Harley-Davidson Prevails in Magnuson-Moss Warranty Act Lawsuit

A federal court in Wisconsin has dismissed a putative multi-district class action against motorcycle manufacturer Harley-Davidson. The issue was the company’s insistence on Harley owners using Original Equipment Manufacturer (OEM) parts to keep their limited warranty intact. The plaintiffs claim Harley Davidson violated the anti-tying provision of the Magnuson-Moss Warranty Act (MMWA).

An article by Seyfarth attorneys Dallin R. Wilson and Brandon L. Bigelow calls this decision a quiet rejection of the Federal Trade Commission’s interpretation of the MMWA, as rendered in an enforcement action the FTC brought against the company two years ago.

The federal court decision concluded the warranty terms at issue do not say that using non-Harley parts “will” affect the warranty (a statement the decision acknowledges would run afoul of the anti-tying prohibition of the MMWA and associated FTC rules), but that they “may” affect the warranty.

The authors note the filing in the Wisconsin case came in the wake of a 2022 FTC enforcement action that was based on the same alleged Magnuson-Moss Warranty Act violations. That action, had it proceeded, would have gone before an FTC administrative law judge.

However, rather than contest it, the company entered into a consent decree in which it denied any violations but agreed to a number of conditions, including changes in the warranty language, and notification of customers that their warranties would remain in effect even if they bought aftermarket parts or used independent repair facilities.

“Although Harley-Davidson chose not to contest the FTC’s 2022 enforcement action,” the Seyfarth writers conclude, the federal court decision “demonstrates that companies can still mount an early and vigorous defense in court, even after making the strategic decision to settle with the FTC rather than fight in a potentially unfavorable administrative forum.”