Ninth Circuit Rules that Magnuson-Moss Warranty Act Prohibits Mandatory Arbitration in Warranties, Creating a Circuit Split
The Ninth Circuit in Kolev v. EuroMotors West/The Auto Gallery held that The Magnuson Moss Warranty Act (“MMWA”) “precludes enforcement of pre-dispute agreements . . . that require mandatory binding arbitration of consumer warranty claims.” The Ninth Circuit’s ruling would essentially prohibit manufacturers and distributors of consumer products from attempting to take advantage of the Supreme Court’s recent pro-arbitration rulings, including AT&T Mobility v. Concepcion, involving MMWA consumer warranty claims. Thus, to the extent the MMWA precludes arbitration clauses, class waivers in such clauses, which Concepcion rendered immune from invalidation under state laws, would thus likewise be unenforceable in MMWA actions, providing a complete end-run around Concepcion.