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FTC Complaints and Class Actions Send Warning to Consumer Product Manufacturers and Retailers: Double-Check Your Product Warranties

In the past year, the FTC has promoted consumers’ so-called “right to repair.” In particular, the FTC has focused on the “Anti-Tying Rule” of the Magnuson-Moss Warranty Act (the “MMWA”), which limits manufacturers’ ability to steer consumers to manufacturer-affiliated repair shops. Plaintiffs’ firms have taken notice, filing a spate of class actions based on purported violations of the Anti-Tying Rule. These same firms have also filed a spate of consumer class actions against retailers alleging violations of the MMWA’s “Pre-Sale Availability Rule.” Manufacturers and retailers should confirm they are complying with the MMWA and state law.

MMWA Section 2302(c) states in part: “No warrantor of a consumer product may condition his written or implied warranty of such product on the consumer’s using, in connection with such product, any article or service (other than article or service provided without charge under the terms of the warranty) which is identified by brand, trade, or corporate name.” FTC regulations implementing this provision specifically prohibit product warranties that are voided if the consumer seeks a repair from a non-authorized servicer, or otherwise repairs the product using parts not manufactured by the warrantor. 16 C.F.R. § 700.10. Indeed, the FTC has shown that it is ready and willing to enforce these provisions. In recent months, the FTC has ordered two major manufacturers to change their product warranties in order to comply with these provisions. Since the Commission filed its complaints, both manufacturers have entered into a consent decree to change their warranty practices.

On top of FTC enforcement actions, numerous putative consumer class actions have recently been filed against major product manufacturers. Plaintiffs in these cases allege that they are prevented from utilizing a third party repair service for their products. They assert that doing so would void their product’s warranty, thereby constituting a violation of the MMWA’s Anti-Tying provision. In some cases, plaintiffs lodge supplemental state law claims for violations of consumer protections statutes in addition to their federal claims under the MMWA. 

Retailers, like product warrantors, have also seen a deluge of consumer class actions alleging violations of the MMWA. But unlike in the case of warrantors, these actions are premised upon retailers’ alleged failure to meet their obligations under the Pre-Sale Availability Rule. The Rule requires: “the seller of a consumer product with a written warranty [to] make a text of the warranty readily available for examination by the prospective buyer by: (1) Displaying it in close proximity to the warranted product … or (2) Furnishing it upon request prior to sale … and placing signs reasonably calculated to elicit the prospective buyer’s attention in prominent locations in the store or department advising such prospective buyers of the availability of warranties upon request.” 16 C.F.R. § 702.3. Plaintiffs in these suits allege that retailers are failing to make product warranties available to consumers, thereby violating the MMWA. 

In order to reduce the risk of frivolous litigation, consumer product warrantors should carefully review their warranties to ensure that they comply with the MMWA. In addition, retailers should carefully review their business practices to ensure that original product warranties for consumer goods are available to consumers in accordance with the requirements of the MMWA.

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume XII, Number 265

About this Author

In recent years, labor and employment disputes have grown larger, more complex and far more likely to pose a significant threat to an employer’s core business interests. The plaintiffs’ bar has dramatically increased its use of high-stakes class, collective, and mass actions to cover a wide spectrum of labor and employment, wage and hour, and public accessibility claims; federal and state agencies are focusing on claims of systemic discrimination and substantially increasing their budgets to litigate pattern or practice cases; and legislators continue to debate laws...

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Ryan is Co-chair of the firm’s Antitrust and Consumer Protection practice. He is an experienced trial lawyer and appellate advocate whose practice focuses on complex civil, criminal and international litigation; internal, congressional and grand jury investigations; and public policy, strategic counseling, and crisis communications.

Ryan has represented corporate and individual clients, both as plaintiffs and defendants, in a broad spectrum of complex litigation at the trial and appellate levels, including antitrust, securities, RICO, ERISA,...

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Mike has more than 30 years of experience with class actions and other complex cases, including wage-hour class actions, consumer products class actions, racketeering (RICO), and labor disputes with unions and employee groups.

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Tom is a litigator, handling complex civil matters, including class actions and mass torts. Tom has successfully defended class actions and product liability cases on behalf of companies in a variety of industries, including consumer and industrial products, energy and transportation.

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Prior to joining the firm, Devin served as a judicial intern for the Honorable Bruce E. Reinhart in the US District Court for the Southern District of Florida. While in law school, Devin worked with the Atlanta Legal Aid Society to provide pro bono services to low income clients. Devin also participated in the Criminal Clinic – State Attorney Field Placement, working as a Certified Legal Intern for the State Attorney’s...