MMWA Bars Warranty Arbitration Clauses: 9th Circ.

Law360, New York (September 20, 2011, 6:00 PM EDT) -- The Ninth Circuit on Tuesday ruled that the Magnuson-Moss Warranty Act bars mandatory arbitration clauses in warranties, reversing an arbitration award for a Porsche dealer that was sued for refusing to honor a customer's warranty claims.

In a 2-1 decision, a three-judge panel said Congress delegated rulemaking authority under the statute to the Federal Trade Commission, which construed the law as prohibiting predispute mandatory binding arbitration provisions in written warranty agreements and issued a rule forbidding judicial enforcement of these provisions with respect to customer claims...
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