federal Trade Commission (FTC) vs. BMW (2015)

In 2015, BMW reached a settlement with the FTC over requiring customers to use specific parts and service centers (theirs) or else risk invalidating their warranties. These types of tie-in clauses are illegal under the MMWA.

The proposed settlement forces BMW to comply with the MMWA and the FTC Act moving forward; it also

  • Bars BMW from implying that to operate a vehicle safely or maintain its value, a customer must take it to one of BMW’s MINI dealers or centers (unless this can be scientifically proven)
  • Requires BMW to tell customers that they are allowed to use third-party parts and services without losing their warranties

No word yet on whether the FTC will go after other automakers and electronics companies (Apple, Sony, Microsoft) who engage in similar unlawful tactics.

Robert Montgomery vs. Tesla (2014)

In 2014, Tesla settled a lemon lawsuit with Robert Montgomery of Franklin, Wisconsin, agreeing to pay him $128,000. Mr. Montgomery had purchased a Tesla Model S that immediately required extensive repairs, spending at least 60 days in a Chicago auto shop.

Marco Marquez vs. Mercedes-Benz (2012)

In 2012, a judge upheld a $482,00 lemon law verdict for a Waukesha, Wisconsin man named Marco Marquez. (Wisconsin has some of the strongest lemon laws in the country.)

Mr. Marques had pursued the lawsuit against Mercedes-Benz over a Mercedes-Benz E320 sedan Mr. Marquez purchased in 2005, which had serious malfunctions and required extensive, near-constant repairs.

The award, which included attorney fees, was nearly nine times the car’s original $56,000 value.

Pursue a Breach of Warranty Lawsuit

If you purchased a warrantied product that proved to be damaged or defective, and the manufacturer or merchant has failed to uphold the warranty, you may have a lemon law case.

Morgan & Morgan is one of the largest consumer protection firms in the country. With more than 300 lawyers and a support staff of over 1,500 people, we are one of the few with the resources to take on large companies on behalf of regular people. To date, we have won more than $2 billion for clients.

Contact us today for a free, no-obligation case review.